Relevance of External Factors for Consumer Behaviour in the Airline Industry - Term Paper Example

Title: Consumer Decision-making - External Factors Name of Student: Institutional Affiliation: Instructor’s Name: Date Table of Contents Title: Consumer Decision-making - External Factors 1 1.0 Executive Summary 3 2.0Introduction 3 3.0 Relevance of external factors 4 3.1 Cultural factors 4 3.2 Culture and societal environment 4 3.3 The sub-cultures 6 3.4 Social classes 7 3.5 Cultural trends 8 4.0 Social Factors 9 4.1 Membership groups and reference groups 10 4.2 Family 12 4.3 Social roles and status 13 4.4 Gender 14 5.0 Consumer behaviour 15 6.0 Advertisement 16 7.0 Conclusion 16 References 18 Consumer Decision-making - External Factors 1.0 Executive Summary The company’s performance can drastically be affected by the external factors that affect consumer choices. Marketers for instance should take into considerations some external factors that affect the consumers’ decision making process due to high competition in the market. Airline industry for instance is one of the growing sectors of economy in the world today. For a company to make profit and remain relevant in the market, it should learn on some important external factors that affect the consumer process. The main external factors that influence consumer decision making process mainly includes: social-cultural, Technological, Economic and sub-cultural influences. Society determines many factors in consumer decision making due to some issues such as pressure from peers and influential individuals in the society. 2.0Introduction Airline industry has undergone rampant changes globally in the past two decades. The changing market is due to empowered consumers due to technological advancement, the brand distribution channels which has posted operations, and the business models (Assael, 2004). Research indicates that society plays a significant role in influencing consumer’s decision making process. The social class for instance plays a significant role in determining the airline to be chosen by the consumer when flying. Advertisement also plays a crucial role in decision making. Each and every society has a culture which determines what people values. Husband wife relationship also determine how people chose the airline they use (Bearden, 2000). This essay aims at explaining the main external factors that determines the consumer’s decision making process when choosing the airline services. 3.0 Relevance of external factors 3.1 Cultural factors There are several cultural factors that determine the consumer decision making depending with what the society from where the passenger comes from prefers as right or wrong. Research indicates that of all the internal and external factors that influence consumer decision making, cultural factors has the greatest influence (Belk, 2010). The marketers should therefore learn the way the values derived from various cultures influences behaviour. Social class must be put into consideration especially under sub-cultural factors. 3.2 Culture and societal environment Culture is very important in every society in that it determines how individuals choose what they like and it affects their behaviours. A human being will always be influenced by his/her family, peers, the society that he grows in, and his culture in that it will educate him the preferences, values, and the norms in their own culture (Shah & D'Souza, 2009). The expectations of the consumer in every single industry will always depend with the cultural beliefs in the society (Bearden, 2000). It is therefore essential to understand the valued cultural factors in the market for instance the airline industry so that the marketers lay down the strategies to meet the needs of the consumers. Understanding the needs of the consumers is essential in understanding the behaviours, perceptions, habits and expectations of the consumers in airline industry. A good example is whereby the western people value very much the brand when deciding the airline services unlike those from east whereby they don’t care about the brand (Goel, 2009). This is determined by the customs in that in west, people value prestige than in the east. Culture determines the preferred mode of culture in every society. They myths, laws, customs and behaviours of the societies are transferred from one generation to the next. Culture is persistent in that it determine how people behave, feel, think and what is good and bad. It includes all the factors that the consumers do without his/her consciousness since their customs, values and rituals are embedded in their day to day activities. Culture is factional in that human interaction develops values and norms that guide behaviour in every society. Culture gives order to every society by developing expectations that each individual must meet for what he or she does to be considered as normal (Belk, 2010). For instance, the airline services in Australia are ranked depending with the level of treatment they give to their passengers. Some expectations have been developed into laws, like for instance each airline in Australia must have special treatment to people with disabilities. Culture is learned in that the consumers are not born knowing the norms and values of their specific societies. Individuals learn what is deemed acceptable from parents and friends. Teachers also play a crucial role during learning in that children spend up to 25% of their time with their teachers (Goel, 2009). It is from search background that consumers learn to select the services they are valued in the society. Choosing airline services are influenced by the prior information given to the consumer by the peers, teachers, and families. However, culture is dynamic and hence keeps on changing with time (Belk, 2010). What was highly valued in the past two decades on choosing airline services is no longer valued today due to changes in culture. 