Consumer Decision-Making - Internal Factors - Essay Example

Consumer Decision Making – Internal Factors Name Institution Name Table of Contents Table of Contents 2 Executive Summary 3 Introduction 4 Consumer Decision Making Process 4 Internal factors 5 Motivation 5 Involvement 6 Routinized response behavior 7 Low involvement decision 7 High involvement decision making 7 Attitude 7 Perception 8 Personality 9 Learning 10 Conclusion 10 References 12 Executive Summary The consumer buying decision-making process comprise of the different stages that the customer undertakes before making the final purchase decision. It has been established that consumer decision-making process has six fundamental stages; need recognition, information search, evaluation of alternatives, purchase decision, purchase, and post purchase evaluation. This process is affected by both external and internal factors. This paper is focused on discussing the internal factors, which affect consumer-buying decision, and they include motivation, perception, learning, attitude, involvement and personality. Introduction Consumer Decision Making is the decision acts and processes of persons involved in buying and consumption of products and services. This might involve understanding why customers make specific purchasing decisions, the factors that influence customer purchases, and above all, the changing factors within the society. Generally, consumer behavior can be referred to as the buying characteristics of the final consumer (Diappi, 2012). In the same line of discussion, it is a study that is focused on understanding persons, groups, and organizations as well as the activities and processes employed in the selection, securing, and disposing products and services, experiences and ideas to achieve the needs and impacts that the aforementioned processes have on consumer and the society at large. This paper is discusses consumer internal factors using different products and services and how these factors affect consumer decision-making process. Consumer Decision Making Process Consumer buying decision-making process comprise of six fundamental stages, which include: Problem recognition: this is the first stage and involves the consumer being aware of the need that must be fulfilled. Information Search: the consumer looks for information with regard to the goods or services that can fulfill the identified need(s). This process usually leaves the consumer with various alternatives Evaluation of alternatives: here, the consumer compares alternatives available to find out which of them wholly fulfills his/her needs (Diappi, 2012) Purchase Decision: the customer to buy the commodity or service that best meets his/her needs (Glowik & Smyczek, 2011) Purchase: this is the actual buying of the chosen alternative Post-purchase evaluation: the final outcome of using the purchased product; the consumer may either be satisfied or dissatisfied with the purchased commodity Internal factors The consumer buying decision is regarded as the process through which a person decides what, when, where, how and from whom to buy goods or services. This process is largely affected by several factors including both societal and personal (Diappi, 2012). The societal factors include things like, family, roles, status, and reference groups. The economic factors also have great impact on the consumer decision-making process and they may include family size, disposable income propensity to consume, and consumer credit. Accordingly, cultural factor also have significant influence on the consumer decision-making process and they include occupation, age, lifestyle, and psychological factors (Noel, 2009). The internal factors that affect consumer-purchasing decision represent those intrapersonal factors, which are discussed in below (Lamb, Hair & McDaniel, 2011). Motivation This is regarded as the psychological forces that compel the direction of one’s behavior, the amount of efforts, and the personal level of persistence specifically when facing an obstacle. In simple terms, motivation is that process which accounts for individual’s intensity, direction and effort persistence towards accomplishing a specific objective (Glowik & Smyczek, 2011). The internal forces that drive buyers to buy what they need. Motivation process has excellently described by the Maslow’s Hierarchy of Needs. The Hierarchy of Needs theory states that individuals have a tendency of meeting their basic needs first, which includes things like food, shelter, and clothing before going for higher needs in the hierarchy (Glowik & Smyczek, 2011). After achieving basic needs, human beings have a tendency of fulfilling their safety needs, followed by social needs, self-esteem and self-actualization needs respectively. For instance, the 2008-9 global financial crises, automobile companies made huge losses coupled with reduced sales (Diappi, 2012). Hyundai Company on the other hand saw this as an opportunity and positioned themselves to increases their sales; the company extensively understood its customers; they needed to feel secure (Lake, 2009). In this regard, the company promoted its vehicles assuring customers they would return their cars to the company is they would be unable to fully pay for them without damaging credit. People across the globe needed to be financially secure and hence they bought Hyundai cars in large quantities allowing the company to maintain its profitability in such tough times (Diappi, 2012). Involvement Customers have different approaches and intensities when making their buying decisions (Larimo, 2013). Sometimes, this factor is regarded as the reflection of strong motivation associated with perceived high-personal relevance of products or services in a given context (Reid & Bojanic, 2009). Involvement varies across individuals with regard to different situations and is also related to a certain form of arousal. The following are categories of involvement: Routinized response behavior This is usually exhibited when a customer purchase commodities as a routine (Diappi, 2012). Products and services that consumers buy on daily basis for daily use form the Routinized involvement. Companies selling basic needs commodities need not to heavily invest in promotional activities. Low involvement decision This demands that the consumer displays some involvement in their purchasing decision. Products in this category have a certain amount of value. Such products are purchased after a few years or after a considerable amount of time. High involvement decision making These decisions are very important and hence require intensive customer involvement in their making. The risk involved is high, and they are made once or a few times in a lifetime. For example, the