External Factors of Consumer Decision-Making Process - Coursework Example

Introduction Understanding the products a customer purchased is not enough for most successful retailers. Most retailers need to understand the reasons behind the purchase. The study of consumer behavior objectives is to understand the complicated and ever changing contemporary consumer. Understand the reasons behind customer decision to purchase and what motivates them, you can really capitalize on that information and use it as a guideline for increasing sales and upholding positive association with customers. Consumer behavior study has gained considerable recognition in the last few years. The increasing number of retailers aims to perfect their relationship with customers. Consumer behavior can be described as the study of the individuals, groups and organization and the procedures they apply to purchase, make payment and use goods and services that satisfy their needs and wants (Best et al., 2004). This area of research is continuing and ever changing. Consumer behavior is not merely the exchange of cash for products (Solomon and Rabolt., 2004). It is essential to comprehend that consumer behavior is not black and white but complicated and multidimensional. Customer behavior can be considered as going beyond the classical definition of consumer and bring commercial purchasers and their behaviors’ into the mix (Sheth et al., 1999). Customer behavior study comprises both their mental and their physical activities. The customer is responsible for one or more roles in customer behavior: the purchasers, the payer and or the user of the products. The purchaser is responsible for choosing the product; the payer takes the role of financial negotiations while the user is the real consumer of the product or service (Sheth et al, 1999). In most cases the payer is the elder of the family, who happens to be the father mostly. A youthful unmarried adult is more likely to spend a lot of money purchasing a North Face Jacket compared to a family individual who prefers to spend less cash on individually oriented products. Consumer behavior is also the study of consumption of the product or service. A consumption state can be described as when factors and characteristics non-consumer linked affect purchase decision (Solomon et al., 2004). The major application of consumer behavior study is marketing strategy. This is based on implicit and explicit beliefs concerning consumer behavior. Understanding how clients make their decisions helps promoters and retailers to plan how to advertise and sell to their intended clients. Consumer Decision Making Consumer decision making procedure involves five main steps. The first step is referred to as problem recognition. This is when consumers identify problems to be solved or necessitate satisfaction (Sheth et al. 1999). Once these problems are solved or fulfilled, consumers can go back to their usual state of ease or normalcy. The next step involves search for information. This is after identifying the problem and the consumer is searching for information about ways of solving the problem (Rath et al., 2008). Three factors included in information search are: information sources, search strategies, and the quantity of search (Sheth et al., 1999). The third step of consumer decision-making procedure is evaluating alternatives. It involves making a selection among alternatives that the consumer feels will fulfill the need or resolve the problem. There are two models for evaluating alternatives, namely compensatory and non-compensatory models (Sheth et al., 1999). Purchase is the fourth step in consumer decision making process. The purchase phase can be split into three smaller steps. The first is identifying preferences, then making known the intent to purchase and lastly, implementing purchase and exchanging payment (Sheth et al., 1999). The last step in consumer decision-making is the post-purchase experience. The consumer applies this experience to assist in future decision-making procedures. It also provides the retailer with feedback, customer loyalty and retention (Sheth et al., 1999). External Factors Influencing Consumer Behavior External factors influencing consumer behavior originate from outside sources (Rath et al., 2008). There are various aspects to consider including cultural, demographic, social, family status and marketing activities. These elements are considered external since each is represented by outside individuals rather than the consumer in question Cultural factors Culture comprises abstract and material aspects and affects attitudes, values, personality types, religion and material possession (Hawkins et al., 2004 p.42; Kotler, 2000:p.161). Culture set extensive boundaries within which purchasers tend to think and act. This can be described as customs. Conforming to customs is usually given explicit and obvious rewards, for instance, working hard at work so as to acquire a job promotion. However, some norms are expectant with no reward, for instance, joining the queue when trying to make payment for North Face Jacket in the store. This example displays what some store edutainment systems have attempted to achieve- helping young ones in their socialization in what is regarded as proper consumer behavior (Howard, 1977). Cultural factors play a very essential in Sony Bravia Internet Tv purchase for many clients. These Internet TVs are well recognized socially and satisfy all the social needs of the consumers that is why they are very popular as users friendly in Television industry. Culture multidimensional model includes knowledge, beliefs, art, morality, value systems, laws, customs, habits, traditions as well as other human capabilities attained by members of a community (Best et al., 2004). Culture provides a consumer with guidelines or boundaries of consumer behaviors and activities that are regarded common and accepted customs. Culture takes the role of the lens and enables consumer to improve consumer alternatives and products perception (Solomon et al., 2004). It is important to note that culture is of educational nature and is attained. Human beings cannot be compared to animals that have instinctive behaviors. Humans are not conceived with norms of behavior rather they learn their customs by imitation or observing the procedure of remuneration and punishment among community members who pursue or deviate from