Consumer Behaviour, Need Recognition and Problem Awareness - Coursework Example

Running Head: CONSUMER BEHAVIOUR Consumer Behaviour Name: Date: Consumer Behaviour Customer profile is either analysed demographically or it can be behavioural. It is essential for the marketers to identify these differences and categorise their target customers into one of the named profile. Most marketers are confused on this issue as they have failed to know the exact kinds of customers’ profile. In reality, there are only two kinds of customer profiles. These comprised of demographic and behavioural. Customers with families i.e. a customer who is married with kids and he or she falls under the category of consumers with high incomes are under the category of demographic. Researchers have found out that these customers read Time magazine and this means that they are well informed concerning the products that they normally buy or plan to buy. The other kind of customer profile is that customer who visits the site on daily basis and can sometime miss to visit the site. This kind of customers falls under the category of behavioural. Marketers have been having problem when making decision on the profile to serve. According to Funk (2008) both profiles are very important though it will depend on the kind of the marketing activities. For example, the consumer profile (demographics) defines the market for advertisement. This will benefit the marketers who are carrying out marketing activities by means of advertisement. The marketers will be in apposition to mention all the qualities the customer is looking for in the product. When the marketer has identified the consumer profile (demographics), it will be easier to influence the customers to purchase products in the market and finally this will increase the revenue due to high profit which will be realise as a result of serving many customers in the market. The second profile is also important because it deals with the behaviour of the customer after experiencing the product purchased. This will be dealt with accordingly under post-purchase evaluation - cognitive dissonance which falls under the last stages of the decision-making process. Between the two customer profiles, the second profile is very important as compared to the first one because it explores the action of the customer and the customer’s behaviour. Furthermore, the second profile is essential for business safety because it determines whether the customer will come back or not. In addition to this, it will answer the question such as “will they visit again?” Or “will the customer repurchase the product in future?” Answers to these questions can be obtained by looking at behaviour of the customer. All these must be considered to ensure long term relationship with the customers and also to create customer loyalty. Recently, I underwent a high involving consumer decision when I was buying laptop. I bought my laptop from one of the leading computer dealers in the world. The company is called Hewlett-Packard Development Company (HP). The company sell its product expensively because they want to maintained there positive perception of their customer. The company sell their computers at higher price so as to indicate the quality of its product. Many customers in the market believe that “cheap is expensive”. This belief has turned many customers to prefer expensive computers in the market. The company maintained the customers’ profile so that they can develop appealing advertisement to these customers in the market. According to Longenecker (2009) customers undergo 5-stages when making decision on whether to purchase or not a product. The following diagram summarises the whole process of decision making. The complexity of the process depends on the kind of a product to be bought; some times it depends on the buyer. According to Maclaran (2009) the process is complex especially if the customer is a company and not individual customer. All these process must be followed so that the company can buy a quality product and also to conform to the rules as stated in the article of association. All the stages in decision making is very important though the most crucial one is the “information stage” whereby the buyer should ensure that the information collected is relevant Need recognition and problem awareness This is the first stage in buying process; every customer undergoes this process when buying a product. Most literatures have given the possible factors which can cause and activate need recognition. Examples of such factors which can activate problem recognition are the marketing efforts by the marketers who are marketing the products. Most of the marketers have learnt the qualities in which the customers are interested with when buying a product. Due to this, many marketers communicate such qualities in their advertisement so that they can attract customers and convince them to buy those products (Dubois, 2000). In my own case, the “need recognition” of a laptop a rose when I came across marketing team of Hewlett-Packard Development Company marketing their products (computers). These marketers were communicating the advantages of their computers stating some key features of those computers. Some of those key features include high speed of the processor, laptops with two processors and the durability of those computers. Purchasing process began when I had identified the problem or when the need of a laptop had aroused. This process of recognising what you want is an automatic responds to marketing stimulus and that was exactly what happened to me. When I had recognised the need that I should buy a laptop, I then started looking for some relevant information concerning the laptop. I had to contact an IT person who would tell me more about computers and their specifications. That was very important because the price depends on the specification of such computers. Many theorists such as Taylor believe that the moment the customer comes across the product which can satisfy his needs completely, then the buying process will come to end because that customer will purchase that product without considering other alternative. However, the customer will proceed to the next step in case he did not find appropriate product which can satisfy his needs (Dubois, 2000). Information Search When I had recognised the need of a laptop, I started looking for more information concerning the product I was planning to buy. Some of the various sources of information I utilised was from personal sources such as friends, family members, or neighbours. I had preferred this source of information because it was cheap, easily accessible and affordable. Though there were also other various source of information, I did not consider those sources because I got enough information from personal sources. These other sources comprise of commercial, public and experimental sources. Customers can obtain information from commercial sources such as point-of-sale displays, sales people in the market places, advertising and retailers. Customers can also obtain information from public sources such as media, specialized magazines and newspapers. Commercial sources are considered to be better than personal sources because it is possible to keep information for longer time. The last source of information to the buyer is commonly referred to as experiential sources whereby the buyer can handle the product and examine it. All the above sources are very important because it gives a buyer a chance to compare these sources. These sources give a customer an opportunity to make the right decision because wrong decisions are very expensive especially when the product to be bought is expensive and product without a warranty (Hollensen, 2009). However, the importance of these purchasing procedures will depend on the product that the customer is planning to buy. This is the most challenging part for marketers who are marketing these products. Most literatures believe that the customers rely on personal sources than commercial sources. They normally refer personal sources as “word of mouth”. Evaluation stage Evaluation stage was my next step after I had gone through the stage of searching for information, it was necessary for me to evaluate all other alternatives which was available before I made up my mind