Internal Factors Affecting Consumer Decision-Making - Coursework Example

Internal Factors Affecting Consumer Decision-Making Name: Institution: Date: Introduction This paper mainly delves into internal factors that often affect the purchase of books and other commodities like clothing. It is noted that there are many internal factors that influence an individual to make a purchase either online or in a shopping Centre. All of us are consumers of products and services; we purchase products on a daily basis based on our needs, preferences and other factors like an individual’s purchasing power. Mostly we buy commodities because we need them for our daily requirements that are majorly physiological, what we buy, where we buy it and how much of it we buy majorly depends on internal intangible factors like our individual needs, perception, individual’s self-concept, attitudes, beliefs, and preferences. We put a lot of consideration on the products we buy, who is the manufacturer, value of prestige beheld by the product and where we buy it from are one among many considerations we put in before purchasing a product. This tells you how the human brain is very complex, and a study of these external factors that influence the purchasing patterns of individuals have to be put to study. This paper mainly focuses on the description of several internal factors that influence the purchasing behaviors of individuals, an analysis of these factors forms the basis of this paper. A close study of a human needs and motives will help in shading light to this situation, such are the internal factors that influence the purchasing patterns of consumers of this day and age. Learning about the distinctions between needs and wants and an understanding of the dynamics of motivations and the various motivational theories in a bid to explain what goes through the mind of a shopper on a shopping spree. Different people have different personalities and beliefs of self-concept; personality has a great impact on the differences that are generated out of shopping behavior of different people, personality has an influence over the a consumer’s attitude and behavior while shopping, this leads to an interesting study in marketing, the creation of brand personalities that will suit individuals with different personalities. Consumer imagery and perceptions are majorly factors that influence purchasing behavior of a consumer, an understanding of the elements of perception is a key part of the analysis of internal factors that influence the shopping behavior of consumers. A study of all these internal factors helps a marketer to formulate their plan for marketing of products. Consumer Decision-Making Process Purchase of a commodity is the visible part of the complex process of purchasing that involves a series of decision-making process that goes through the mind of the consumer. When you think about it, what really happens when he/she is done shopping, or what could be the factors that influence the shopper to choose over a certain product and not another? In 1968 Engel, Blackwell and Kollat developed a consumer decision-making process (Raghavin 2013). The steps start with the Need recognition, then information search, evaluation of alternatives that can meet the need, purchase decision and the post purchase behavior of the consumer. Firstly to start the consumer decision-making process we will analyze, the Need recognition /Problem recognition. This is always first and foremost because if there is no need then there is no reason to make a purchase. A need arises where there is a gap between the consumer’s current situation and the idealized situation or desired one. Clearing the blur over here, not all needs end up to be a purchasing behavior, the need has to be important to the shopper, the acquisition of the product and the price tag attached to it is very important in making the consumer consider it acceptable for him/her. If a client liked to buy a book online or from a resource center, he or she would consider the ease of acquisition of the book, he/she checks for the prices of the book on both sources, online it costs $22 and from the resource center it is $20, he/she is faced with the dilemma of taking the online option that is a bit expensive and it can be easily acquired or drive all the way to the resource center to get the book at $2 less. Needs for differ from functional needs, social needs and the need for change. These are the factors that influence the purchasing trends of a consumer. The next step is Information Search, upon recognition of need; a consumer looks for information to find a solution to the problem. The consumer seeks information that will go hand in hand with his opinion to help him make a decision. The consumer consults his mental faculties to look for internal information, these are details about the product or need that the shopper already has in his memory. This information is sufficed in the purchase of daily commodities like cereals for breakfast. In some cases, the consumer has a need and has no information about the need presently at hand, he/she will have to get external information which is obtained from family, a friend, reviews of the product by other consumers and majorly advertisements and product specification. After information search we move on to Alternative Evaluation, after obtaining information the consumer is able to do evaluations of the possible alternative he or she gets from different products, from this he/she analyzes the needs that are closes to satisfying his needs and chooses what he thinks is best for him. This evokes a set of products that have the highest probabilities of being purchased. The Purchase decision is what comes next on the consumer decision-making process. At this point the consumer has identified a need, and the different solutions and products available to respond to the needs/problems identified. Actual purchase is what is awaiting, decision to make a purchase is influenced by the information and the product selected in the previous steps, other facts come in like the shopping experience of the shop of website, return policies and availability of coupon or promotions on the product. These factors influence the purchasing decision. Finally, the Post-purchase behavior is scrutinized, the consumer checks for the adequacy of his needs and the thinks through on whether he/she has made the right decision on the choice of product made. If he gets satisfied with his purchase that will definitely influence hi future purchase behavior because, as they say, a