Five Steps in Consumer Decision-Making Process - Coursework Example

Running Head: Consumer Behavior Consumer Behavior Name Institution Professor Course Date Executive summary Smartphones have become essential components for people living in the 21st century. They are being used for social networking and as well as to make purchases online. Hence, a great number of people are making use of smartphones. The purchase decision-making process is essential since it help consumers in making the right decision. It is also critical for companies to market their products in the most efficient way for them, to achieve the desired sales figures and profits. A purchase decision is mainly affected by internal factors which include but are not limited to motivation, personality & self-concept, perception & consumer imagery, learning and attitudes. Marketers and Smartphone companies need to be aware of these factors for them to be able to meet the need of the customers in an efficient manner. Table of Contents Executive summary 1 Table of Contents 3 Introduction 4 Internal factors affecting consumers decision-making process for the purchase of smartphones 8 Motivation 8 Personality traits 9 Perception 11 Consumer imagery 12 Learning 13 Attitudes 14 Self-concept 15 Relevance of diffusion of innovation concept 16 References 19 Introduction Individuals view the smartphones as an extension of themselves, and they carry them around even to places that are so unorthodox for example in their shower rooms. A great number of people use smartphones for social media, browsing, navigation and online shopping among others. This is contrary to the use of phones in earlier days where people only major on making phone calls. Smartphones are also replacing other gadgets such as alarm clocks and digital cameras. This essay sets out to discuss the influence of the different internal factors on consumer decision-making process for smartphones. By doing so the article will focus on three main sections, the first section will highlight the steps in consumer decision-making process, the second section will involve the selection of the product which is Smartphones and the marketing strategy. This section will also highlight the level of involvement of the product. This section will further discuss the two important segmentation strategies for smartphones and the targeting process. The third section will discuss the relevance of all the internal factors that include but are not limited to motivation, personality & self-concept, perception & consumer imagery, learning, and attitudes. The last section will be the conclusion to sum up discussion made in the essay. Discussion Five steps in consumer decision-making process The consumer decision-making process is the process used for consumers to make decisions relating to market transactions before, during and after they had already made a purchase of a service or good. The consumer decision-making process entails five major steps that include need recognition, information search, alternative evaluation, purchase decision and post-purchase behavior. The first stage is the need recognition and the most essential part. If consumers have no need, no purchase can be made (Arnould, Price & Zinkhan, 2004). This recognition comes along when there is a holdup between the actual situation of the consumer and the desired one. The second state is the information search, one the needs of the consumers have been identified they seek out to find solutions to their problems. The information he or she will search will depend heavily on the complexity of the choices that need to be made and the level of involvement. The consumers will consider both the internal and external sources of information. The internal sources relate to previous experiences with the brand and product and their opinion on the product. External information will be from friends and family and reviews from the press and consumers and sellers speech and advertisement. The other step is an alternative evaluation after collecting all the necessary information, a consumer evaluates the different alternatives and evaluates the applicable one that will meet his needs. The nest section is the purchase decision, since the consumers have evaluated the various solution and products that may meet his needs; he can make an informed decision on the product to purchase (Clow, 2010). The last step is the post-purchase behavior, after the product have been purchased and used, the consumer can effectively evaluate of his original need was effectively met by the product and if he made the right decisions in purchasing the product (Arnould, Price & Zinkhan, 2004). He may either feel satisfied by the product or disappointed his expectations of the product were not adequately met. This will have a major effect on his future purchasing decisions. Smartphones and marketing strategy When consumers in a market decide to make the purchase of a product based on importance and interest, it is termed as involvement level. In simpler terms, it aims to measure how socially, personally and economically involved are the customer with the service or product for them to buy them. Involvement level is mainly divided into two main categories that are low-level involvement and high-level involvement. The low involvement products have little risk and include products such as snacks and toothpaste. Smartphones