Buying Behavior Types - Research Paper Example

2.5 Buying Behavior Types Consumers have four main types of buying behavior influenced by different factors relating to the consumer needs. This behavior include; complex behavior, dissonance tendencies, variety-seeking and habitual purchasing traits behavior. This section explains each of this consumer buying behavior types in details. Consumers with complex buying behavior are more aware of their needs in relation to products and brands (Ashraf, Rizwan & Khan, 2014). One main characteristic of this behavior type is less frequent purchases of particular products, which are relatively expensive. In most cases, it focuses on individual purchases with the consumers strongly aware of existing brand differences. On the other hand, dissonance buying is common for infrequent purchases with the consumer having fewer regards for a brand or product type (Prasard & Jha, 2014). Sharma (2014) points out that it is mainly characterized by consumer’s paying more close attention to the price ranges as compared to the brand or product quality. Different brand features result to consumer’s dissonance. As a result, consumers with this behavior may become more alert to brand information before decision-making (Njehia, Khamah & Njanja, 2015). As a strategy, companies employ marketing strategies that portray their brand benefits with the aim of attracting consumer preferences. Recent consumer behavior studies reveal that slightly over 65% of consumers are variety-seeking (Ashraf, Rizwan & Khan, 2014). This implies that most consumers prefer regular experimentation with brands and products in order to experience the variety effects or finally establish the most appropriate brand. Organizations with superior marketing strategies that target exploration of new products mostly benefit from these consumers. In cases where products are for daily use catering for such consumers, needs are virtually impossible (Njehia, Khamah & Njanja, 2015). Unlike the variety-seeking consumers, habitual buying behavior is characterized by daily or weekly purchasing of products (Sharma, 2014). Consumers with this behavior tend to be brand-specific. However, their specificity is not to be confused with loyalty but rather simply a habit mostly as a result of low costs. To attract these consumers’ preferences, companies develop visual symbols attractive to the consumers’ eyes and reminding them of the brand. Furthermore, the marketing campaigns entail short messages repetitions and tendencies to pique interests by highlighting product differences in favor of their brand (Prasard & Jha, 2014). Considering the different types of buying behavior, organizations strategize on techniques of attracting all consumer types for profitability. 2.6 Consumer Purchasing Decisions Consumers make various considerations before making decisions on products or brands to purchase (Ashraf, Rizwan & Khan, 2014). To understand these considerations identifying consumer buying behavior determinants is imperative. Adam & Ali (2014) explain five steps that characterize consumer decision-making processes. These include; need acknowledgment, information seeking, alternatives checking, buying decision and post-purchase considerations. This section explains each of these steps with the aim of providing insights into making consumer decisions. Need acknowledgment is essential in determining consumer decisions (Solomon., et al., 2014). This is arguably the first step to influencing consumer decisions, since without need then purchasing will be unnecessary. However, not all needs are influencing to consumer decisions due to the actual versus ideal situation existing lag (Prasard & Jha, 2014). The importance levels of the needs depending on the consumer’s perception help identify the ideal situation, mostly influencing purchase decisions. Additionally, various external and internal stimuli may be influencing to consumer needs. External stimuli are more related to social implications of purchases while the internal stimuli allude to more mental desires (Sharma, 2014). Following need acknowledgment, consumers venture into information searching with the aim of finding solutions for the needs (Jin & Yazdanifard, 2015). This information search seeks finding reliable product or brand information. Organizations with high market voice share percentages significantly gain from this step (Sharma, 2014). Consumers are more likely to make product or brand decisions based on the information content available for certain products and brands. Thirdly, consumers conduct alternative evaluations due to the existence of various products or brands in the market that provide similar solutions to needs (Prasard & Jha, 2014). Alternative evaluation may be based on the performance effects, brand quality and in most cases, the affordability. These considerations provide the two main alternative evaluation criteria; objective and subjective aspects (Solomon et al., 2014). By the time consumers make the purchase decisions, the first three steps have been considered. In influencing consumer decisions, it is imperative to control strategically the initial stages, at least for the second and third steps that can directly be controlled by organizational strategies (Sharma, 2014). Notably, consumers purchasing decisions may also be influenced by their shopping experiences, sales conditions and promotion availability (Jin & Yazdanifard, 2015). Njehia, Khamah & Njanja (2015) observe that post-purchase evaluation is useful to the consumer in analyzing the product solutions to the initial needs. Consumer satisfaction is more likely to influence their next purchase and preference for the same product while disappointment may cause the opposite effect (Adam & Ali, 2014). 