Consumer Decision Making - Report Example

Consumer Decision Making- Internal Factors Name: Lin Su Student Number: 220127030 Date: 21/05/2015 Introduction Todays’ age and era, have witnessed an increase in the human needs, varying from the basic to non-basic or luxurious needs. Consumers continue to buy different commodities and hence the need for different business organizations to study the consumer behavior, so as to ascertain the correct type of commodities that are relevant in the market. According to Lars, 2008, Consumer behavior can therefore be termed as a process that consumers go through when they are identifying their needs, making the decision of buying them and finally settling on the correct type of items to be bought. Marketers in most organizations, are tasked with studying the consumer behavior, determine the latest market trends then give suggestions of the products that are missing in the market. During the purchase of clothes, especially designer clothes, some of the internal factors that may affect a customer can be categorized as follows; Rational Factors These are related economic factors that entail aspects like the price of purchasing the designer clothes. The prices of these clothes can be considered a key rational factor where it has an impact on the choice of the various brands. Prices go hand in hand with the quality of the clothes. Companies normally sell clothes of higher quality with a bit higher price while those of low quality are always cheaper. For most of the customers, they consider paying higher prices to get a high quality clothe. However, despite being expensive, these clothes are normally durable when compared to the other low-quality clothes. It is important for the marketers in various companies to analyze factors like the pricing of the commodities when considering the target customers. It is evident that parents or guardians play a bigger role in instilling price-consciousness to their children. This will have an impact on the brand choices of various individual but for those who are conscious about the fashion industry and the latest trends in the market, would not apply rational factors when making purchases. Product factors The physical appearance of the clothes can also be categorized as an internal factor affecting the customers’ decision-making process. A clothe that is latest in the fashion world always have some characteristics that best describes their physical appearances. This factors may include the color of the cloth and the size. Fit-in clothes are always chosen by both the male and female customers who would like to have a cloth that fits well their body. The choices made by a customer might also depend on some factors like developing a distinct style and also sibling influences. Some individuals are well known or identified by the physical appearances, and this is mainly attributed to the choices of clothes that they wear. Cognitive factors These factors entail the mental processes that a customer has to go through before making a decision on purchasing a product. A customer tends to possess a quality of purchasing the same product that was purchased before if that particular product produces positive outcomes. A customer would even retain a seller from which he or she will always buy the clothes from that outlet. A familiar brand in the market would clearly dominate over the other brands since customers will only buy the clothes that they are familiar with the brand and also the seller of the clothes. The Consumer Buying Decision Process Fanny, 2014, suggest that a customer goes through the following steps when making a decision when purchasing a product; 1. Need or Problem Recognition. This is the first and perhaps a critical stage in the buying process. The consumer first realizes that they require something that without that particular commodity, then their normal way of life will be affected in a way (Fanny, 2014). This can be a daily need or something that is a long term requirement. A need can also be a new element where an individual is trying to introduce something new into his or her life such that they can improve their status of living. An example is buying a car. 2. Information search After identifying a need, a customer then looks for more information about the product being sort and also the possible ways of acquiring the product. Information about a product can be found in different platforms, and this is majorly determined by the choice of the marketers in various organizations. Example, a company would advertise their products online, publishing articles or even using the media such as TV or Radio. It is from these platforms that a customer will get to know more about a particular product. 3. Alternative Evaluation. The information acquired about the product is not the final choice of decision that the customer will take. Alternative evaluation entails searching for some alternative solutions of purchasing the product. This will be done by comparing factors such as the prices of the product offered by different sellers. 4. Purchase decision After acquiring enough information about a particular product, the customer will then purchase the real product. This will be based on the information settled on during the information search. This include where to do the purchase, what quantity, color etc. that the consumer has evaluated the different solutions and products available for respond to his need, he will be able to choose the product or brand that seems most appropriate to his needs. Then proceed to the actual purchase itself. 