Consumer Decision-Making - External Influences - Essay Example

Consumer Decision-making – External influences Your name Student number Name of the unit Name of the unit coordinator Consumer behavior refers to inclinations and choices that consumers make in their product purchases and subscriptions (Schiffman and Kanuk, 1997). Consumer behavior is an area of interest to stakeholders because it determines the success that they end up enjoying over the course of their ventures. According to Solomon, et al., (2010) consumer is ultimately the single most important factor in the survival or lack thereof of it in a business. This is because every process of manufacturing that an organization takes on is dependent on consumer approval if it is to make gains. In the 21st century, the consumer has become immensely informed. This is as a result of factors such as education, technology as well and connectivity to the internet. As a result of this, the consumer is more attentive while making decisions that regard their purchase. Manufacturers have thus been kept on their toes to ensure that the products they put forth meet consumer expectation. If a company is going to become successful in its field of specialization, it would ultimately have to be well inclined and in tune with consumer behavior. Companies such Apple, Sony and Mercedes Benz have understood the importance of consumer behavior. It is for this reason that said companies have enjoyed decade upon decades of success. Research has proven that regardless of the efficiency of a company, their flexibility to the variation in consumer behavior could single-handedly be their formidability’s determining factor. This is not to say that other factors (excluding consumer behavior) are not important. Rather, that consumer behavior should be an issue of higher regard. This paper’s focal point is outlining the most important factors, on an external base, upon which consumer behavior is determined. Social Class Social classes have determined consumer behavior for time on end. The social grouping that one belongs determines their income as well as their purchasing power. In general people are grouped as either belonging to the lower, middle or social classes. The upper and middle classes are in a position to afford the majority of higher quality products and services. In this regard, they are able to have variety in choice and preference. The lower class is constricted by their income level to products that meet their income capability. Research has proven that in spite of the fact that the middle class is well endowed with freedom of choice, their line of preference is constricted to high-priced products and services (Schiff man & Kanuk, 2007). Lower class people do not read the same content, watch the same content or use the same products and services as middle and upper class society. It is important that organizations make a point to ensure that they are well aware of the societal grouping that they are targeting with their products. If an organization is already established it must also ensure to keep in tune with changes in preferences of their target grouping. For instance, high -end clothing stores must always ensure that their products are fairly different from those in low –end stores. This factor has been the most influential in consumer behavior. Societal grouping can serve as both an internal and external factor of influencing consumer behavior. However, in the regard in question it is an external factor because consumers feel pressured to incline towards the societal class that they are regarded in. It is unlikely to come across an upper class person shopping in a low-end neighborhood, partly because of the outlook they are trying to maintain. Culture According to Page (1995) the behavior that we have when it comes to buying is highly determined by our culture. The way of life that one is used to is also a huge determining factor in consumer behavior. This is the culture that one has already become mentally and physically accustomed to. It is extremely difficult for any person to divert in whatever sense from a cultural identification. It is only under extreme circumstances that a change could actually occur (Kotler, 2000). According to statistical research, the rich continue to become richer and the poor in turn maintain their state of poverty. Although this phenomenon has been associated with economics, culture is actually a determining factor. The rich are accustomed to making wise decisions, avoiding impulsiveness and studying economic patterns. The poor on the other hand do not pay attention and pass this carelessness on to their generations. This is why poverty eradication on a global scale has proved to be difficult. Culture can also be analyzed differently. If one is already used to leading a lavish lifestyle, adapting to an economical is a hard task. As a result, the individual in question inclines more towards lavish products and services. In the same way, one who is used to leading an economical lifestyle inclines towards economical products and services (Hawkins et al, 2001). Products that are successful in the market have been passed on from generation to generation owing to the culture of consumer behavior (Hofstede, 1980). For instance young women tend to cook using the very same products that their female guardians used. If an organization intends to be in the market for a long time, they must ensure that their products are cultural-oriented. Human beings are very much more likely to use a product that does not benefit them rather than use a new one that they are unsure of because of stability and adaptation. Demographic The other influencing factor is demographic. This is with regard to the age group that one belongs to. Certain age groups are more