purchase of a luxury car or buying a home demands for high-level customer involvement in decision-making. Attitude This is regarded as a learned predisposition to respond consistently favorable or unfavorable with respect to a given object or act. Generally, attitudes represent the manner in which human beings react, think, and feel about a given environmental aspect (Diappi, 2012). It happens within one’s self and in most cases; it is influenced by situations, circumstances or events that have the capability of influencing the relationship between behavior and attitude at a given point in time. Business companies work tirelessly to ensure they keep in touch with the changing customer attitudes; marketers for example, must be able to use marketing techniques that attract customers like through marketing messages that appeal to customers (Glowik & Smyczek, 2011). Attitudes are mental positions or emotional feelings, evaluations, and action tendencies that customers have about products, services, companies, institutions and issues. They are characterized to be enduring and are based on people’s values, norms and beliefs; and thus they are very difficult to change. Companies work endlessly to ensure that customers and the society at large have a good feeling about their activities including products and services they offer (Diappi, 2012). For example during the 2008-2009 global economic downturns, taxpayers in the US were compelled by the government to bailout banks across the country: taxpayer-paid government bailout of banks. This process caused many Americans to have a poor attitude towards big banks in the country. Contrastingly, Worthington National Bank found this as an opportunity to expand; it was a small bank that was not nationally recognized. The bank created and ran an advertisement “Did Your Bank Take Bailout? We do not. Just Say NO to Bailout. Bank responsibly!” this ad did magic; the company attracted and received billions of deposits from new customers. Perception It is a process by which an individual selects, organizes, and interprets stimuli into a meaningful picture of the world. Perception describes how people see or view the world around them. It involves, gathering of information through seeing, hearing, touching, smelling and sensing. Generally, perception is the process of how human beings interpret the world around them to make sense or meaning of it (Diappi, 2012). Customers are exposed to various advertisement messages through radio, TV, internet, and print media. In this regard, the way the customer perceives the message in the advertisement he/she may or may not decide to purchase the product or service being advertised. An example of this can be illustrated by manufacturers of weight loss products; these companies promote their products by using slim looking models and trim after using their products (Glowik & Smyczek, 2011). Such promotional message will; automatically influence customers to believe that after using the weight loss products they will look exactly like the model in the advertisement. Personality This is a psychological characteristic essential in determining and reflecting haw a person responds to the environment (Lantos, 2010). This factor is important in marketing given the understanding that every person is unique; in this regard, marketers look for personality traits that are common in different consumers. For example, customers can be adventurers, manly, tough, stylish, mature and/or sporting (Majumdar, 2010). Similarly, the outlook of products can also have massive influence on customer actions, emotions, and how he/she reacts to different ideas, things and people in a particular situation. Marketers usually attach human personality characteristics to a brand to make it is for customers to differentiate products from different companies in the marketplace. Personality helps in describing a person’s disposition, to show why people are different as well as encompass individual’s characteristics (Diappi, 2012). There are five main personalities used in describing people and they include conscientiousness, openness, extraversion, neuroticism, and agreeableness (Glowik & Smyczek, 2011). In this regard, those customers characterized of being open or sensational seekers are targeted with ads that appeal to the ideal self that they seek. For example, beauty and cosmetics companies like Uniliver Company promote their products in a manner that is appealing to sensational seekers. Learning This is regarded as a relatively permanent change in behavior results from experience. Contrary to this, consumer learning is a process through which customers acquire the purchase and consumer knowledge and experience that they apply to future related behavior (Diappi, 2012). In this regard, learning is a continuous activity, which continually involves and changes with regard to the acquisition of new knowledge. The newly acquired knowledge together with personal experience about a given product and/or brand are used as feedback to the individual and thus provides the ground for future behavior in similar situations. In general, learning is the process through which customers change behavior specifically after gaining information or experience (Lamb, 2012). It is the reason why they will not buy a bad product twice. Learning does not affect what the customer buys; however, it affects or influences how they shop. For this reason, people with less information about a product tend to seek more information about the same product as compared to those who have previously used the product. Burger King offer free coffee samples for customers to try in order to promote their new coffee products (Glowik & Smyczek, 2011). Conclusion The way customers behave in the market place is a critical aspect to business companies; understanding customer buying decision-making process together with the factors that influence customers to make certain decisions in the marketplace is key in helping companies to successfully produce and sell their products and services. This paper has largely discussed the consumer buying decision-making process, which comprises of six stages: need recognition, information search, evaluation of alternatives, purchase decision, purchase and post purchase evaluation. Accordingly, the paper using different products has vastly discussed the internal factors that affect consumer behavior. In this regard, motivation, attitudes, learning, perception, involvement and personality have been exhaustively been discussed. References Diappi, L. (2012). Emergent phenomena in housing markets: Gentrification, housing search, polarization. New York: Springer Glowik, M., & Smyczek, S. (2011). 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