Moderators of Consumer Gold Buying Behavior - Case Study Example

Moderators of consumer gold buying behavior (Name) (University) Moderators of Consumer Gold Buying Behavior The buying behavior of consumers involves the processes that a buyer goes through in order to acquire goods and services (Onditi, 2013). The behavior involves a decision making process whereby there is a pattern that precedes the process, determines the process and eventually succeeds the process. The decision making enables customers to acquire products and services that ultimately satisfy their needs (Zeithaml 2012). There are different elements that altogether contribute to the process and these are such as psychological elements, sociological elements and economic elements (Kotler 2012). This retrospect paper seeks to discuss the buying behavior of consumers who purchase gold. The retrospect paper is based on gender, personal income and nationality as the moderators of gold buying behavior. Gold is a precious metal and it has been valued for years by different cultures, nations and states for its purity and potential to generate wealth. Gold has been used and still continues being used as a form of currency and object of beauty. The established buying power that gold possesses and its fundamental value characteristics make it a worthy investment. The demand for gold has been high for over thousands of years thus it is vital to appreciate the factors that moderate the trade of gold (Godbole 2014). Consumers usually go through a buying decision process which has five stages and is inclusive of the moderators discussed in this paper. A consumer recognizes a need that is present then searches for information regarding the need. The consumer then evaluates the alternatives that are available for the need presented and makes a decision to purchase a product or service that will satisfy the need. The consumer then assesses the result of using the product or experiencing the service through post purchase behavior. The following sections address the moderators of the buying behavior of gold. Gender and Gold Buying Behavior Based on factors such as psychological factors, biological factors and social factors, men and women portray different types of behavior when buying. These are not the only factors that affect the buying behavior as the upbringing of different genders and the process of socialization with peers and other members of the society to a huge extent influences behavior. Gender plays a vital role in the behavior of consumers as the needs, expectations and lifestyles of the genders have large variances. Females are more inclined to be risk averse in that information is sought on the products and services that are to be bought and comparison with other products and with other people who have bought a similar product is usually made. Men on the other hand seek to use the minimum time possible to purchase what is needed and be done with the process (Gupta 2013). Women mostly buy fashion based items to enhance their appearances while men seek to buy clothing or other accessories because they are in need of them. As much as the factors of the cultural value of the item being bought and its economic aspect are put into consideration the reasons why the two genders buy gold greatly differs (Gupta 2013). Women mostly buy gold due to its fame and popularity and the fact that when adorned it adds a spectacular touch of class. In India for instance, most festivities have decorations that are inclusive of gold and many families would thus be obliged to purchase them as a show of class (Godbole 2014). Men base their interest in the purchase of gold mostly as a form of accumulating wealth. They sometimes wear them as jewelry; throughout or during festivities. Most men also regard interest in the larger investment of gold such as merchandising as it is among the most profitable jewel business globally. These differences explain the varied decisions that men and women make during purchase such as the appearance of the metal (Godbole 2014). Personal income and gold buying behavior Income is the payment received by one that is used to cover personal expense. The personal income of a buyer affects the way in which money is allocated. The income, whether low, high or medium is affected by other factors such as the ability of the individual to make well researched purchase decisions and whether or not the individual saves. The culture of the individual may influence the buying decision for instance the beliefs and practices that the individual grew up with such a saving culture will affect this process (Pinki 2014). Low income earners have a tendency to buy what they need most due to limited income. Low income earners also exhibit predispositions to saving money in order to achieve a product or products that they cannot buy on their regular income. Based on the belief of different subcultures such as the presence of gold adornments in United Arab Emirates during festivities, a low income earner would save up to buy a little piece of gold so as not to get left out in the activities involved. Middle income earners are mostly active consumers as they are able to engage in buying of most products in the market. The behavior of middle income earners is balanced due to the ability to purchase items that are most common in the market for both low and high income earners (Pinki 2014). Buying of gold by individuals across all the three income groups has different motivations. Persons with high personal income would most likely purchase gold with the concept of a business investment as their motive. Prestige is also involved as most high income earners need to show their class through possession of gold adornments (Godbole 2014). Peer influence among persons with high income largely contributes to the ultimate decision to purchase gold. Middle income individuals and families make