5. Post-purchase behavior Here, the customer has already purchased the product and used it already. If the product is as what was expected, then no more purchases shall be made but if on the other the product does not meet the expectations of the consumer, then he or she shall have to consider making some other purchases (Fanny, 2014). Consumer needs and motivation. Clothes are classified as a human need since clothes offer protection. Although there might be several reasons as to why people wear clothes, it is important to consider the fact that clothes are mainly worn to protect people from cold and diseases in general. Clothes go along with other human needs like food. Motivation can be stated as a process that causes people to act and to do things the way they are doing so. Motivation comes along when human beings arouse a need that he or she would like to have. An individual might, for example, arouses the need to have a certain clothe. This might be in line with the latest trend in the fashion industry or just a cloth that would comfortably suit him or her. A motivated customer, who has identified a particular type of cloth for instance is willing to commit himself or herself into acquiring the cloth. Various age groups of people at different stages of life have different motivations for purchasing a cloth. Adolescents are mainly motivated by the need to be recognized, while others are mainly motivated by sexual attractions and for recreation (Evans, 1964). Want is the opposite of a need and this is something that is more pleasing and satisfying, like entertainment. The human mind works in such a way that when an individual realizes the likelihood of a need, then they will strike a possible action plan that will be used to acquire the product. When and individual realizes the possibility of a need, then the human mind shall strike an urge internally, that will help them to start finding the possible ways of fulfilling this need. This may include actions such as where shall the cloth be found and matters concerning prices. The internal urge is often a range of various options from which the customer chooses from them. Needs can be classified as primary and secondary needs. Primary needs include the basic needs that human beings cannot live without having them. An example is a food, air, and shelter. Secondary needs, on the other hand, can be termed as the wants that individuals can live without them. These needs are only acquired only because of recognition and status (Oxana, 2011). The objectives or goals of the customers are always depicted after laying down all the needs and the wants of the customer. All the purchases that are made by the customers normally have a specific goal that the customers are targeting to achieve it in a way. The goals, as stated in the modules are generic and product specific goals. 1. Generic goals. These goals are purposed to satisfy the broader need desire of a customer. A customer might want to purchase a car in general. 2. Product-specific goals. These goals specifically state the products and services that the customer would like to have, while avoiding generalizing the goals. If a customer wants to purchase a car, then it is specific to which type of vehicle the customer wants. Maslow’s Theory of Hierarchy needs is the most appropriate in the context of consumer needs and motivation. The hierarchy is outlined in a pyramid shape, where all the basic needs of human beings are placed at the bottom of the pyramid while the needs with higher orders are always at the top of the pyramid. The arrangement of this pyramid depicts the advantages of each of the needs placed in the pyramid. According to (McLeod, 2014), the theory consist of a five-stage model that consist of the following; 1. Biological and Physiological needs – this entails needs such as air, food, drink, shelter and sleep. 2. Safety needs – it includes protection from elements or factors that could otherwise cause some harm to human beings. They are; security, order, law, stability and freedom from fear. 3. Love and sense of belonging needs – everyone is entitled to having a friend. The feeling of being in a friendship, affection and love for someone. These could happen with individuals that surround us, example people from work group, family, friends, and romantic relationships. 4. Esteem needs. It entails achievement of something, mastery of behavior, independence from a habit, self-respect, and respect for others. 5. Self-Actualization needs. They are needs associated with realizing personal potential, self-fulfillment, seeking personal growth and peak experiences. The theory as outlined by Abraham Maslow, suggest that when an individual is missing most of the needs that he or she should be having, then a main form of motivation would be to consider the physiological needs of that person. The above five sets of needs can be categorized into the basic needs which mainly comprise of things like water , food and shelter and then higher order needs, which includes factors like social class, self-esteem and self-improvement. Personality and self-concept; According to Azoulay and Kapferer, 2003, Personality has been defined as “a clear construct that is dissimilar to the cognitive construct, skills, and capabilities”. It is, therefore, the internal traits possessed by an individual but greatly determines how that particular individual act and react to his or her environment. The personality, therefore, defines