are categorized in the high involvement category and consumers are more likely to carry out research to eliminate any risks. Purchase of high involvement products is risky since consumers will pay a huge amount of money (Arens & Schaefer, 2007). Companies need to segment their brand target market that has a common interest, needs, and priorities. There are four main segmentation types, and they include demographic, geographic, behavioral and psychographic. The segmentation strategies that can be applied to smartphones sales are behavioral and psychographic segmentation. The behavioral segmentation groups the consumers based on their attitude towards, knowledge of, response, usage rate, readiness stage and loyalty status (). A great number of marketers and mostly those in the Smartphone industry strongly believe that behavior variables are the greatest starting point in forming market segments (Kotler & Armstrong 2012). The smartphones users would also be psychographic segmented. This kind of segmentation is measured by interests, activities and opinions of the consumers. It considers the manner in which individuals spend their leisure and the external influences that influence then and how they respond to them. A great number of people are spending their leisure time browsing, using social media making online purchases and emailing. The targeting process involves differentiated, mass marketing and differentiated targeting processes. Smartphones brands are more likely to make use of differentiated targeting. Some smartphones brands that are available in the market make use of different positioning platforms (Smith et al., 2008). For instance, Apple tends to depict better sales as well as brand recognition due to their product characteristics such as their ability to pull up and view the wired web that is available in the smartphones. Samsung Galaxy, on the other hand, makes good use of Google’s Android OS and through this they are gaining a considerable market share due to relatively low prices as compared to the iPhones. Smartphones features tend to differ in one way or another. Positioning is more about the process and marketing activity of identifying a market opportunity or problem and coming up with a solution to the problem. Companies need to position themselves for them to survive in the competitive marketplace. Below is a perceptual map of competitors in the Smartphone industry. Figure 1: perceptual map of competitors Internal factors affecting consumers decision-making process for the purchase of smartphones Motivation Motivation is widely viewed as one of the major internal influences on the purchase behavior of individuals (Kotler & Armstrong, 2012). Motivation is defined as the inner drive that echo’s goal-directed arousal. In relation to consumer behavior, the result is the desire for a service, product or experience. Thus, it is the drive to meet wants and needs, both psychological and physiological and this is done through the purchase of the service or product. Abraham Maslow in his theory tried to offer accurate information on why individuals are usually driven by certain needs at a particular period. He placed the needs in a hierarchy, and it was referred as to the Maslow’s hierarchy of needs. In his hierarchy, he identified five main levels of the needs from the most important to the least important as shown in the diagram 1 below. The first level has the physiological needs and includes the basic level needs such as food, shelter and water. Individuals always try to meet these needs before proceeding to the next level of needs. The second level is referred to as the safety needs. When Individuals have been able to fulfill the basic needs, they strive for stability, security and freedom (Kotler & Armstrong, 2012). The third level relates to the social needs, and individual consumers aim at satisfying their needs for belonging, friendship and affiliation. The fourth level deals with the esteem need relating to Individual and status, superiority, self-development and realization. The last one deal with self-actualization needs. In this case prior to purchasing smartphones individuals need to fulfill the needs that come before it. Diagram 2: Maslow’s Hierarchy of needs The trio of needs theory also tries to explain what motivates a consumer to make purchases of certain products and services. The theory is also termed as the need theory it attempts to offer explanations on how the needs for achievement, power and affiliation have an effect on people actions. The model was developed after the Maslow hierarchies of needs based on McClelland all people regardless of their sex, age, and race have all these three kinds of motivation. The motivation type is mainly driven by life experiences and opinions from one's culture. Personality traits Personality illustrates people’s character; it also helps in showing why people are different and includes an individual’s unique characteristics. The Big Five personality traits encompass five main domains that set out to describe personality. The personality traits are applied in understanding the linkage between personality and the various behaviors. The five traits include openness or who open one is to new experiences , Conscientiousness relates to how diligent one is , extraversion relates to the aspect of how individuals are outgoing or how shy they are, agreeableness relates