Consumer Behavior in Smartphone Purchase - Coursework Example

Consumer Behavior in Smartphone Purchase Author’s name Institutional Affiliation Executive Summary This report explores the consumer decision making process in relation to smartphones purchase. The paper looks at the decision making process and associated models outlining the relevance of each stage on the purchase of smartphones. The report also explores the external factors that influence decision making. Table of Contents Executive Summary 2 Table of Contents 3 Introduction 4 Consumer Decision-Making Process 4 Decision Making Models 4 The Process of Consumer Decision-making 5 External Factors Affecting Consumer Decision Making Process for Purchase of Smartphones 8 Culture 8 Sub-Culture 8 Social Class 9 Family 10 Reference groups 10 Conclusion 11 References 13 Introduction Consumers are the most important individuals for marketers and the business world in general. At the center of consumption of various products lies the need for decision making. These decisions are called for by the availability of a number of alternatives the consumers can comfortably consider purchasing. The decisions are not only of importance to the consumers but also to the policy makers and marketers worldwide. The contemporary consumer is one that is very inquisitive of any product in the market and will be more oriented to purchase the one that satisfy their needs and perceptions. The process of decision making is multistep each stage having its own contribution to the final decision made. Consumers who are self aware always do their best to evaluate the alternatives and come out with a viable choice based on different approaches. The advancement of technology further complicates the process of decision making since much information is at the disposal of the consumer. Additionally, there are external factors that can broadly be categorized into social, cultural and economic factors, which have influence on the consumers’ decision making process. This paper evaluates the process of decision making when purchasing any goods regardless of the type and then looks at the external factors that influence consumer decision making, using smartphone as the key product. Consumer Decision-Making Process Decision Making Models It is essential to look at the models of decision making. There is the passive model, where the customer is more likely to serve the marketers objectives (Belch &Belch, 2009). The decision is usually less founded and may be termed as irrational simply because it is manipulated by the marketers. In the case of smartphones, this is very evident following the promotions and marketing campaigns in the mass media and the internet (Hawkins et al, 2013). Even through the customers consider utility it is not founded on their own idea. Secondly, the emotional model of decision making mainly reflects the purchase of goods and services where the buyer has had previous encounter with the good (Belch &Belch, 2009). The buyer has an intrinsic connection or attachment to the product and is likely to choose it over the others (Hawkins et al, 2013). The end result of this is usually impulse buying because there are little pre-purchase evaluations and information searches other than the current feeling of the buyer and the time in question. Smartphone users may use this model when making replacements of their defective ones (Hawkins et al, 2013). Lastly is the cognitive model of decision making where the customer has the knowledge of the product (Belch &Belch, 2009). The buyer only chooses a product as per their need. The focus here is based on shortcuts that have the propensity of giving the consumers the best information about the alternatives. The Process of Consumer Decision-making Studies and research on customers and thus consumer behavior reveals that consumers undergo a five stage process where they make decision prior to purchasing goods or services (Kotler, 2009). However, in the event when the purchases are routine, the consumers may reverse or omit one or more steps. The first process is need or problem recognition. In this stage the buyer recognizes the need to purchase a good or a service (Kotler, 2009). This is usually promulgated with a current situation that really calls for a desired response. External and internal stimuli are also responsible for this stage (Hawkins et al, 2013). The needs are classified according to Maslow’s hierarchy of needs where some have to be satisfied before others (Hawkins et al, 2013). The needs could be social or functional depending on the consumer. In the case of smartphones, the need could be to upgrade the smartphone so as to explore additional applications that may fit in the work setting (Solomon et al, 2010). The second stage then becomes information search. This is described by most authors as the core of the contemporary consumers buying process (Maity & Dass, 2014). The first step is usually to conduct an internal search where the products already known to the consumer are identified; evoked set (Moon, 2010). The next one is external information search whose success depends on external sources such as marketing campaigns, promotions, and social media (Belch &Belch, 2009). This stage involves the customer actually scanning the environment in order to make an informed decision (Solomon et al, 2010). Internal search mainly depends on consumers’ memory whereas the external sources could