a character of an individual and outlines the different characters of individuals. The clothes that people put on speaks loud about their personality. Someone’s personality determines his or her general look. It is the personality of the individuals that tells about their style and how they interpret fashion, and the clothes that they are going to put on. It is of great essence for someone to consider his or her personality when buying clothes because if in one way or the other they just buy the clothes that they wear without having to consider their personality then they will not have a proper identity of who they are in the real life and the general lifestyle to be associated with (Arpita and Mrrnakshi, 2009). Age, lifestyle, budget, environment and the culture are some of the factors that influence the type of clothes that one has to put on under different situations. A customer would, therefore, try and consider these factors to ascertain the best clothes that they would look best on than rather just put on any cloth. The personality of a person is not fixed, and it changes over time the individual ages. It is also of the essence for customers to consider these before making a purchase of clothes decisions. On the contrary, Self-concept and self-image are the processes where a customer does some self-assessment ‘test’ of himself or herself come up with an opinion. The opinion decided should be in line with the character that he or she possesses and therefore they will have a specific consumption behavior. Marketers should consider studying and analyzing the self-concepts of various customers to determine their specific needs. The Trait Theory The Trait theory states that it is important to point out and classify the behavior that one has since the personality of a customer does bring out the traits that he or she possesses. Every individual possess a specific psychological trait and all the people that possess similar traits are grouped to a particular personality type. A trait can be stated as the predisposition to act or behave in a particular manner. However, to identify traits of individuals personality tests and scales are considered. Trait theory is classified into two categories; 1. Simple trait. A limited number of traits are considered, people falling under this category are identified and then they are classified basing on these traits. 2. General trait. A variety of traits is identified. The Trait theory is more relevant to a marketer than the Freudian and Neo-Freudian Theories. This is because the approach is more realistic, objective and quantitative. Through the theory, the single trait personality scales and inventories have all been designed and tested for their validity and reliability. The outcomes of this are useful in conducting consumer behavior research. The consumer traits or characteristics of consumers shall then be used to classify them into groups, and placing them in their respective personality type (Chambers, 2012). Consumer perception. This entails the activities where people chose, arrange and later on translate the information to come up with images of some things or situations. Customers organize their information in a unique way and can interpret some things, according to their line of thought. There are a lot of perceptions when it comes to the types of clothes that people wear. It is these perceptions that will determine how a particular cloth will behave in the market. A group of customers might have a perception about a particular clothe. It can either be on the positive side or the negative side, depending on the nature of the perception. Marketers at various companies should conduct proper and enough market research to determine if there are any perceptions in the market and hence change the design of the clothes. The perceptions of different customers can be categorized into the following elements; Absolute threshold Also known as noticeable difference, the differential threshold is the lowest difference that can be noticed between two similars. Differential threshold Human beings are stimulated and motivated when they are below their level of conscious awareness. At this point, individuals can perceive stimuli without their knowledge that they are doing so. Some Stimuli are too weak or too brief to be seen or heard and therefore they are not strong enough to be perceived by one or more receptor cells. This process is called subliminal perception. Sensation The sensation is the quick and direct response of the sensory organs to stimuli. A stimulus may be any unit of input to any of these senses. Examples of stimuli include products, packages, brand names, advertisements, and commercials. Sensory receptors are the human organs that receive sensory inputs. Their sensory functions are to see, hear, smell, taste and feel. All of these functions are called into play, either singly or in combinations, in the evaluation and use of most consumer products. Subliminal Perception This is the least or minimal level where an individual can experience an immediate and direct response of the sensory organs to stimuli. When a person is in a position to note the difference between “something” and “nothing” he or she is in a state of the absolute threshold for that particular stimulus (Jaison, 2007). Consumer learning and involvement Consumer learning is the process where customers learn new techniques and implement them in their routine work, hoping to achieve some positive results in the end. Learning entails the behavioral