to how easy one is to get along with and neuroticism or how individuals are prone to negative states. Marketers had a lot of luck in linking individual’s self-concepts to their buying behavior (Hoyer & MacInnis, 2001). Marketers believe that individuals purchased products with the aim of enhancing how they feel about themselves with the aim of getting themselves closer to their idyllic selves. The aspects of openness in the Big Five traits apply practically to purchase of smartphones. When individuals makes purchases of smartphones they seem to be open to new experiences. Based on the fact that the product chosen is a technological product, the marketing applications may be linked to customer innovativeness, variety seeking, and consumer dogmatism. The trait of customer innovativeness is mostly linked to stimulation, a need for uniqueness and novelty seeking. This application can be applied by smartphones companies to identify and target individuals who seem more open to new products offerings and it can be essential for brand extensions. For those companies that have already had smartphones in the market, they need to use the aspect of brand extension so as to introduce new products in the market. Smartphone companies can also make good use consumer dogmatism. It is the degree to which individuals can respond to relevant information and then judge the services and products based on their merit without being influenced by irrelevant factors (Oskamp & Schultz, 2005). Lastly marketers can make use of variety seeking application. In this category, there are three consumers seeking variety. One of them is exploratory purchase that consumer’s switch brands to experience different, new and better alternatives. The other one is vicarious purchases which entails the securing of new information about different or new alternatives and later contemplation whether to make the purchase or not and lastly is the use of innovativeness which entails making good use of already adopted products in a novel way. Of the three types of consumer seeking variety the one that is applicable to smartphones is the use of innovativeness since some products have more features as compared to others. Thus companies always strive to make products with more features so as to have a competitive advantage over their competitors in the market. Perception Perception is defined as the different ways that individual’s sense external sources of information choose certain sources of information and how they interoperate that kind of information (Belch and Belch 2009). This implies that though people may have the same kind of motivation and are in a similar situation may act differently since they perceive each situation differently. Perception is termed as the process through which people select, organize and interpret information so as to form concise images of certain aspects. Individuals tend to perceive situations different since they interpret and organize the available information in unique ways. In the Smartphone industry, the perceptions of consumers are essential than the reality since it affects the actual behavior of consumers (Huitt, 2011). There exist their main processes that illustrate why consumer from different perceptions: 1. Selective attention This refers to the process that individuals monitor most stimuli out as the capacity to process the stimuli is limited. For example, consumers may be exposed to a wide range of adverts, this portrays the impression that marketers will always aim at attracting the attention of the consumers. Consumers are more likely to notice stimulus that seems more related to their current needs (Huitt, 2011). 2. Selective distortion This process presents the tendency that consumers are more likely to interpret the information and data that matches with their presumptions. Consumers will, therefore, distort the information with the aim of supporting their already existing expectations and beliefs (Kotler, Won, Saunders & Armstrong, 2005). This process is helpful when dealing with strong brands when consumers interpret ambiguous and neutral brands information and make it more appealing. 3. Selective retention This process implies that consumers have a tendency to forget information that they have been exposed to but have a high tendency of retaining information that matches with their beliefs and attitudes. This explains the reason as to why repletion is essential in avoiding the neglect of information. Consumer imagery Consumers have various enduring images, perceptions that are relevant when it comes to the study of consumer behavior. Positioning relates to how a company wants their brand to be considered when being compared to the competitor’s brand. Re-positioning, on the other hand, is when organizations want their brands to be associated or considered with various features. Smartphones companies need to re-position so as to enhance competition, upgrade technology and quality of their products, expansion and diversification, and change in trends so as to adapt to new and emerging trends. Brand positioning and repositioning deal with issues related to the mind of the consumers (Cravens & Piercy, 2006). Companies need to engage in constant brand re-positioning for their long-term survival in the market. Through constant positioning and re-positioning companies will be able to create new and fresh images in the consumers’ minds. Marketers need to embrace umbrella positioning, value based positioning and competition based positioning. Learning In consumer marketing, learning is referred to as the psychological variable that can have an effect on the purchase decision for consumers. Continuous learning makes changes in the behavior of consumers due to experience. In reality, human behavior is mostly learned. Learning is a result of interplay of stimuli, drives, responses, cues and reinforcement. A drive is the strong internal stimuli that enable the actual action to take place. Cues for instinct advertising as not major stimuli but they tend to determine where, when and how individuals responds. The response is the effort that individuals make so as to satisfy their drive of obtaining certain products. Reinforcement takes place when consumers have already purchased the products and are satisfied with making use of it (Blythe, 2006). There are three major types of learning theory, and they include behaviorism, constructivism, and cognitivism. Behaviorism mainly deals with the objectively visible aspects of learning. Constructivism on the other hand views learning as the process in which the learners actively builds and constructs new concepts and ideas. The cognitive learning theory can be applied in the use of smartphones. The theory explains reasons as to why the brain is an essential part of information processing and interpretation. Attitudes Consumer attitudes act as both an obstacle as well as an advantage to the marketers. Choosing to ignore or discount the attitudes of the consumers in regard to a particular service or product warranties the limited success of a marketing campaign. On the contrary, perceptive marketers usually leverage their understanding of attitudes with the aim of predicting the behavior of consumers. A major general definition of attitude views it as the enduring organization of emotional, motivational, and cognitive and perceptual processes in consideration of various aspects of our environments (Hawkins, Best and Coney 2004). In more precise terms attitude is the knowledge and negative or positive feeling about a certain activity, object and product and it can also be the overall evaluation that shows how many people dislike or like an issue, product, object or action (Solomon 2004). According to Grewal, Mehta and Kardes 2000, attitudes serve four major functions for people. The first is the knowledge function as the means of organizing people believe in activities and objects such as shopping and brands, often determining the subsequent behaviors. Attitudes also serve as a value-expressive function, when attitudes have been formed they serve to express the central value and self-concept of individuals. The utilitarian function is based on the classical condition theory. Based on the theory people tend to form positive attitudes towards those products, negative attitudes towards others. The last is an ego-defensive function where people form attitudes with their aim of defending their self-images and egos against shortcomings and threats. Attitudes are therefore formed by all the four types of influences but of all the four the one that plays an essential role that is the knowledge function (Hawkins, Best and Coney 2004). In regard to smartphones, the knowledge function is the most applicable one, it will be formed by the manner in which individuals will organize their beliefs towards brands and then from their succeeding purchasing behavior. The applicable model, in this case, is the ABC Model of Attitudes, and it consists of three major components cognition, behavior and affects (Solomon 2008). Affect relates to the feeling that individuals have of an object. In this context, affect represents the opinion and emotion of services and products. Behavior, on the other hand, is the consumer responses as a result of cognition and affect. And lastly cognition is the belief of an individual’s knowledge and belief about the attitude object. Through this model, a consumer may view smartphones with high regard and may tend to be satisfied with making the purchase since it meet their needs in an effective manner. Self-concept Self-concept represents the totality of the thoughts and feelings of individuals. Some authors define self-concept as self-image which means an individual perception. Self-concept has three major components the ideal self-concept, the public self-concept and the real self-concept. Individual’s perception of the past and their future selves is related to their perception of their current selves. Based on the self-appraisal theory, individuals tend to maintain positive self-evaluation when they distance themselves from the negative self and pay more attention to their positive self. Additionally, people tend to perceive the pass in a less favorable manner and perceive the future more positively. The real self-concept is what we are, and it is linked to how we feel, look thinks and act and it can be seen by others (Beverland & Luxton, 2005). The public self-concept is more of how the public views us while the ideal self is how we want to be in future. Thus, the ideal self is an idealized image that people develop over time based on past experiences and what we have been able to learn. This could include aspects that have taught to us by our parents, attributes that we admire in others, what is promoted by the society