satisfied customer is a loyal customer. Product Categories and Marketing Strategy The sales of books in a retail store or on an online platform is a task that one has to put a lot of consideration to because the sales generated, or revenue generation from the product actually depends on the categorization of the product and the marketing strategy put in place to advertise the product. Marketing strategies changed from the product point of view, and it has diverted to the consumers point of view. Major changes have taken place in the marketing area of products, in order to be effective and efficient in your business, you should focus on capturing the consumer market. There are three main points of concern when choosing your target market for you products. First of them is Market segmentation, this involves grouping of your customer into segments that have similar needs or will have a common response to a given marketing action. Each segment will have different reactions to a different mix of marketing strategies thus all contribute to the growth of the company and the growth of profits. Market segmentation is majorly done basing on demographics, psychographics, behavioral and geographical. Targeting is the next modern-day customer marketing strategy, not all marketing mix will suit all the segments developed, it is best to have a target market/segment for a given marketing mix. There are three general strategies for selecting a given target market; Undifferentiated targeting, Concentrated targeting and Multi-segment targeting. Positioning comes next in the STP marketing strategy, positioning is developing a product and a product brand image in the minds of product consumers, it can involve changing the customer’s thinking or perception about the experience they will receive upon choice of a given product. A business can change the perception of its customers on a given product through the use of promotional activities and giving customers a carefully designed marketing mix. A good understanding or the competing products and the benefits that the target market is after, one needs to outline clearly the differential advantage of your product over the competitor’s product. Businesses ought to give a definition of themselves in the eyes of the consumer regarding their completion in the market. Books vary in the application and the content of the books, they can be educational, fictional, non-fictional, novelty, biographies, they can also vary depending on the age of readers, and there is children’s content, teenage content and adult content. Books have a high level of involvement depending on the setting, from an educational perspective it has a high level of involvement and on a daily living perspective books are not a high demand commodity, they have middle level of involvement in the lives of many people. Market segmentation of consumers is important in the marketing strategy of books, putting into consideration Demographics for segmentation of the books consumers, this segment puts into consideration the age, gender, income bracket and the cultural background of consumers. These factors will help define the market for certain books, from this we can have boos for children, teenager, and adults based on the age difference, then we can have books that will fascinate the female and the male gender and finally we can have books for less learned, averagely learned and intellectuals based on the level of education of the readers. Segmentation in the marketing of books can take a lead in behavior, this capture online shoppers and shopping centers customer. Designing marketing strategies for these two groups of shoppers that will capture them separately and bring in traffic is important in revenue generation for the company. Marketing strategy adoption by the company can be undifferentiated or differentiated marketing. Undifferentiated marketing of books is not done in alignment with any market segmentations. This marketing strategy is cross-platform; the marketer believes that the marketing strategy adopted will capture all the consumers in all the segmentations developed. Differentiated marketing focuses or acknowledges the importance of building a market offering around the needs of a defined target market. This strategy involves the marketing of products within the selected target market, this method works bu the problem is that it ca be too costly actually to develop a segment centric marketing strategy for each and every market segmentation, this will cut in on the profits accrued. The use of perceptual mapping helps firms develop a marketing positioning strategy for their products and service. Perceptual mapping show where the existing products are positioned in the market, this helps the firm decide where they want to place their product. Firms can do positioning by way of filling a gap in the market or through creating a competition with other producers of the product. Marketing strategies can be adopted and implemented in many ways to develop a working marketing strategy for the sale of books on shopping centers and online shopping portals. Third Section The purchasing behavior of a shopper is influenced by quite a number of factors that are either internal or external to the shopper. These factors can be external if the equipment bought will have an impact on the self-esteem and the external image of the shopper and it can be internal if there are factors that are inherently and innate in an individual that will have an influence on whether he/she will purchase a given commodity. A quick review of the decision-making process indicates that clients view products from different perspectives before a purchase is made. It is important to consider internal factors that influence the purchasing trend of an individual, these factors include; motivation, personality and self-concept, perception and consumer imagery, learning, and attitudes. Motivation Motivation is the force within an individual that compels one to undertake a certain action. This state of mind is produced because of a state of tension that is developed out of having a number of unfulfilled needs. Motivation to achieve certain goals can be positive or negative depending on challenge posed, if an approaching object is offered then its positive approach and when it is an offer of an avoidance object to a user, then it is a negative motivation. Maslow’s Hierarchy of needs gives a five hierarchy model showing the needs of human beings from a physiological needs all the way to self-actualization (Raghavin 2013). Maslow’s hierarchy of