and cognitive approaches where, for behavioral approach, consumers respond to their external environments while, for the cognitive approach, learning is mainly due to a person’s consciousness and intended information. Various designs of clothes are made, and customers keep changing their styles of dressing. Learning is one of the main factors that enable the customers to change to the brands in the market. When an individual sees another individual dressed in a different and outstanding outfit, then they will tend to acquire information about factors like the cost of the original material, where to purchase the outfit and also information behind that cloth. When a customer learns about all these information, then they will tend to change their behavior by going through all these experiences. The behavior of consumers is therefore acquired when they learn something new from other people as their friends and then implement what they have learned. On the contrary, the response implies to the strife that individuals put in with the hope of satisfying internal stimuli through the purchase of the product. Classical Conditioning is a situation whereby living things, both animal and human can acquire a new habit by repeating the learning process as many times as possible till they understand the process. Instrumental conditioning, on the contrary, calls for a link to be made between a stimulus and a response. The involvement theory When we obtain comparisons from the cognitive theory, the involvement theory stems out from the research body known as the split-brain theory or hemispherical lateralization. The split-brain theory states that the brain of human beings can be divided into the right and left hemispheres that each of them specialized in different information. The left of the brain is logical, rational, and more realistic when it comes to reality. The information at concern is cognitive information that are in the form of alphabets, letters, and printed words. Cognitive activities include speaking, reading, and writing. These are situations that needs a lot of involvement and very active learning so as to understand a concept. The left brain is therefore very cognitive, and all learning activities is through print media (Jaison, 2007). The right side of the brain takes the emotional, intuitive, metaphoric and impulsive information where it is mainly concerned with non-cognitive, non-verbal, audio-visual and pictorial information. These are situations that require passive learning, low-involvement and hence lesser information is required. Since less information is provided, the consumers shall, therefore, learn by repetition of the information, like a repetition of an advertisement on TV. Considering consumer behavior, the involvement theory implies that: If a consumer considers processing of information so as that they can be able to purchase a product, then the consumer is considered to be highly involved and if he or she is not, then low involvement. When conducting purchases low-involvement, then the best marketing communication strategy is via TV where consumers learn by repetition of the same message. The repetition will make the consumers get used to the product being advertised and hence consider purchasing it. Print media is the best suited for the cases of high-involvement purchases. The print media allows the consumer to analyze the information about the product in the print media again and again before making a final decision on which product item to consider (Jaison, 2007). Consumer attitude development and change. According to (Vahid and Seyed, 2014), The Relationship that exist between attitude and the purchase decision has been analyzed by many researchers and efforts to determine and show out this relationship can be connected to the Theory of Reasoned Action (TRA). From the theory, the attitude has an impact on consumers’ decision-making process and hence could be used to predict the decision of the consumer behavior. Attitude can be termed as the knowledge and any positive or negative feelings about an activity or object (Pride and Ferrell 1991). Attitudes also serve four major purposes for individuals; 1. Knowledge function, as a method of organizing beliefs about activities or objects like shopping and brands, and also used in determining subsequent behaviors. 2. Value-expressive function, when attitudes are aligned and serve to declare an individual’s central values and self-concept. 3. Utilitarian function, rely on the theory of classical condition, with individuals being concern about creating a positive attitude towards rewarding goods and the negative attitude towards non-rewarding goods. 4. Ego-Defensive function, when individuals come up attitudes to protect their self-images and self-being against shortcomings and threats. With all these functions at hand, attitude can act as a standard where consumers use it for evaluating factors such as the products, services and opinion (Vahid and Seyed, 2014). Tri-component model Multi-attribute Attitude models. Attitude toward-object model. Concerns with the evaluation of some specific beliefs, norms or cultures that surround a product. This is mainly done with the objective of measuring attitudes towards various brands of product Attitude toward-behavior model. This is a type of attitude that entails displaying a behavior, or acting in a way in line with the object instead of the attitude toward that particular object again. The Theory of reasoned-action model. This comprises of