up most of the world’s type of families. The focus of the mass media is always mostly on this category of people. Middle income earners usually buy the popular products. Their motivation to buy gold would depend on the market prices an instance is when there is a reduction in the price of gold. Low income families or individuals are characterized by the inability to get satisfactory housing facilities and a regular supply of their needs as the income received is mostly limited (Godbole, 2014). Access to benefits such as social security is quite impossible as basic needs are barely achieved. The focus of low income earners on gold would at best be with the motive of garnering enough money to provide for basic needs and hopefully upgrade to a better livelihood. Some of these families have heirlooms which are kept in respect of culture and religion thus use of gold found in the family is restricted to sacred rituals (Godbole, 2014). Nationality and gold buying behavior The nationality of buyers is an essential factor in the buying behavior of individuals in that this is the place where the individual’s culture and belief system is rooted thus affecting purchase behavior. The people of a nation form an intimacy to their nation and feel a sense of belonging due to associating with people similar to them. Nations are also guided under the same structure, children go to institutions with a particular structure for the nation thus a culture is set. The Arab society considers the family as a very strong pillar (Vell 2011). The way that an individual behaves directly impacts on the relations present as such it is the kin that direct the patterns of behavior of a person. Arabian nationalities are attuned to luxury living thus the possession of gold is directly relative to good living. The decision on the jewelry purchased in the homestead affects the family in that it shows the family’s respectability in the society. Arab consumers show vital importance in showing off what they have and what they wear to reveal the status of the family or individual. As such the buying of gold in the United Arab Emirates is very high due to the need to preserve class and distinctiveness in every aspect (Vell 2011). In the Indian society, gold is considered as part of their cultural and belief system. The process of evolution that gold passes through and its reputed purity has made Indian nationalities to consider gold as sacred item. Religious functions in India are hardly conducted without the presence of gold. The community believes that gold symbolizes good fortune and prosperity. The precious metal has been used as a medium of exchange across the systems of money in the Indian subcontinent. In the second quarter of the year 2013, the demand for gold in India had increased by 71 percent when compared to the second quarter of the year 2012. Gold is solely bought in its physical form. The major forms include bars of gold, gold coins and at times medals made of gold. The rise in demand to 116 percent in 2013 shows that gold is a growing investment in the region (Godbole 2014). Studies in India show that the demand for gold is based on the socioeconomic trends and cultural relations that attach the Indian society to gold. Demand for the metal is also largely reliant on the relative price of gold and the investment diversification that is involved. China was rated as the top gold consuming nation in 2013. Residents of china have invested in the gold market and are the leading jewelry market globally (Forbes 2014). The Chinese mostly use gold in weddings and other jewelry is exported to different countries for sale. Gold is also bought as insurance thus the Chinese price wariness does not exist leading to maximum sales. This is in contrast with the United States where consumers are price sensitive and have mainly adorned gold for fashionable purposes (Forbes 2014). Conclusion Various aspects determine the buying behavior of consumers. Gold is an infrequently purchased item to the normal consumer. Buying behavior of gold is rooted in cultures where gold is treated as sacred such as in India. Other cultures such as in the United Arab Emirates purchase gold to maintain and show off the luxury they have while in other countries it is used for trade. Men and women explicit varying behavior when it comes to buying of gold. This comes from the different backgrounds and factors including psychological, physiological and social. Personal incomes of individuals also greatly affect buying behavior as the low income families will place greater priority on the basic needs while high income families, where money is not a problem will have the luxury of buying and utilizing the use of gold in various ways. References Forbes,.(2014). Chinese gold demand to rise by 20% in 2017: urbanization main driver Gupta, S. (2013). The psychological effects of perceived scarcity on consumer buying behavior: Dissertations and these from the college of Business Administration Kotler, P. K. (2012). Marketing management: A south Asian perspective 14th edition. New Delhi: Pearson Prentice Hall. Onditi,J. (2013). Relationship between customer personality, service features and customer loyalty in the banking sector. International journal of business and social science Pinki Rani (2012). factors influencing consumer behavior: International journal of current research ;52-61 Swati S Godbole & Kirti A Arekar (2014). Retail Investors and Gold Buying Behaviour – A Perpetual Study of Indian Retail Investors .Accounting and Finance Research . Sciedu Press Swati S Godbole1 & Kirti A Arekar .(2014). A study of factors influencing gold investment decisions of retail customers in India. Accounting and Finance Research Vel, K., Captain, A., Al-Abbas, R. & Al Hashemi, B. (2011), 'Luxury buying in the United Arab Emirates', Journal of Business and Behavioural Sciences, vol. 23, no. 3, pp. 145-160. Read More