3.3 The sub-cultures People are subdivided into some small cultures in the society that they identify themselves. People in sub-cultures shares common values based on the same lifestyles. People in sub-cultures share more similar values, attitudes, and purchase decisions than the bigger overall culture. Sub-cultures determines how, when and where people will use various services (Goel, 2009). Airline services are determined by the subcultures in that different small groups value unique services and brands of different airlines. This is because some specific segments have some specific preferences and tests for the airline services in Australia. Some communities like being served according to their traditional ways. People with unique cultures are spread throughout the world. Some like gays and lesbians look for their identities and research indicates that they always value their own services like being treated nicely by some airline with some specific brands (Belk, 2010). This may make individuals to decide on using airlines that favours their lifestyles than others which does not consider gays’ lesbians. Specific services pools specific sub-cultures since each sub-culture has specific preference and test. Some age groups or genders go for the services depending with the quality they hear from their friends and families they reside together. Research indicates that consumers are normally more open to services as well as marketing strategies that target them in their groups. 3.4 Social classes Various individuals in the society group themselves into specific groups depending with their hierarchy. The groups in the society are homogenous and they work in the groups basing on their social status. Even in cases where they have large groups, individuals in specific groups have the same lifestyles, common values, and interests depending with the social class (Belk, 2010). There are three common classes that individuals fit in the society namely; the lower, the middle and the upper social class. The individuals from lower class have unique lifestyles from their middle and the upper classes even in terms of desires and utilization patterns (Peterson, 1984). They differ in terms of purchasing power in that individuals from upper class tend to go for services with higher prices for prestige. On the other hand, those from lower and middle class consider price when choosing services (Bearden, 2000). People from lower class tend to prefer services offered with lower prices rather than prestige. Research indicates that behaviour and buying behaviour patterns is a way of identification to some specific social classes. The whole population in the society does not go for the same services in the society. Individuals group themselves into specific groups where they choose some specific type of services and associate themselves with (Berkowitz, 2011). For instance, individuals don’t choose the same kind of vacation, they watch specify TV shows whereby they find some specific adverts which influencing their decision making process. For example, people from lower class choose airline services that operate with lower prices and less comfort. On the other hand, consumers from middle and upper class choose airline services which operate with higher costs and much comforts. Those from upper class go for pleasure and they don’t care with the price of operation. The markets for instance have specific target groups for their services depending with the class. Some markets target the lower class whereby they lower prices of their services to meet the needs of the lower class people (Goel, 2009). Other industries target the middle and the upper class whereby they give the first priority the comforts needed by the upper class with higher prices. The services offered by companies attract individuals from specific classes automatically. Research done by Burrow & Bosiljevac, (2012) indicates that social perception of the service or a brand plays a significant role in the consumer decision making process and the general behaviour. The consumer buying behaviour is known to change according to the class. Consumers from lower class put more concern on price than those from middle and upper class (Belk, 2010). On the other hand, customers from upper class are usually attracted by some elements such as features, quality, innovation or the social benefit of the service. 3.5 Cultural trends These are trends that are widely followed by the people in the society which are commonly amplified by their simple popularity and by the conformity in the society due to social pressure. Research indicates that the more some individuals in the society follow the trend, the more the new individuals will also follow it. Cultural trends affect the general shopping habits and the behaviour of the customers and hence, it might be related to the release of new services in the market and becomes the source of innovation for the brands. The cultural trends in the society determine the type of services to be valued due to social pressure developed by groups living together. The trends are sometimes affected by the media by enlarging its visibility to some specific groups in the society. The consumers will be influenced either consciously or unconsciously by the trends. A very good example is the tweeter and Facebook which has become a cultural trend especially for the young people in the society. The young people currently views the social media as a must have due to its trend in the society. Individuals in such cultural trends tend to be influenced by what they see in the social media. Almost all the industries globally have taken advantage of the social media to advertise their services (Assael, 2004). Airline industry for instance advertises their services and receives feedback from the social media thus deciding on the path they follow while offering their services. Young people can be influenced by the social media to adopt some lifestyles they had not developed before. Brands should be constant as much as possible in that individual groups in the society values what they know than new things in the market. Developing cultural trend from scratch is very difficult and hence the airline industries must keep their services at bar (Hogg, 2005). 4.0 Social Factors The consumer behaviours are greatly influenced by the social factor which falls into three categories namely: family, reference groups, status and social roles. 