be friends, family, work mates, mass media, online reviews, and display shops (Moon, 2010). For smartphones information can be gathered from nearly every source (Mooij & Hofstede, 2011). The next stage is to evaluate the alternatives from the information search. In this case the buyer refers to the evoked set and evaluates whether or not there is any other product or service that can satisfy their needs better (Hoyer et al, 2013). It is in this stage that the consumer also generates a list of products they have little opinion on as well as those that they are very sure cannot make any impact on their need. Smartphone customers usually evaluate more choices being that the market is wide and technology keeps on changing (Hawkins et al, 2013). Similarly, there are different brands sold at different prices and with different features as well as specifications. This then means that the basis of evaluation will greatly differ among individuals (Solomon et al, 2010). The customer then undergoes the process of making the purchase decision whose success depends on the aforementioned stages. At this point the customer makes up their mind on the product they have settled on and are going to purchase (Megits & Liu, 2014). This stage is usually influenced by many factors that may include acquaintances, family, friends, opinion leaders, and reference groups. The propensity of a customer to one brand may also influence their decision over other alternatives (Maity & Dass, 2014). Smartphone customers analyze the newly launched smartphones and their capabilities (Maity & Dass, 2014). The old models are rarely of consideration to the customer. In the case where the consumer is loyal to a brand such as Sony, Samsung or Microsoft Nokia, they will obviously choose the one that satisfy their need (Maity & Dass, 2014). The decision does not simply end at the above stage; the customer has to undergo the stage of post purchase behavior. In this stage, the customer evaluates the satisfaction level of their need categorizing the satisfaction as either meeting or exceeding their expectation as well as disappointing them (Solomon, 2009). It comes from customer experience and product performance. Dissatisfaction is registered if the customers’ needs are hardly met (Hoyer et al, 2013). Replacement may be the only solution; else if the product meets the buyers’ expectations the consumers will continuously use the product. In case the performance of the product is high, the consumer will have brand loyalty and is likely to disseminate the same information to other potential buyers (Solomon, 2009). Having bought a smartphone, the consumers analyze its performance and rate it in websites and even among themselves depending on their experience with the smartphone. Positive reviews and ratings are attracted by good specifications, features and performance (Megits & Liu, 2014). External Factors Affecting Consumer Decision Making Process for Purchase of Smartphones Culture Consumer dynamics view culture as one of the core influences on an individuals’ purchase decision (Kacen & Lee, 2002). Culture is defined as the multifaceted beliefs of human societies including their role, traditions, norms, values, customs and behavior (Gajjar, 2013). It is very essential when it comes to consumer behavior (Kacen & Lee, 2002). A given society will share its purpose among its members and these forms the basis of factors that affect consumer decision making process. The cultural related factors are beyond the control of the customer and directly impact their lives and therefore purchase decisions either directly or indirectly (Gajjar, 2013). For international marketers it is essential to understand that culture differs across borders and regions (Megits & Liu, 2014). A good study should then be conducted prior to entry into the market. Some cultures do not integrate well with technology and will affect the decision to purchase a smartphone (Pandey & Dixit, 2011). Sub-Culture The culture of any given country can then further be divided into different subcultures. The groups here include nationalities, religions, geographical locations and even groups. There are different values, norms, lifestyle, behavior and traditions within the subculture. Sub-cultures are identifiable within any ideal society (Hoyer et al, 2013). The generation Y individuals are highly likely to appreciate the role and need of smartphones compared to other generations (Gajjar, 2013). Smartphone manufacturers and marketers then view this generation as the target for their product. A good example is when considering students in university, being that their lifestyles are the same they can be considered a sub-culture (Kacen & Lee, 2002). The students are highly likely to influence others to purchase smartphones so that they are all equal. In this case the people within a subculture will imitate the decision making models of others in the same sub culture or even across the subculture (Pandey & Dixit, 2011). Smartphones are appreciated differently and thus the role of sub-culture should not be overlooked when marketing smartphones (Hoyer et al, 2013). When growing children from different subcultures interact with products differently and this affects their decision making when they are left to purchase (Pandey & Dixit, 2011). Social Class The society is not equal reflected by the difference among people. Most sociological literature reflects stratification