and what we think serves the best interest of all. In relation to consumer behavior self-concept refers to the differences that exist between certain individuals. This explains the reason as to why people will always respond differently towards certain concepts and products. The difference in assumptions and interpretations are based on how many those products, objects, images, and concepts are significant to individuals. Moreover, if a product such as a smartphones is important or essential to one person it may be less essential to other people. Accordingly, both people facing same products, concepts, images, and concepts depict different reactions to them. Relevance of diffusion of innovation concept Diffusion of innovations is a concept that sets out to explain why, how and the rate at which new technology and ideas are spread across cultures. In his book, Rogers argues that diffusion is the procedure through which innovation is communicated through the various channels over some period among the participants in a social system (Beverland & Luxton, 2005). There are four major elements that influence the spread of new ideas the innovation, communication channels, social system and time. The whole process relies on human capital, and innovation needs to be adopted widely so as to self-sustain. The concept is relevant in that it is essential to understanding potential adopters and their decision-making process. Through the concept helps in knowing who makes the decision and if the decision was freely. The concept handles the spread of almost all the essential advancements that have occurred over time for instance use of explosives, paper and printing, and it can also play an essential role in launching successful products. The theory is also relevant in that it help to explain how various tend occur and reasons as to why certain societies adopt technologies. Diffusion can also help companies who are introducing new products in the market since through it they can pay close attention to diffusion of innovation since it may warn companies of any likelihood of failure or success of the product. Ideas are currently spreading through the society with an increasing rate (Argyle, 2008). The theory explains why, how and when innovations spread in a society. For example, items such as the smartphones are overtaking the earlier modern phones. Also, the study of diffusion of innovation raises five major factors that tend to determine the success of the idea. It explains that an innovation needs to have some added advantages when compared to the already existing products in terms technical superiority, social recognition, and convenience. For instance, the smartphones offer some convince to the users in that people can access their work information on smartphones, and they have some technical superiority when compared to earlier forms of earlier mobile phones. At the same time, the idea needs to align with the already existing needs and values of the users, for example, the need for more advanced phones. The other factor relates to the complexity, the simpler new innovations are to sue the fewer the skills that will be needed to make use of the faster new users will be able to adopt to adopt to it (Barnes, 2001). Additionally, consumers need to try out products prior to purchasing them and mostly prefers to make use of the results from the early adopters of the innovation. Conclusion In conclusion, it is clearly evident that the consumer purchasing decision has five major steps that include need recognition, information search, alternative evaluation, purchase decision and post-purchase behavior. Consumers go through all the five stages in making a decision to purchase a product and in case their needs are not met they may try out a new product. Marketers of smartphones also need to formulate the right marketing strategy to aid in the achievement of required sales and profits for companies. Concerning these, they need to target and positioning themselves well in the market for them to have a competitive advantage over their competitors in the market. The discussion also shows that there are various internal factors affecting consumer's decision-making process for the purchase of smartphones. This includes factors such as motivation, personality & self-concept, perception & consumer imagery, learning, and attitudes. These internal aspects have a major effect in that they may at times acts as advantages or disadvantages to the marketers. In response to these marketers and their respective companies needs to know how they can deal with all these factors to their full advantage. For instance, they need to strive and always create a positive attitude in the consumers mind. This will go a long way in making consumers purchase from them. At the same time, companies need to engage in marketing promotions and campaigns. This will help in reviving the customer image of the product, and this may act as an advantage for the company since they may choose to make their purchases based on their imagery. They can be ahead of their competitors who may not engage in aggressive marketing campaigns and though the consumers may be aware of the product they may choose not to buy it. References Arens, W., & Schaefer, D. (2007). Essentials of Contemporary Advertising. Boston: McGraw-Hill/Irwin. Argyle, M. (2008). 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