group’s customs (Hawkins et al., 2001:p.42). According to Kotler (2000) the process of understanding culture should be a voluntary action, encouraged by social requirements. This explains the manner in which a developing child learns a set of values, concepts, preferences and behaviors through his or her family members and other major institutions. Consumers have no knowledge of how culture affects their lives. Consumers tend to think and act in a similar way as other consumers just because it feels “right”. This is the reason why certain human behaviors may be right to some cultures but also offend other cultures. Culture is inculcated. This implies that is it adapted from one generation to the next via institutions such as family members and religion (Cohen, 2006). It is possible to relate benefits of a product or brand with fresh values as culture develops or it might be essential to change the product in case that value is not rewarding in the society anymore. This issue has lead to rise of cultural borrowing which is an attempt to borrow cultural habits perceived as important to enhance solutions to a society’s specific problems (Cohen, 2006). Lastly, culture is considered as comprehensive concept, thus entailing almost everything that affects an individual’s thoughts, feelings and behaviors. There are several interactions within a consumer’s culture. For instance, when consumers are shopping for North Face Jackets, they may lack the knowledge concerning the extent of their culture’s impact when shopping at a retailer. Time meaning differs across cultures. Usually consumers take more time to make important decisions. However, this is not always the case among younger consumers (Hawkins et al., 2004:p57). For example, an expensive Sony bravia Internet TV purchase might take longer to consider, while a teenager might decide to purchase within minutes. There are three categories of cultural values; other oriented, environmental-oriented and self oriented values (Best at al., 2004). Other-oriented values can be described as beliefs a culture preserves concerning a person and sub-groups inside that culture, for instance, collective beliefs, age roles, extensions and limitations of family, gender and diversity issues. Cultural values associated with a society’s physical, economic, and technical environments are known as environment-oriented values. Examples of environment-oriented values include nature, traditions, cleanliness standards and performance status. Self-oriented values portrays what each member of a society consider pleasing such as sexual values, religious, active or passive tendencies or materialistic expectancies (Best et al., 2004). Self-oriented values Consumers may perceive work as being a burden that they dislike, while others may view work as assisting them fulfill their lives. Another factor to consider is whether individuals will either work for internal remunerations or external remuneration (Cohen, 2006). For instance, does a teenager go to purchase North Face Jacket at the stores since they have extra money for clothing or because they really like shopping or maybe they are expected to make the purchase by their parents? Active or passive refers to the manner in which consumers are either anticipated or not anticipated to handle life’s challenges. An active strategy is the way physical abilities and achievements are valued greatly compared to less physical performances (Hawkins et al., 2004). For instance, when going to purchase a North Face Jacket for a child, parents usually encourage the child to choose their own preference style. Some individuals have the concept that material wealth accumulation is essential in maintaining social well being. This concept can be in form of instrumental or terminal. Instrumental refers to products that are obtained to enable a person execute something. For instance, a consumer purchases a Sony Bravia Internet TV so that they can get a clear view and watch movie in their free time. Terminal materialism is making a purchase for the same TV for the sake of owning a Bravia Internet TV (Rath et al., 2008). Environment-oriented values A person’s performance is at times credited to their opportunities and rewards as well as their position and class. These lead to views that those in power are entitled to privileges. This implies that the individual with higher power is most likely to pay for the TV or the jacket. Some people culture consider that changing traditions as entirely unacceptable despite discovery of modern and enhanced ways of life. For example, a person may deem that purchasing a Sony Bravia Internet TV is not important despite modern trends. Some consumers consider that culture is not dynamic, living procedure and will not easily alter the manner in which they live (Rath et al., 2008). Cleanliness refers to how essential hygiene and health is viewed by several people. Some culture value personal and communal hygiene a lot while others do not since they have no knowledge. An example is that some rural people have no knowledge on the importance of oral healthcare and hence make no use of toothpaste. Nature is an environment-oriented value that deals with how people consider nature as something that can be enhanced or something with negative connotations (Hawkins et al., 2004). Other oriented values Age measures the level of how consumer daily activities are centered on either grown ups or children. It examines the part children play in decision-making and their place in society. Some culture might put an extreme priority on children and lead to an environment that is based on its youth when it comes to decision making procedures. Some culture consider that children should be seen and have no say when it comes to decision making processes (Hawkins et al., 2004). An illustration can be when a family wants to purchase a TV and the children are not given a chance to decide on the kind of TV when prefer. There exist subcultures within cultures. A subculture is defined as a part within a culture that shares a collection of meanings, standards or activities that vary in particular ways from those of the entire culture (Rath et al., 2008). It is possible to divide any culture into various kinds of subculture. Subcultures transmit their beliefs and values from one generation to the other. Racial, spiritual and ethnic backgrounds influence consumer preferences for styles of North Face