needs move from Physiological needs, Safety needs i.e. physical security and job security, Social needs i.e. social acceptance and feeling of belonging to certain social group, the next is Self Esteem, this is perception of the self in relationship to the social grouping and finally Self Actualization, this is living your purpose in life i.e. doing what you want and achieving your life set goals. Motivation can be elicited through segmentation and appealing advertisements, positioning of products and finally designing promotional programs for the marketing of products. McClelland’s Trio of Needs stipulates three needs; Power Needs- this is the need to control other people. Affiliation Need- this trait is influenced by the desire for friendship, acceptance and belonging. Lastly is Achievement Need- it is a replica of ego and self-actualization needs. Motivation play a major role in influencing a consumer to make a decision to purchase a given book, taking an example of the Trio Needs of Affiliation and Maslow’s Social need, in this case an individual has the need for belonging to a social circle or a group of intellects, for one to join a book club one has to have a book, people can purchase books just because they want to belong or be affiliated with certain social groups that they consider them to be awesome to be a member of. Purchasing patterns of consumers is varied depending on the level of motivation of an individual that I generated out of a need. Needs and motivation go hand in hand in defining the purchasing behavior of a consumer, the need for intellectual knowledge and belonging to a certain group like fictional geek groups, this give an individual motivation of purchasing astronomical books like Star Wars. Motivation is an internally generated resolution that influences the purchasing behavior of an individual. Consumer Personality and Self Concept A close study of consumer personality and self-concept will help give an undertaking of the consumer’s inner differences, it helps to familiarize with various theories explaining the influence of personality on consumer’s attitudes and behavior. Personality study helps give a clear understanding of the dynamics of consumer’s responses to products and marketing messages and how marketers should strive to create brand personalities-like traits on products advertised. Personality can be defined as the unique, dynamic organization of the traits of a given person, physical and psychological, which have a great influence on the behavior and responses of the individual to the social and physical environment. (Sharma 2013). Personality gives a reflection of individual difference; they can be enduring and very consistent and they can change too. The personality of different individuals has a great influence on the purchasing pattern of a given individual, the study of theories explaining different personality forms is important in branding personality trait-like branding. The BIG FIVE MODEL give five groupings of personalities, i.e. Neuroticism- this is the tendency to experience negative effects. Extroversion- this is the tendency to interact with the world. Openness- this is the tendency to seek a variety of experiences. Agreeableness- the tendency to move towards people and act kindly. Conscientious- the tendency to control impulses and control goals. All the above traits show different consumer types based on personalities. A study of consumer behavior and marketing strategies to suit these traits is important in concurring the market and generation of revenues from different customers. Consumer innovativeness, consumer dogmatism, consumer social character, consumer susceptibility and variety seeking types of consumer behaviors that influence the purchasing behaviors of clients. Consumer Innovativeness is the consumers’ willingness to try to innovate. Innovative consumers are those that are willing to try new products, services or practices. When making a marketing strategy for sales of books or kindles. Selling of kindles used for reading of eBooks can be very tough when it comes to convincing consumers to purchase these new devices. Exploring consumer innovativeness in market segmented based on demographics; one can sell these devices to consumers that display tendencies of innovativeness. They can be categorized according to gender, education, age, and cultural background. Consumer innovativeness has a great influence on consumer purchasing behavior. Consumer dogmatism is the degree of rigidity people display towards the unfamiliar or information that contrives their earlier established beliefs (Raghavin 2013). Open minded individuals have low dogmatism and closed minded individuals have a high dogmatism behavior. The dogmatism of a consumer towards the use of Kindles as opposed to the purchase of books can pose as a challenge or a leeway for access to the consumer market. Many consumers out here can be very dogmatic to new technologies, conservatism is a principle trait of some people out here, changing this can be difficult. An awareness of consumer dogmatism is important in the execution of marketing strategies for different commodities. Variety seeking is an exploratory purchase behavior where clients choose to switch brands in order to have a new and possibly better experience. It entails vicarious explorations where consumers secure information about a new alternative and even contemplates about the option. These group of consumers is mainly focused on satisfying their needs using different products that are available in the market. They are not rigid to change, and they are not also loyal to a given brand. This group of customers who seek a variety of a particular product, the marketing team can work with these group of customers through the use of different brands of the same product in shopping centers. Developing these various brands will help to capture this group of dynamic customers. Sales of books or kindles can be varied in a way that customers have the liberty to get different brands of the same Kindle i.e. changes can be made to the screen size, computing power, thickness of the device. Availability of variety is good for this group of customers. Self-concept constitutes the actual self, ideal self, ideal social self and real social self. The actual self is the way we see ourselves. Ideal self- the way we like to see ourselves. Ideal social self is how we would like others to see us. Finally real social self is how we think others see us. How we view, our selves has an impact on how, what and where we do our shopping. Each