Five Steps in the Consumer Decision-Making Process - Coursework Example

Executive summary This paper intends to explore the main steps in the consumer decision process that include recognition, information search, alternative evaluation, purchase decision, and post-purchase behavior. It also seeks to examine selection of a product and its marketing strategy, which involves segmentation, targeting, and positioning. It also involves the involvement level of the product as well as segmentation bases (geographical and demographic bases). The paper then explores the targeting process that entails both the differentiated and undifferentiated targeting processes. It also highlights a perceptual map and positioning statement. Lastly, the paper discusses various internal factors of consumer decision making process including motivation, personality & self-concept, perception & consumer imagery, learning and attitudes. Section 1 Five steps in the consumer decision-making process According to Chater (2010), the process consists of: Need Recognition: This is the initial step in the consumer’s purchasing process. Recognition takes place when there is a gap between the desired and ultimate and consumer’s real circumstance. Information search: This is the second vital stage in a consumer’s purchasing process. This will involve searching for information based on the complexity of the available options, as well as the involvement level. Alternative evaluation: Upon collecting information, a consumer can evaluate various options available, assess the most appropriate to his desires before choosing the ones he perceives to be the best. Purchase decision: Here, the consumer selects the brand or product that appears most appropriate. A consumer then proceeds to the real purchase. The decision relies on the available information and the choice made in the previous step that was based upon his capabilities, perceived value, and product’s features. Post-purchase behavior: Here, the shopper evaluates the sufficiency with the original desires and whether the decision made is right or wrong. Section 2 Product category/service category selection and involvement level Here, the consumer’s purchase behavior is largely affected by the level of involvement of the product or service. Frequently purchase or habitual products, such as, cooking oil, are categorized under low involvement product category, whereas novels and movies fall under the medium product involvement category. On the other hand, the luxurious products, such as, a car is classified under high involvement product. In this case, if the consumer needs to purchase an Apple laptop, the purchase is then categorized as a high involvement product (Chater, 2010). Consumer Market Segmentation This entails four variables that are geographic, psychographic, demographic, and behavioral. Geographical base In terms of geographical segmentation, the market is normally divided into various geographical units. Some of these units include regions by state, nation, and neighborhood. Geographical segmentation may also involve a focus on population density, which could include rural, suburban, and urban considerations. This may also encompass city size that may require consideration of population, area size, and growth rate. Climate may also be taken into account whereby issues like regions with the same climate pattern are considered (Chater, 2010). A firm, either serving all or a few geographic segments, requires focusing on distinct geographic wants and needs. Upon dividing consumer market based upon geographic bases, firms should localize their marketing strategies, such as, advertising, product, sales and promotion efforts (Havaldar, 2005). Demographic segmentation As regards the demographic segmentation, Panda (2008) says that consumer market may be sub-divided into small categories on demographic bases including gender, age, occupation, income, education, generation, religion, nationality, race, ethnicity, family life cycle, family size, social class, and home ownership. These factors are very vital in the segmentation of customer groups. Consumer wants, needs, and consumption rate depend on demographic factors. Thus, it is crucial to consider them when determining an appropriate marketing strategy. Targeting process This may involve differentiated and undifferentiated marketing. In undifferentiated marketing a firm seeks to serve several buyers with one marketing mix. Some companies have been effective with the method but it gets increasingly hard to uphold market share and position as the competition level progressively becomes intense. On the other hand, in differentiated marketing involves a firm selecting to serve at least two market segments defined. Here, it uses a unique marketing mix for every segment that the company seeks to penetrate (Panda, 2008). Positioning This entails a perceptual map as well as a positioning statement Positioning statement Think Differently Section 3: Internal factors Some of the internal factors affecting consumer buying process include motivation, personality and self-concept, perception and consumer imagery, attitudes and learning (Kurtz, 2012). Motivation Motivation entails the driving force, which causes behavior that meets a consumer need. Consumer needs are best illustrated by Maslow’s hierarchy of needs as discussed below. As per Maslow, it is apparent that consumers are guided by various desires that should be met before the other ones. These needs include physiological needs, safety needs, love and belonging, esteem, and self-actualization needs. Upon meeting physiological needs, consumers always seek the satisfaction of learned needs (Kurtz, 2012). David McClelland in his theory of needs suggested that a person’s particular needs are obtained with time. He also said that the needs are shaped by an individual’s life experiences. Majority of the needs may be categorized into three: affiliation, achievement, and power. An individual’s motivation and success in some job functions are affected by the aforementioned needs. to start with, in achievement needs, individuals with great need for achievement (nAch) always strive to excel and hence tend to shun both high0risk and low-risk circumstances. Achievers usually avoid low-risk circumstances as they believe that the easily achieved success is not real achievement. In high-risk cases, achievers perceive as lack instead of one’s effort. In fact, people prefer work with medium chance of success (50% probability). Achievers desire feedback so as to check their achievement progress. They prefer either working alone or among other high achievers. In the case of affiliation, individuals with great need for affiliation (nAff) require harmonious relations with others and should feel a sense of acceptance from others. Such individuals tend to comply with their work group’s norms. High nAff people prefer activities that offer important personal interaction to the contrary. They also tend to do well in client interaction and customer service scenarios (Chater, 2010). In terms of power, Gerber & Bothma (2008) say that an individual’s need for power (nPow) may be one of the two kinds, institutional and personal. Individuals in need of personal power require directing others, and this is seen as undesirable. On contrast, those with institutional power always want to organize the others’ efforts to enhance the goals of the firm. Managers with a great need for institutional power seem to be more successful than the ones with great desire for personal power. Therefore, the two theories are relevant in the consumer decision making process as they propose categorize individual needs. Usually, consumers make their purchasing decisions as guided by the theories. Personality and self-concept This is an individual’s constant behavior or reactions to recurring circumstances. Studies indicate that major traits influence product and brand type preferences. Additionally, cross-cultural analysis proposes that residents in various countries possess a national character, or a different personality features shared by people in the society or country (Gerber & Bothma, 2008). According to the 5 big personality traits theory, there are five categories. Extraversion is a trait that involves characteristics, such as, sociability, excitability, talkativeness, assertiveness, as well as high levels of emotional expressiveness. There is agreeability, which is a personality trait involving altruism, trust, affection, kindness, and other prosocial attributes. The third trait entails conscientiousness, which involve features like high degrees of thoughtfulness, with excellent impulse control, as well as goal-guided conduct. Neuroticism trait involves high levels of anxiety, emotional instability, irritability, moodiness, and sadness. Lastly, openness is a personality trait characterized by insight and imagination, and various interests (Gerber & Bothma, 2008). Just like attitudes, personality functions to demonstrate a constant behavior of a person with respect to the environment. For example, a personality with high level of self-confidence tends to constantly be outspoken with respect to his views on new processes, products, ideas, and practices. In addition, where there is an aspect of risk when taking a new product, the self-confident individual will be more with risk takers rather than the risk averse (Proctor, 2014). Even though hopes have been explained by theorists that would ultimately be possible to associate purchasing and usage patterns with personality kinds, this has yet to be ascertained. Self-image is a combination of the way an individual would perfectly desire to be, the way one believes others to perceive him and the way he really is. The consequent self-image may be completely inaccurate. Individuals tend to exaggerate the degree to which they are close to the perfect self and underestimate the level to which others know of their weaknesses, and their actual self may be distinct from either of the two (Panda, 2008). Regarding the strategic marketing uses of personality aspect, since the product in this case is the latest Apple laptop, the marketing strategy needs to match the consumers’ personality. Since this is an innovative product, the strategies should match the consumer dogmatism, variety seeking, and innovativeness. For every marketer, the significance of self-images is in the chances to associate product features with them (Proctor, 2014). Self-concept Personality traits are always seen in an individual’s self-concept that entails the way individuals perceive themselves and the way they believe other people perceive them. Whenever there is a disparity between the way one perceives himself and what they would he would like to be, this will possibly influence how much he values himself. Thus, there is a close relationship between self-image, self-esteem, and ego-ideal. An individual’s ideal self might not match his actual experiences and occurrences in life. Therefore, a disparity could exist between one’s ideal self and real experience. This is referred to as incongruence (Proctor, 2014). On contrast, whenever an individual’s ideal self and real experience similar, a situation of congruence exists. Seldom, if ever does a complete situation of congruence is present, all persons experience some level of