2.6.1 Need recognition and problem awareness The decision of a consumer to act on a particular problem depends upon the scale of the incongruity between what the consumer has and what the consumer needs. It is also dependent on the importance of the problem. The instant the problem is recognized, it ought to be defined in such a way that the consumer is goaded into initiating an action that will bring a solution to the need presented (Kotler, 2012). This is thus the first step in the decision-making process of a consumer. The decision to buy gold by consumers is influenced by a variety of factors such as their income level, nationality, and gender. Demand for gold has been present for a lengthy period and in recent years the figures have multiplied considerably (Godbole, 2014). Gold buying behavior in the United Arab Emirates is attributed to the investment potential that gold possesses and the lifestyle in the country that is best described as luxurious. The purchase of gold portrays class and status that the Arabian society finds very imperative. There is, therefore, the need to buy gold in order to show off wealth possessed in the family among Arabian nationals (Vel, 2013). Other nationalities like the Indians treat gold as sacred and use it in the performance of religious activities. Individuals in the Indian society are thus inclined to buy gold despite their income due to the need to maintain their culture. Gender greatly influences the buying behavior of gold in that there is a variance between the reasons behind which men and women decide to buy products (Gupta, 2013). The insistence on fashion and beauty in the UAE has goaded many women into purchasing gold jewelry to adorn themselves with and show a touch of class. The men, however, buy gold with the need to invest in it or save it in case of future financial upheavals. With the increasing income per capita in the UAE, there has been increased disposable income, and thus there are more Emiratis purchasing gold. The changing shopping culture to luxurious buying and the sophistication of needs are factors that have changed the notion of gold being a materialistic product to an ideal need. 2.6.2 Information search Following the recognition of a need, a prospective consumer is inclined to seek information that aids in the identification and evaluation of alternative products or services that meet the need presented. The information that the consumer seeks can come from individuals such as friends and family, personal observation and the media (Kotler, 2012). The search for information involves acquiring all the pertinent information that is based on a product. During this process, the consumer gets to understand the different aspects of the product in terms of the value and quality among different brands available. Information search is involving in both mental and physical aspects. The benefits of a thorough information search are such as saving money, having the ability to improve on a selection of quality and the ultimate reduction of risk. Through the search of information, the consumer is also able to identify new needs. The level of involvement in the search for information portrays the complexity of the need. When the level of involvement is high, it means that the pertaining features of the product are greatly interlinked with the ultimate goal. Medium level of involvement is related to function where items that need to be purchased can be changed on the basis of the price and quality. Low level of involvement happens when the consumer makes a purchase out of habit. Buying of gold requires a high level of involvement based on its prestige and value as a precious metal (Xu et al., 2014). The involvement is also high due to the risks involved such as getting duped into buying fool’s gold in place of the real metal. Consumers may use information that they have been exposed to before through being told, observation or experience. Attention is then given to the information that is most likely to sate their needs. The appropriate information is retained in the consumer’s mind to be used in the choice of the product or the service that is needed. The retained information can then be retrieved later to assist in solving the evident problem. Information researched and processed on gold will assist the prospective consumer to buy the genuine quality of gold and the right amount on basis of gold market prices in the UAE, experiences from other buyers and the potential returns of the product (Reith et al., 2013). 