inclined towards certain trends. In this way, they end up purchasing trendy goods and products as opposed to those that favor their personal taste. This is especially common with younger age groups (Kotler, 2000). The mature age groups on the other hand are more inclined towards favoring their own personal taste rather than upcoming trends. It should however be noted that in the majority of cases, the age group preference is usually similar. With younger demographics, the preference could very much change with time. With older demographics on the other hand, preference is usually constant. This is because the older generation is aware of what it is that they like and are accustomed to as they have more experience. Because of the changes in preference with younger demographics, it is very risky for an organization to choose them as the specific target audience. However, doing so does not necessary spell doom. It simply means that the organization in question must be able to adapt and be flexible to the variations of the age group. Alternatively, an organization could choose to focus on the various stages of life that a certain demographic goes through (Hawkins et al, 2001). This is by adapting their product each and every time the age group graduates to another in order to maintain the same clientele and create goodwill. However, this is very uncommon because the organizations success and relevance would be completely dependent on the actual existence of said clientele. In the 21st century demographic is the most important external factor in the influence of consumer behavior. Family Family also substantially influences consumer behavior. The position of a person in a family is very important. If a person is the breadwinner they tend to be more economical. This is because other members of the family are very much dependant on them. Their spending therefore determines the survival or lack thereof of other human beings. On the other hand is one is the youngest child, they feel more inclined to spend more as they lack responsibilities and hence choose lavish lifestyles (Hawkins et al, 2001). The income levels of other family members also influence a person’s behavior. If one is the only income earner, regardless of their position, they feel inclined to support the rest. They may also feel overwhelmed with psychological guilt if they have poor spending habits or lead high end lifestyles. Therefore, they choose to spend their money on brands that are cheaper. The orientation of one’s family is also an important factor. This is such as being American, Latina, English, French, Italian or African. This is because this in turn determines the culture that one is suited to. If one for instance lives in France but is of Italian origin, owing to the fact, that Italy is foreign land, Italian products may be expensive. If they wish to carry on with their culture it would mean that they would chip in more of their income towards their purchases. This is only one partial way in which orientation influences consumer behavior. Family stability also determines consumer behavior. If a family is stable and supportive, from a psychological perspective, one chooses to lead a lifestyle that is monetarily sane and in turn so are their purchases. If the family does not offer psychological stability, they members make the wrong consumer choices and most likely experience variations in preference. Standards of Living The standard of living is a determining factor in consumer behavior. If the standards of living are extremely high, then the focus of the citizenship is usually on the actual direct needs that they have and not luxuries. Products and services that are usually meant for luxurious purposes are therefore usually on the down low in terms of purchases in the country in question. In the same way if the standards of living are low then the population can focus more on luxurious prospects. Standards of Living influence the inclination towards cheaper or expensive products ((Engel et al, 1975). If a country has high standards of living then they focus more on cheaper brands and therefore expensive brands may find that they are not doing so well in the area in question. In the same way if they are low, then expensive brands are able to thrive in their economies. People that are experiencing high standards of living are more attentive to the capability of a product or service to be long lasting. This is because it will save them the cost of having to renew or repair said product or service upon depreciation. People that are experiencing low standards of living could afford to gamble with the long lasting nature of a product or service. They are more concerned with the lavishness or image that it portrays. However, although standards of living are usually uniform nationally. Their strength in impacting consumer behavior is diluted by the other factors mentioned above such as culture, social groupings and demographic. Some of the above factors, it should be noted, could very well fall in the internal factors category but this paper has only analyzed them as external factors. In conclusion, there is a revolving factor that plays a vital role to in the name of opinion leaders. They play an important role in the consumer decision making process through offering encouragement for communication among them (opinion leaders) and their followers in the consumption process. This means that marketers need to importantly learn how to put into use this relationship by using the opinion leaders to drive forward their marketing techniques, they should do this in order to reach out to the consumers in a short span of time and also to be able to build a customer base and retain customer loyalty as well. 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