Jacket or Sony Bravia Internet TV. Non-verbal communications, language, global cultures, symbols and etiquette are also cultural considerations in consumer behavior. Marketers aim to satisfy the needs and want of all their customers from all cultures and hence try to gain knowledge concerning each culture’s values, norms, myths and rituals (sheth et al., 1999). It is essential to understand that clients from different geographic cultures will react to purchasing situations and make their Sony Bravia Internet Tv Purchase in distinct ways. Different cultures have distinct ideas about what is and are not acceptable behavior, religious and marital status and dominate several aspects of their group members’ lives (Solomon et al., 2004). Religion or secular views influence daily activities of a consumer (Kotler et al., 1995). For instance, Islamic consumer shopping hours vary from a Christian consumer because of religious commitments. When marketers understand and relates to these difference they become adaptable and flexible, hence, satisfying customers. Demographics The other major external factor affecting consumer behavior is demographics. Demographic is methods applied to group or categorize a particular population by its size, specific attributes, distribution, and structure (Best et al., 2004). Demographics are very essential in consumer behavior since most of the behaviors portrayed are directly associated to demographic classification, for instance, age, education, income as well as occupation. These demographics factors directly affect consumption patterns and behaviors since they affect the specific individual (Best et al., 2004). Pursuing population trends and patterns can assist marketers to improve how they place their products and their stores. Occupation is broadly used to define individual people meet in life (Best et al., 2004). Understanding the kind of occupations available in the market enables markets to adapt their products to the needs of the workforce and their related preferences. Present education levels of the population also falls into the demographic group and should be considered when making marketing strategies for Sony Bravia Internet TV. Income and age demographics aspects have the most influence on consumer purchase decisions and behaviors (Best et al., 2004). A family decision to purchase a Sony Bravia Internet TV will be influenced by their income level and amassed wealth. Just a particular amount of income of an average citizen can be used for non basic wants such as clothing or entertainment, and this is known as subjective discretionary income, or SDI (Rath et al., 2008). Identifying the different income levels of customers is essential to marketers since they can price their products and services at standards that their targeted customers can attain. Income levels are also directly and indirectly related to other demographics factors, for instance, occupation, education and social status. It is important to consider the needs and wants of different age groups and generations subcultures when designing North Face Jackets. In marketing age is defined as the time since birth, or chronological age but not how an individual feels or their psychological age (Sheth et al., 1999). Every age group represents particular expectations and behavioral customs that take part in consumer behavior (Best et al., 2004). Consumers tend to respond and behave like most other consumer as regards to age (Solomon et al., 2004). When considering North Face Jackets designs, clients of different ages have diverse values that they put on aspects of the buying decision procedure and marketers should comprehend these values to acquire and satisfy their clients. There are generational studies to assist marketers and retailers to conduct business with their clients from several generations such as, pre-depression, depression, baby boomers, and generations X and Y. Social class Another essential factor to consider is social class. Virtually all communities portray social stratification. The relevant social classes that arise are relatively homogenous and lasting divisions in community. They are arranged in a hierarchical manner and members have same values, interest and behavior (Engel et al., 1995). Putting value on the social status of clients and researching the associations existing between those statuses and their behaviors is significant for Sony Bravia Internet TV marketers. A person’s social status can be described as one’s position compared to the status of others in the Community (Solomon et al., 2004). Some countries have a standard social class system based on individual income, occupation, and level of education, attitudes, and lifestyles (Best et al., 2004). This class system helps in the categorization of diverse levels of social and economic status, such as Middle class or upper-middle class. This simply means that a person is given rank based on one or more dimensions valued by community like the quantity of money one earns or the estate one lives. Occupation is viewed as the best sign of social class in the area of consumer behavior. Earnings and wealth are associated to possessions. Possessions are viewed as signs of class membership. For instance, teenager who is able to purchase more expensive North Face Jackets than others since the parents is wealthy. Moreover, rich parents can purchase High quality TV such as Sony Bravia. Products and brands are also positioned as indicators of status (Kotler, 2000). An individual with a Sony Bravia TV will might be considered to be wealthy. Research shows that social status influences consumer behavior more compared to income level or occupation (Sheth et al., 1999). Consumers tend to be more comfortable when surrounded by individuals having similar values and behaviors. This gives attention on factors that epitomize the essence of social classes, such as prestige, relationship and socialization. Prestige is explained as the way in which an individual respects another while relationship describes how people live their daily live in similar manners. Socialization describes how a person learns the attitudes, customs and expertise to take part in the society life. Before children reach adolescence, social class behavior and values can be evidently differentiated. Family and reference groups Family and friends external factors affecting consumer decisions are visible and physical. Family