4.1 Membership groups and reference groups People living in the society have specific groups they associate which in turn influence the way they behave. The membership in various groups is related to the social origin, residence, age, gender, leisure and hobbies among other things (Singh, 2008). Research shows that the influence level may vary from one group to another. However, they are known to observe some common consumption trends among members which share the same group. The understanding of some specific groups can help the airline industries to send their advertisement message to the right group. It will also help the industry to lay down some long term and short term strategies. The reference groups are those groups that provide to some specific individuals some points of comparison about some specific similar behaviours, desires, lifestyles and consumer habits (Hogg, 2005). Such reference groups influences how an individual develops some images about some services and products in the market. Even if it is membership group or not, individuals living together are known to imitate other people in the groups (Rao & Krishna, 2005). The opinion leaders in the society for instance may influence individuals to go for some services by first purchasing such services. Opinion leaders act as role models in the society and hence people may follow them for them to be associated with such opinion leaders (Hogg, 2005). Opinion leaders have money and hence they are usually the first ones to test new unproven services due to curiosity. Some technology companies through research have realized that the teenagers are willing to experiment some services and hence are the main opinion leaders for the success of the new technologies. Some individuals might be influenced by some groups in which they are not part of but they admire their lifestyles hence wishes to be part of (Goel, 2009). Scholars call this group an inspirational group. It has a direct influence to individual consumers who wishes to be part of directly in that he might wish to be like the group members thus will go for the same services even if he or she does not join the group. For instance, a good example with the case of airline services is whereby young individuals who have just began to use airline services decides to use the expensive airline services used by older individuals in order for them to get closer to this older group (Grunert et al, 2005). This is all about imitation and the need to be associated with popular groups. This influences consumer decision making in that he or she ends up going for services because other groups they admire are using the same services so that he or she can be accepted by this group. Some airline industries in Australia have understood this very well and hence, they communicate on the social benefit offered by their services. There are several roles defined by the reference groups that influence the consumers buying behaviour. There is always an initiator who gives the suggestions on the products or services to be adopted (Gero et al, 2005). There is also the influencer within the reference group whereby his or her point of view on the service will have influence on the choice of service decision making. The actors and football players for instance are very influential in the society in that many people may imitate the services they use and the group members may rely on them (Weimann, 1994). There are decision makers within groups. These are the people who will choose the service they go for. In many cases, they are the consumers but in some instances, they may be other people. A good example is where a leader in a soccer group decides on the kind and the colour of the scarf the group members will wear during various games (Mooij & Mooij, 2011). The buyer is the final person who will pay for the service. This will be the final consumer and hence they all interdependent. Many airline industries search for target opinion shapers like the initiators and influencers to spread the use services to specific social groups (Nargundkar, 2010). A single person in small social groups can influence consumers’ decision making. Some can also work in partnership with the reference leader like celebrities for some larger groups. 4.2 Family Research shows that the family is the most influencing factor in an individual’s life. Family is the basic unit which forms an environment of basic socialization in which an individual raised will evolve, develop her personality, and acquire the basic values (Hogg, 2005). It is in the families that individuals develop attitudes and critical opinions on diverse subjects such as social relations, politics, his desires and the society in general. An individual will also develop consumer habits of various services from their families as well as perceptions on various brands and the services he went for (Grunert et al, 2005). Research indicates that individuals make choices depending with what they see in their families especially when they were young. Individuals are therefore known to go for the services they once saw their significant others using. A good example in this case is whereby when you fly with your parents during your childhood you hear them say some flights are risk to human life in that they can crash. When you grow up, you will avoid such flights unlike an individual who has been using with his parents while he was young. For some services like those of airline industry which are sometimes risk, it is important to develop loyalty from the family level (Kazmi, & Batra, 2008). This is because the family is the real challenge in decision making process because what is learned by an individual when young is likely to be adopted for lifetime. This is because it is essential to see some services and products as family brand so that a consumer habit is developed for the children when they become adults. 