consumer out there makes purchases while in mind they question themselves on how the product will reflect them to be and the way they will seem to be in the eyes of other people. Self-concept should be considered when deigning and branding commodities, products should be made in a way that consumers would like to identify themselves with it. Perception Perception study in relationship to factors affecting the consumer behavior while shopping will yield an understanding of the sensory dynamics of perception and consumer imagery. This will help in understanding the strategic applications of consumer perception and consumer imagery. Consumer perception can be defined as the process by which an individual receives, selects and interprets stimuli to form a meaningful and coherent picture of the world (Raghavin 2013). Sensory dynamics of perception move from perception, absolute threshold, and differential threshold. According to Weber’s Law states that the strongest initial stimulus, the greater the additional intensity needed for the second stimulus in order for it to be perceived as different. Selective perception has the following concepts that relate to consumer behavior during purchase. Selective Exposure- this is where consumers actively seek out messages they find pleasant to them. Selective attention- consumers exert a great deal of sensitivity in terms of the attention to commercial stimuli. Perceptual defense- individuals may unconsciously distort information that is not consistent with their needs, values, and beliefs. Perceptual blocking- consumers here protect themselves from being bombarded with stimuli by blocking such stimuli from conscious awareness. Consumer imagery is the consumer’s ability to evaluate products and brands on the basis of the congruency with their personal picture of themselves. Consumer perception and consumer imagery go in hand; customers can buy or avoiding to purchase a certain component on the argument that the product usage or deign contravenes their beliefs. Marketing strategists should be able to come up with proper marketing approaches and branding styles that will not give a definitive description that will bias a certain group of consumers. The marketing strategy should be cross-platform and universal. Learning and Consumer Involvement Leaning and consumer involvement is important to understand the process and elements of consumer learning, it helps in familiarization with behavioral learning and its applications. The study of studying consumer learning and involvement give clarity of the information processing and cognitive learning and strategic applications. In simple terms, consumer learning can be defined as the process by which individuals acquire the purchase and consumption knowledge and experience they apply to future related behavior. When selling Kindles to consumers for the first time, it would be difficult to make clients accept the device for their daily reading as opposed to the use of hardcopy books. Application of certain marketing strategies will help in initiating consumer learning about the device. In this scenario initiating of classical learning to take effect among customers through giving repetitive attempts on advertising, promotions and free trials on the use of the Kindle device, constant repetition of this process will eventually make a few client to try out the device. Persistent marketing through repetitive marketing consumers learns about the products offerings and usage. Repetition increases the strength of association between the conditioned stimulus and the unconditioned stimulus. Stimulus generation is asking the response to slightly different stimuli in business perspectives this can be seen in customers responses on a given product line of goods, form and category extensions, a family branding of commodities and likening of different commodities. Classical conditioning will help explain how consumers will behave in the market place. Through consumer learning one knows about recognition and recall measure- this can be realized by doing recognition tests, they are passed aided by the recall. Brand loyalty and brand equity is the ultimate desired outcome of consumer learning and the value inherent in a well-known brand name. Consumer Attitude and Attitude Change Attitude of consumers and attitude change in consumers are relatively traits that are natural in consumers. The focus on consumer attitudes helps familiarize with the compositions and scope of selected models of attitudes. The experience received by consumers out of the use of a certain product leads to the formation of an initial formation consumption-related attitudes (Sharma 2013). An attitude is a learned predisposition to behave in a consistently favorable or unfavorable way with respect to a given object. The theory-of-reasoned-action Model (TRA), this theory consists of the following behavioral traits like the belief about the behavior and evaluation of behavior which lead to attitude about the behavior and on the other side it has opinions of referent other and motivation to comply which pile up to give subjective norm, all this form an intentions and finally we have a behavior. The above model is an attitude synthesis in the mind of a consumer upon a certain commodity of the client. The behavior of the consumer of a certain component cannot be improved if there is a negative attitude to the product, attitude change is not possible unless fresh marketing strategies are implemented to change this. Decision-making process is greatly influenced by the attitude of the consumer on the product. References: Alek Flekel. 5 Step Decision Making Process. Business 2 Community http://www.business2community.com/marketing/5-steps-of-decision-making-process-0480178 Retrieved on 1000hrs 14th May 2015 Market analysis: Market Segmentation, Targeting and Positioning http://toolkit.smallbiz.nsw.gov.au/part/3/10/49 Retrieved on 1000hrs 14th May 2015 Differentiated Marketing and Undifferentiated Marketing http://www.segmentationstudyguide.com/understanding-target-markets/differentiated-or-concentrated-marketing/ Retrieved on 1000hrs 14th May 2015 Market Positioning Perceptual Mapping/ Positioning Map http://www.learnmarketing.net/perceptualmaps.htm Retrieved on 1000hrs 14th May 2015 Key Segmentation Process. http://www.marketsegmentation.co.uk/segmentation_process_tmsc.htm Retrieved on 1000hrs 14th May 2015 Raghavin A, Sharma G (2013).Internal & External Elements Affecting Willingness of Consumers to Purchase Products. Singhania University,Rajasthan, India. Read More