incongruence. The growth of congruence depends on the unconditional positive view. Some of the factors affecting its development include other people’s reactions, the way people compare themselves, their social roles, and degree of identifying with others (Fallon & Rutherford, 2011). Perception This involves the process in which a consumer selects, organizes, and interprets information inputs in order to generate meaning. Consumers tend to select the kind of information to attend to, organize, and understand it. Information inputs entails the sensations obtained through taste, sight, smell, hearing, and touch. In selective attention, consumers choose inputs that are exposed to their awareness. More probable if it connected to an event, satisfies present needs, and degree of input alterations. Thus, consumers pay attention only to information that satisfies their immediate needs (Gerber & Bothma, 2008). Selective distortion involves changing or twisting present attained information, which is dissimilar with beliefs. Incoming information is always distorted to match the existing opinions, beliefs, and expectations. Advertisers using comparative advertisements should be very cautious that consumers must not distort facts and see that the advert was for the rival (Raju, 2004). In selective retention, consumers tend to recall inputs that aid their beliefs and forget those that do not. Consumers tend to forget things so easily. The information retained is commonly those that support the consumers’ present beliefs and attitudes. Therefore, a consumer that is strongly loyal to a specific brand tend to easily remember the advantages claimed for the product in promotional campaigns, but forget those made for a rival brand (Panda, 2008). Consumer imagery According to Bygrave and Zacharakis, 2004), consumers tend to perceive images regarding product, prices, services, product quality, manufacturers, and retail stores. They also buy products to boost their self-mage, which is associating themselves with the product. The product image in the consumers’ minds is known as positioning. Image of the product gears up a firm’s sales, but the product must also perform as expected. This implies that product benefits must be more focused than its physical features. According to umbrella positioning, firms sell numerous related products under one brand name. In competition-based positioning, a firm chooses a category and an aspect of difference. The category offers a reference frame through the identification of other brands that could be employed in achieving similar goal as a central brand. The difference point specifies the way a brand is greater than others within a given frame. Value based position involves positioning as per the consumer’s perception of the product’s value. The primary model has three aspects including beliefs, attributes, and weights. Attributes entails the features of the attitude object (Lamb, Hair, & McDaniel, 2012). Learning As per Lamb, Hair and McDaniel (2011), this involves behaviors resulting from thinking and repeated experience. Behavioral learning is the process of growing automatic reactions to a circumstance created through a frequent exposure to it. The four factors affecting the way consumers learn from regular experience include drive, cue, response, and reinforcement. In marketing, two concepts of behavioral learning are used and these are stimulus generalization and stimulus discrimination. In cognitive learning, an individual connects at least two ideas or just observes the results of others’ conduct and adjusts his accordingly. Brand loyalty entails a positive attitude and constant purchase of one brand with time. Brand loyalty varies with countries. Attitudes These involve learnt predisposition to react to a class of things in a constantly positive or negative way. This is shaped by people’s beliefs and values that are learnt. It entails consumers’ subjective perception of the way a brand or product works on various attributes. In terms of attitude change, consumers engage in changing beliefs concerning the degree of brand to possess certain features. This is also regard the perceived significance of these features, as well as adding fresh features on the product. Multi attribute attitude model is relevant in that it portrays consumers’ attitudes to a product (Fallon & Rutherford, 2011). Conclusion Evidently, the consumer decision making process involves five steps include need recognition, information search, alternative evaluation, purchase decision, as well as post-purchase behavior. Selection of product entails the consideration of the involvement level. Segmentation, targeting and positioning are also vital in developing an effective consumer market. Besides, consumer buying behavior is influenced by various internal factors including motivation, personality & self-concept, perception & consumer imagery, learning and attitudes. References Bygrave, W. & Zacharakis, A. (2004). The portable MBA in entrepreneurship. Hoboken, N.J: Wiley. Pp. 80-100. Chater, N. (2010). Consumer Decision-Making in Retail Investment Services: A Behavioural Economics Perspective. Pp.1-10. Fallon, M. & Rutherford, D. (2011). Hotel management and operations. Hoboken, N.J: Wiley. Pp. 326-340. Gerber, K. & Bothma, N. (2008). Consumer behaviour. Cape Town: Pearson Education South Africa. Pp. 188-200. Havaldar, K. (2005). Industrial marketing: text and cases. New Delhi: Tata McGraw-Hill. Pp. 92-110. Kurtz, D. (2012). Boone & Kurtz contemporary marketing / David L. Kurtz. Mason, OH: South- Western Cengage Learning. Pp. 274-290. Lamb, C., Hair, J. & McDaniel, C. 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