2.6.3 Evaluation of Alternatives The increasing tendency towards decision making on the basis of utility has blurred the distinction between goods and services. The previous tangible goods are now judged in much the same way as service offerings, according to the utility they provide. The decision-making process, therefore, follows the rough criterion of the pre-purchase process of service offerings. Consumers are more invested in the value creation process, making the process of evaluation of alternatives longer (Tsiotsou & Wirtz, 2014). During the pre-purchase stage, a need triggers the search for information and evaluation of alternatives before settling on a purchasing decision. During the information search process, the consumer learns about the attributes they should consider when searching for the product and how the alternatives they consider performing these attributes (Lovelock & Wirtz, 2011). The multi-attribute model has been touted as the most appropriate simulation model for the consumer decision-making process. This is where the consumer compares different attributes of the companies or goods in the consideration set before making the final decision. Every attribute receives the weight corresponding to its significance. The multi-attribute model is based on the fact that human beings can make all the important decision-making attributes before making the purchasing decision. This is not the case, though, as some attributes are difficult to evaluate that others. There are three types of search attributes that consumers typically consider; experience, search and credence attributes. Search attributes are physically tangible and can be evaluated before purchase. These are important because they help reduce the risk of uncertainty. Experience attributes are more difficult to evaluate since one has to use the product or service before assessing such aspects as reliability, consumer support and the ease of use. Credence attributes are those that are difficult to evaluate even after the experience. The possible reasons are the lack of a means to make an accurate assessment, a lack of technical experience or the fact that such evaluation can only take place after a long period of consumption. The consumer is therefore forced to trust that the service has been delivered to the promised level. With respect to the purchase of gold, the most important attributes for many are the reputation of the shop, the carat size and the price for ornamental purposes. Investment based purchases raise a lot of credence and experience raise attributes. 2.6.4 Purchase decision The dual purpose of gold, as both a medium of storage and exchange and a sales item, makes it unique in that it can either be presented in terms of goods or services. Today, consumers are more interested in the service co-creation process, a fact that translates into the gold market in both its attributes. This brings to the fore the issue and importance of consumer engagement (Brodie, Hollebeek, Juric, & Llic, 2011). Consumer engagement is the emotional tie that connects the consumer to the service provider (Goldsmith, 2011). This tie can be leveraged to improve the emotional and rational bonds between consumers and the firms or companies thy deal with. For instance, while the information search and evaluation of alternatives process can be considered rational, other emotional factors can potentially influence the purchase decision in the context of buying gold. The choice of the consumer depends on the attributes they consider most important and the data available to them during the search process. However, it is important to realize that such aspects as the promotion availability, sales, the shopping experience and other attributes that target the emotional context of the process might also affect the purchase decision. Gold purchase for ornamental purposes and investment presents a markedly different trend in terms of purchase decisions. Agreeably, the process of co-creation of value during the service encounter stage carries greater significance in gold for jewelry than in gold for investment. Many consumers in the jewelry category purchase gold for status, and this makes the aspect of co-creation for use: choosing carat size, for instance, and co-creation for others: word of mouth and appearances in public, important in this market segment. Consumers here provide not only information but also ideas for the development of new ideas for the encounter stage (Elg, Engström, Witell, & Poksinska, 2012). The positive interaction that comes with positive leveraging of this aspect of the purchase decision process results in a positive behavioral manifestation towards the brand, product of shop (Van Doorn, et al., 2010). Purchase for manufacturing and investment is more utilitarian. Here, the contact between the consumer and the service providers are minimal and often happen electronically or through physical distribution channels. 