4.3 Social roles and status Each and every individual has a role within his work, family, his group of friends or even a club. An individual has a role depending with his profession and age in the society. The husband and wife have specific roles within the family (Majumdar, 2010). In many cultures, the farther in the family is the head and hence has a role of deciding what services to be adopted. However, the mothers can also influence the decision making process. Furthermore, the mothers within the family decide on some specific services which the norms in the society give them the powers (Assael, 2004). The expectation of the people around also gives specific genders some specific roles in the society. Those who deviate are seen as law breakers and are sometimes even punished. The social status on the other hand shows the rank and the essentiality an individual has in the society or in some specific social groups. Some status is more valued than others. Those that are highly valued have greater influence on consumer decision making process than those which are less valued (Grunert et al, 2005). The influence is higher on the visible products than on the services. An individual using less expensive services are not taken keenly in the society unlike those who use expensive services. Airline services are prestigious and hence those who choose expensive services are highly respected (Samli, 1998). This is because majority of the people in the society does not use airline services instead they use roads. The social status therefore plays an essential role in influencing consumer decision process. Those who believe to have higher social status go for expensive services in that they don’t want to be associated with those individuals from lower social status (Berkowitz, 2011). Many brands for instance have understood the influence of the social status in the airline industry and hence they have created an image associated with their services reflecting their social status. 4.4 Gender Research shows that men and women have different psychological orientations which result in them having different needs such as how they want to be served. The social and economic roles played by men differ from those played by women as laid down by the culture (Bearden, 2000). Some adverts for instance target specific genders due to some reasons best known to them. They target specific gender basing on what they carry on n the society and what they like more. As a matter of fact, men and women do value service differently. Research indicates that men and women have share some similar motivations in terms of choosing the services they think are the best to them. In the case of the airline services, women and men share common values on matters price, the quality of the services, and in most cases a low pressure environment. However, research indicates that men and women do not feel the same about general shopping (Dierks, 2005). Women tend to be more specific and cautious while making choices in some services and the way they would like to be served. Men dislike the experience of shopping and they only do it when it is necessary. This is a clear indication that gender affects the consumer decision making. 5.0 Consumer behaviour The airline market is very competitive due to growing number of new companies offering the services. As a matter of fact, the consumer behaviour is very essential factor for any marketing activities. The consumer decision making depends with his or her behaviour and the stimuli which motivates him or her to go for the service. The basic model of stimuli is the simplest approach which can be used to address the consumer decision making process. An individual makes decisions depending with what he or she is exposed to (Dierks, 2005). Consumer behaviour put focus on the consumer as an individual and on their sociological factors like family and culture which influence their buying behaviour. In some cases, the consumer decision making is simple. However, in the case of airline purchase, the whole procedure is taken with care in that it is very expensive since they are linked into trade-offs. There are varied buying behaviours applied by consumers while buying some products or for some services. For the case of the airline which is relevant in this essay, the consumers apply the complex buying behaviours since the process is expensive and needs full involvement of the consumer (Hogg, 2005). Unlike other service which consumers apply the dissonance reducing behaviour, consumers choosing the service clearly evaluates the other possible alternatives in the market. 6.0 Advertisement Branding, advertising and marketing stimulates more than ordinary products in the culture of the audiences. The images that are used in various adverts are normally idolized hence creating an imaginary impression on the kind of life consumers ought to live. There exist potential within the advertisers to promote negative image which affects the consumer’s culture unknowingly. Majority of audiences often fall victims of certain adverts, branding as well as activities associated with marketing (Rodgers & Thorson, 2012). The reason behind this is that most adverts find the audience unprepared. For instance, a skilled advertiser and or an aggressive public speaker would capitalize on the weaknesses of the audiences like their ravenousness and desire, to sway them to buying what they never intended to (Kazmi, & Batra, 2008). The will of the audiences are therefore pre-determined by the advertiser’s marketing techniques and brands. For the case of airline services, the customer decision can be influenced by adverts in that airline services are currently facing competition in the market (Rodgers & Thorson, 2012). Some might advertise their services more than others thus making the consumers feel as if the advertised is the only one existing in the market. Advertisement makes an individual to form an impression which can be very difficult to be erased ones developed. 7.0 Conclusion In conclusion, many factors influence consumer decision making process. The culture in which an individual is raised as well as the family plays significant roles in influencing consumer decision making. The shopping habits, purchasing behaviour, opinion leaders and the social class also influence consumer decision making. The subculture and the social class also influence an individual to go for some services and to make choices. The airline services in Australia can utilize the marketing theories of consumer culture to highlight the lifestyle advantages of products. For this reason the consumers can be swayed to see services as the source of fulfilment and a better life that is meaningful. References Assael, H. 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