the affective, cognitive and conative components. Strategies of Attitude Change. According to Leon, 2014 the Strategies of attitude changes are mainly acquired or learned. Experiences therefore determine them that individuals go through or experience and also other sources of getting information. The personality of an individual have an influence on their receptivity and also the length of time that can be taken for the attitudes to be changed in a particular way. Changing or altering attitudes is the real deal of the marketers, mainly when they are aiming at the leaders on the market they are involved. Diffusion of innovation Diffusion of Innovation explain the process of carrying out innovations in a certain population (Robinson, 2009). An innovation can be termed as an idea that is considered new by the people that are using the product and hence they do not have any experience with the product. This can be due to the fact that the product is new and has never been tested or used before by that particular population. Innovations have a range of qualities, stated below; 1) Relative advantage: It is a state where an innovation is considered a good or better idea, than the one that is currently being used by that group of people. An Innovation is considered better than an existing system by considering its convenience, satisfaction and also cost incurred. 2) Compatibility of innovations: This is a situation where an innovation can be said to be consistent with the factors of production and the objectives of the people in need of the innovation. The innovation should not produce results that are completely different from the systems were in place before the introduction of the innovation or results that are not expected at all. If an innovation can be seen to produce different values and hence incompatible with the values and practices, it shall not be adopted else it is reviewed again. 3) Simplicity: Business are competing to get more and more customers by making their operations simple and easy to use. This can only be possible when the systems in place are simple to use and thus eases the workload of the company. Before an innovation is implemented, a panel of stakeholders reviews it first to ascertain whether it is simple to use. 4) Trial-ability: An innovation should be able to be experimented first before it is fully implemented. This will involve using a sample data or resources then checking the outcome. If the results are what is expected, then the innovation ca be adopted but for a case where the results obtain does not auger well with the desired results, it’s not adopted. 5) Observable results: Visible results are realistic, and an individual can clearly make their conclusions concerning the innovation. It lowers the uncertainty of the people considering it. For innovation to be fully implemented, communication between different parties is paramount. Some of the communications that take place include; Communications between the marketer and consumers, Communications among consumers and mainly through word-of-mouth. The sources of acquiring information are impersonal, which include advertising and editorial matter and interpersonal sources which consist of salespeople and informal opinion individuals. It is important, however, to note the how innovations are spread or marketed. An innovation in place can be marketed through the media. This involves placing an advertisement in the print media, TV and also through the internet. However, some information might not be provided on such platforms. Marketing a product might be easy when it is done through the media platforms as stated above, but knowing how to use the product in real life might not be easy. It is at this point that the importance of communication by word of mouth is clearly seen. It takes an explanation by word of mouth to get to know how a certain product works. References Arpita, K. and Mrrnakshi, H. (2009) Role of individual self-concept and brand personality congruence in determining brand choice. Innovative Marketing; Azoulay, Audrey and Kapferer, J. (2003), “Do Brand Personality Scales Really Measure Brand Chambers, K. (2012) Internal Influences Affecting the Consumer Purchase Decision Making Process. Free Press; Evans, S. (1964): “Motivations: Underlying clothing selection and wearing”. Journal of Home Economics; Fanny, P. (2014) The 5 stages of Consumer Buying Decision Process. Retrieved on 19th May, 2015 from http://theconsumerfactor.com/en/5-stages-consumer-buying-decision-process/ The Consume Factor Publication; Lars, P (2008) Consumer Behavior. Retrieved on 18th May, 2015 from http://www.consumerpsychologist.com/intro_Consumer_Behavior.html Marshall School of Business University of Southern California Press; Leon G., Schiffman N., Leslie K. & S. Ramesh (2014) Bibliography Consumer behavior, Accessed on 20th May. 2015 From http://www.authorstream.com/Presentation/jignesh_pandav-1253109-consumerattitude-hirendodiya/ Kumar internet; McLeod, S. A. (2014). Maslow's Hierarchy of Needs. Retrieved from http://www.simplypsychology.org/maslow.html Oxana, S. (2011) Age differences in women’s shopping for clothes behavior, Gotland University; Personality?” Journal of Brand Management; Pride, W. & Ferrell, O. (1991). Marketing: Concepts and Strategies, Houghton Mifflin Company. 7 Ed. Vahid, N. and Seyed M. (2014) Factors Affecting Consumer Attitudes and Their Impact on Purchase Intention of Leather Clothes. Tehran, Iran, Allameh Tabataba’i University, Department of Management; Read More