members present several issues to be considered before making a purchase decision. When purchasing a Sony Bravia Internet TV you have to consider whether if other family members prefer that brand or whether it will fulfill their needs and wants. When purchasing a North face Jacket you may consider if the jacket will fit your child or husband or whether their needs and wants will change as they grow older and mature and encounter different aspects of their lives (Sheth et al., 1999). These are the kinds of influences that family members have on your purchase decision making. A household is explained as all the individuals residing in a housing unit, while a family is described as two or more individuals joined through marriage, birth or adoption and living together (Best et al., 2004). The household is the most general and essential consumer of most goods and services, hence, it is very significant that the market industry understands these different households and their consumption behavior. When considering household purchase patterns, it is vital to note that the three roles taken by the consumer, that is, purchaser, payer and user will be undertaken by different member of the household and all features of their consumption behaviors must be observed. Apart from households and families, there exist other groups that take essential roles in the consumer behavior field. A purchaser can request a favored reference group or a group whose values the purchaser can use to make a purchase decision (Best et al., 2004). These may be group of associates, co-workers or other random shoppers who are also shopping for the North Face Jacket or Sony Bravia Internet TV. There are primary groups who have direct and frequent contact with the consumer and these leads to great influence in the final decision. Secondary groups have little personal contact and less direct interactions (Sheth et., 1999). Hawkins et al (2004: 232) states that reference groups take on three significant forms, that is normative, informational and identification. Normative impacts happen when a person fulfills group anticipations to acquire a direct reward or to prevent sanction. This is at times referred to as the association between rewards of compliance as compared with the costs. Approval and signs of esteem may provide remunerations, while limitations on freedom of choice or lost time might be viewed as costs. The resultant actions will be established by the consumer’s view of the profit inbuilt in the interaction (Hawkins et al., 2004). A person may prioritize the type of TV brand to purchase; anyone exposed to that choice will endorse or disapprove. Identification influence consumer behavior. This is seen when a person attempts to satisfy psychological needs internalizes the group’s values and customs, making the individual assume these personalities as their own. This concept can be illustrated by considering a group of teenagers going to college together. A new comer may observe that everyone is wearing a North Face Jacket. This can make the student to Purchase a North Face jacket so as to fit in the group. Reference groups apply differing quantity of influence to specific situations that consumers get themselves in. The more relevant a particular activity is to the group’s functioning, the powerful the pressure to conform to the group customs regarding that activity. For instance, teenagers dress differently when engaging in a game or visiting a fancy restaurant. A person with low-self esteem and confidence can be a prime target of peer influencing. A group’s influence is most powerful when the use of the brand or product is believed to be a luxury. Lastly, the more one is devoted to a group, the more the person will conform to the group customs (Hawkins et al., 2004). A good example is that of an individual who dresses and acts differently so as to be accepted by a particular peer group. Young adults frequently request for help from reference groups or family members before making a purchase. Conclusion Other important external factor is marketing activities and their impacts on consumer behavior. Often when people hear the term ‘marketing’, advertising is usually the first thing they think about. Advertising is regarded as a section of the external influencer factors that contribute or help in the consumption of goods and services and the end point of the customer decision making procedure (Best et al., 204). Other external marketing activities comprise the convenience and positioning of stores and shopping outlets, the attitudes and service heights of the sales employees, and the comprehension and concern of the retailers and marketers. Modern marketing activities include celebrity product lines and endorsements, internet marketing strategies, product placements in entertainment, and customer loyalty programs. The product motives are a subset of the marketing activities factors that influence fashion consumers to purchase (Cohen, 2006). Major aspects like fit, price and quality are all factors that affect consumer purchase decisions. Depending on each particular purchase circumstance, different levels of importance are put on each of these aspects. Establishing the most important factor is decided through considering the kind of consumer involved, the type of products they are buying and the product purpose. References Sheth, J., Mittal, B., and Newman, B. (1999). Customer behavior: Consumer behavior and beyond. Mason, OH: Thomson South-Western. Solomon, M., and Rabolt, N. (2004). Consumer behavior in fashion. Upper Saddle River, NJ: Prentice Hall. Best, R., Coney, K., and Hawkins, D. (2004). Consumer behavior: Building marketing strategy (9th ed.). New York: McGraw-Hill/Irwin. Cohen, M. (2006). Why customers do what they do: Who they are, why they buy, and how you can anticipate their every move. New York, NY: McGraw-Hill Companies. Engel, J., Blackwell, P. and Miniard (1995), Consumer Behavior, 8th ed., Orlando, FL: The Dryden Press Howard, J. A. (1977). Consumer Behavior: Application of Theory, New York: McGraw-Hill Kotler, P. (2000). Marketing management 10th ed. New Jersey: Prentice-Hall. Kotler, P. and Fox, K. (1995). Strategic marketing for educational institutions 2nd ed. New Jersey: Prentice-Hall. Rath, P., Bay, S., Petrizzi, R., & Gill, P. (2008). The why of the buy: Consumer behavior and fashion marketing. 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