of the society based on castes, status, gender, age, and class (Mooij & Hofstede, 2011). Social class may be defined as the grouping of individuals with similar behavior based on their economic position in the market (Mooij & Hofstede, 2011). Individuals within the same social class have the same behavior and preferences (Hoyer et al, 2013). There are variables used to define a person’s social class including occupation, wealth, education, income, and role among others (Rani, 2014). There is mobility within different social classes where one can transit from one social class to the other (Mooij & Hofstede, 2011). There are countries where the social stratification is not very much visible. With reference to social classes there are upper, middle and lower classes in the society (Gajjar, 2013). Individuals in the lower class are not confident in their decision making and always ignore quality but instead look at the price (Rani, 2014). The middle class have the tendency of shopping for goods that satisfy their individual needs (Lamb et al, 2011). On the other hand the affluent and elite in the society; who fall in the upper class, have a different life style (Tasdemir & Durmaz, 2014). The latter will be eager to explore new products and switch between products so as to completely satisfy their needs (Yakup & Jablonsk, 2012). Smartphones are priced and this means that the upper class will make decisions to purchase costly smartphones that reflect their position in the society (Tasdemir & Durmaz, 2014). Family The smallest social unit in the society is the family. It comprises of two or more people who live and socially interact with each other. The members might be related by blood or marriage. The relationships between the family members affect the decision making of a given consumer (Yakup & Jablonsk, 2012). In the family, the members are bound to satisfy their personal as well as shared needs through identification of a common supplier (Gajjar, 2013). The children, husband and wife all act as influencers and can be influenced by others in decision making. A husband may buy a smartphone as a gift to their spouse if they understand their needs (Lamb et al, 2011). Children may also influence their parents to buy them smartphones so that they are like others in the society (Lamb et al, 2011). There are two families; family of orientation and family of procreation. The former includes the parents and children. The children are oriented on how to make decisions when purchasing products (Lamb et al, 2011). The latter involves spouses and children. The modern family that is well informed will ensure that every member uses smartphones (Lamb et al, 2011). Reference groups The people surrounding the consumer usually have a pivotal role in their decision to purchase goods and services. Reference groups are one such of a group that has a great role to play in the decision making process (Rani, 2014). There are categories of reference groups such as primary and secondary reference groups, formal and informal, and membership and symbolic reference groups (Rani, 2014). Primary reference groups interacts with the individual on regular basis and their opinion has a direct influence on the buyer’s decision they include close friends, family members, colleagues and work mates among others (Gajjar, 2013). Secondary reference groups on the other hand refer to those that the individual interacts with occasionally and their opinion least counts (Rani, 2014). Formal reference groups could include unions, social clubs, and societies where an individual is affiliated (Lamb et al, 2011). These groups are well structured, have defined goals, similar preferences and authority positions. The informal reference group is a direct opposite of the former. This could include occasional meeting with friends and relatives. Lastly, membership reference is where the consumer by their own attributes qualifies to be a member (Yakup & Jablonsk, 2012) . On the other hand, a symbolic reference group is where one aspires to be. Within the reference groups there is the initiator who triggers the need to buy the product and then the influencer who makes it be bought. Smartphones are associated with reference groups based on the features they have. Anybody who has not purchased will purchase so as to be in the same reference group as those associated with the features (Lamb et al, 2011). Conclusion Marketers need to understand the consumer decision making models and process altogether. The five step decision making process is not tied to any product or service but is ubiquitous. Consumer’s decision making process is affected by either direct or indirect external influences. Most of these factors are beyond the control of the consumer and are never planned for. Policy makers and marketers should be conversant with the models and factors affecting consumer behavior before implementing strategies targeting various segments of the market. References Belch G. and Belch, A. (2009). Advertising and Promotion: An Integrated Marketing Communications Perspective. New York. McGraw-Hill. Gajjar, B. N. (2013). Factors Affecting Consumer Behavior. International Journal of Research in Humanities and Social sciences, 1(2), 10-15. Hawkins, D., Best, R. and Coney, K. (2010). Consumer behavior. 1st ed. Boston: McGraw-Hill Irwin. Hoyer, W. D., Pieters, R., & MacInnis, D. J. (2013). 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