2.6.5 Post-Purchase Evaluation The post-purchase decision is when after the product or service has been bought, the consumer evaluates whether they made a theright decision. There are often three possible outcomes of the post-purchase evaluation process, satisfaction, dissatisfaction or dissonance. Often, the relationship between pre-purchase attributes and the satisfaction, or lack thereof is linear. For instance, when one buys gold for its ornamental purposes but does not find it particularly good looking, then they will be dissatisfied on this basis. However, there are situations in which the criteria used in making the pre-purchase decisions does not necessarily relate to the satisfaction or dissatisfaction after purchase. Again, in terms of post-purchase evaluation, the conditions are different in gold for investment and gold for utilitarian uses such as manufacturing and in the jewelry field. Despite the fact that gold was discontinued more than 40 years ago, it is still considered environmentally scarce and retains the value that transcends fluctuations in economic conditions (Scacciavillani & Saidi, 2010). Its physical conditions have also made it an enduring valuable and enduring commodity (Schenk, 2013). However, one must realize that the value of gold in terms of its use in investment poses an interesting question since the value cannot be explained using the conventional asset pricing models. It also essentially has different prices judging from the fact that it is often quoted in terms of US dollars. Post purchase evaluation for the purchase of gold for ornamental purposes is dependent on the pre-purchase attributes. The issue of dissatisfaction regardless of the product meeting all the pre-purchase needs and expectations raises the issue of dissonance. Dissonance happens when one belief contradicts with another previously held belief. Human beings seek consistency in their belief systems (Sharma, 2014). The extent of the dissonance experienced by a consumer is a function of such aspects of the purchase as the degree of irrevocability or finality in the purchase decision, the difficulty involved in choosing among the alternatives, the tendency of the individual to experience anxiety and the importance of the decision to the consumer. References Adam, M. A., & Ali, K. (2014). Impact of Visual Elements of Packaging of Packaged Milk on Consumer Buying Behaviour. Interdisciplinary Journal of Contemporary Research In Business, 5(11), 118. Ashraf, M. G., Rizwan, M., & Khan, M. A. (2014). The promotional tools and situational factors’ impact on consumer buying behavior and sales promotion. Journal of Public Administration and Governance, 4(2), 179. Brodie, R. J., Hollebeek, L. D., Juric, B., & Llic, A. (2011). Customer Engagement: Conceptual Domain, Fundamental Propositions and Implications for Research. Journal of Service Research, 252-271. Elg, M., Engström, J., Witell, L., & Poksinska, ,. B. (2012). Co-creation and Learning in Healthcare Service Development. Journal of Service Management, 328-343. Goldsmith, R. E. (2011). Brand Engagement and Brand Loyalty. In A. Kapoor, & C. Kulshrestha, Branding, and Sustainable Competitive Advantage: Building Virtual Presence (pp. 122-135). Hershey, PA: IGI Global. Gupta, S. (2013). The psychological effects of perceived scarcity on consumer buying behavior: Dissertations and these from the College of Business Administration Helen Xu, Eric C. Lin, John W. Kensinger  (2014), On the Estimation of Risk Premium in the Gold Futures Market: Using the Goldman Sachs Commodity Index (GSCI) Approach, in John W. Kensinger (ed.) Research in Finance (Research in Finance).  Emerald Group Publishing Limited, 29, 103 – 118 Jin, O., & Yazdanifard, R. (2015). The Review of Contemporary Branding Techniques that can Influence Current Consumer Buying Behavior. Kotler, P. K. (2012). Marketing Management: A South Asian perspective 14th edition. New Delhi: Pearson Prentice Hall. Lovelock, C., & Wirtz, J. (2011). Services Marketing: People, Technology, Strategy. New Jersey: Prentice Hall. Njehia, B. K., Khamah, A. H., & Njanja, L. W. (2015). Investigating the effect of corporate social responsibility on consumer buying behavior. Prasad, R. K., & Jha, M. K. (2014). Consumer buying decisions models: A descriptive study. International Journal of Innovation and Applied Studies, 6(3), 335. Sharma, M. K. (2014). The Impact on Consumer Buying Behaviour: Cognitive Dissonance. Global Journal of Finance and Management, 6(9), 833-840. Solomon, M. R., Dahl, D. W., White, K., Zaichkowsky, J. L., & Polegato, R. (2014). Consumer behavior: buying, having, and being. Upper Saddle River, NJ: Prentice Hall. Reith, F., Brugger, J. Zammit, C.M. Nies, D.H., Southam, G (2013). Geobiological Cycling of Gold: From Fundamental Process Understanding to Exploration Solutions. Minerals , 3, 367-394. Swati, S., & Kirti, A. (2014). Retail Investors and Gold Buying Behaviour – A Perpetual Study of Indian Retail Investors. Accounting and Finance Research. Sciedu Press Scacciavillani, f., & Saidi, N. (2010). The Case for Gold as a Reserve Asset in the GCC. Dubai: Dubai International Finance Center. Schenk, C. R. (2013). The Global Gold Market and the Internationa Monetary System. In S. Bott, The Global Gold Market and the International Monetary System from the Late 19th Century to the Present (pp. 1-17). New York: Palgrave MacMillan. Sharma, M. S. (2014). The Impact on Consumer Buying Behaviour: Cognitive Dissonance. Global Journal of Finance and Management, 833-840. Tsiotsou, R. H., & Wirtz, J. (2014). The Three-Stage Model of Service Consumption. In J. P. Bryson, & P. W. Daniels, The Handbook of Service Business: Management, Marketing, Innovation, and Internationalisation, Cheltenham: Edward Elgar. Van Doorn, J., Lemon, K., Mittal, V., Nass, S., Pick, D., Pimer, P., & Verhoef, P. C. (2010). Customer engagement behavior: theoretical foundations and research directions. Journal of Service Research, 253- 266. Vel, P. & Rodrigues, J. (2013), 'Online purchase of luxury products in the UAE', World Academy of Science, Engineering and Technology, (76), 1292-1298. Read More