on whether to buy or not. I had to consider many factors when I was choosing the alternatives which were available (Pennanen, 2008). Some of the factors which I had considered include the price of the laptop, the brands i.e. whether will last for long and also I had consider buying a laptop that would satisfy my needs effectively. In most cases the customer will make his decision basing on the information he had receive in the “information search” step. How does the customer use the information obtained? The customer will use the information obtained in the following ways. First, the customer will use the information obtained to determine or to make decision on the available alternatives. The information received in the previous step should reflect the customers’ problem so that the customer can feel that the product will satisfy his needs in case he made that important decision of purchasing it. There are other instances whereby the product to be purchase is highly involving and the customer at such instances should go for more information regarding the same. This information should give solution on which alternative to be obtained (Council of Europe, 2009). Through my own experiences, I have come to know that more information needs to be obtained when the product is not only expensive but also highly involving. Some of the purchases which are considered to be highly involving include the situation of making decision on investment to be made, purchasing house through mortgage loans and when purchasing complicated products such as laptops. In contrast, there are products which are considered to have low involvement when buying decision is made; these include purchasing of breakfast cereals in a supermarket, or buying a soft drink in a restaurant. Such products require simple evaluation process in which the buyer needs not to inquire further information. It is advisable for the marketers to understand the evaluation process of the customers so that they provide relevant information in their adverts so as to influence the customers’ decision in buying process. Marketers should be very keen to provide customers with numerous reason of buying a product whenever the customer is faced with a problem of high-involving decision. The marketer needs to provide the customer with the positive result of using the product. Furthermore, he (marketer) can provide the evidence of the positive results and other important attributes attached to the product. These benefits which the customer will receive after buying the product need to be used as a tool of differentiating the product with that of competitors in the market. Purchase decision Evaluation stage helps the consumer to make his or her decision on which product to buy, at this stage, the consumer form a ranked set of preferences of the products he want to buy. The consumer, at this stage will consider other factors such as attitudes of his close parties such as wife, friends or family members. Secondly, he will consider the cost and the benefit of that product and lastly, he will look at the management of that company he is going to purchase a product. Post-purchase evaluation This was my last step of buying process. According to Dubois (2000) this is the most important part of buying process both to the customer and the marketers. This last step will determine whether the customer will repurchase the product in future or not. In addition, the step is important to the marketer because he will have a chance to get to know the performance of the product. Some of the academic books refer this process as cognitive dissonance. This describes a situation where the customer might feel that alternative could have done it better than what he has experience from the product he had purchased. Such negative attitude arises when the customer is not satisfied with the performance of the product. It is also evidences that such customers might take longer period before he repurchases the product while others quit the product completely. In conclusion, the products offered can either satisfy the customer or dissatisfy the customer and this can have effect on the following issues. First, it will affect the perception of the customer toward the product and the company in general. In case the product performs negative then the customer will have negative perception toward that product and the company which sell that product. It also true that the customer will compliment the product in case the experience with using the product is positive. Finally, the company should design a system of following up the customers so as to find out the performance and congratulate the customer for buying such a product. Such follow up is very important as it enable the company to realise the areas which needs improvement. Factors influencing the decision-making process External Factors There are various external factors which influences marketing activities, some of these factors consist of lifestyle, reference groups, household, social class, culture and values. All these elements affect the perceptions of the customers toward the products and can also influence the customers’ behaviour. It is important for the marketers to understand the lifestyle and the cultures of people they target in the market so that they can advertise their product to the right customers in the market. This will enable the marketers to deliver the right information which the customers expect to hear in the market. Besides, the company will be in a position to develop products that can satisfy the customers’ needs effectively. It is important for the marketers to be aware with the cultures of the people whom are being targeted to ensure that the advertisement does not conflict with those cultures. Most people especially Muslim respect their cultures and cannot accept anyone to interfere with it (Usunier, 2009). Apart from this, large companies need to participate in the community projects as way of returning value to the society. They can do this by participating in social corporate responsibility. This will make the community to feel that the company is part of them and that they respect the well being of the people in the society. Internal factors There are also internal factors which influences marketing activities in the market, some of these factors comprise of attitudes, knowledge, roles, perception, learning and memory, motives, personality, emotions and motivation. These factors play an important role in influencing the customer to buy the product. For example, if the customer has some background knowledge on certain product he will either buy that product or leave depending on his past experience. If the customer had once in past used a product and the result was negative, then it would be difficult for him buy such a product again in future. Marketers should learned how to market there products effectively in the market so that they can change negative perception of the customers in the market. Some of the customers has sharp memory whereby they remember all the past experience they underwent they had used a product. Such customers should need to be informed on the recent changes on the product and this information can be communicated inform of advertisement. Marketing activities Marketing activities are influenced by the external and internal factors as stated above. To carryout marketing activities effectively, the marketers need to ensure that they are marketing the right products to the right people. To ensure that this is achieved, there should be market and marketing research so that the interests of the consumers are so that the company can manufacture the appropriate products that can satisfy the customers. The other factors which can affect or influence the marketing activities in the market are the 4 P’s. These four P’s comprise of price, product, place and promotion. Price affects the marketing activities in the market in various ways and can determine the attractiveness of that product. When the products are highly priced, the marketers tend to carryout high marketing activities which will encourage many customers to purchase the products in the market. Then again, products which are lowly price tend to have low marketing activities because the customers will come for the products automatically. Low prices are commonly used to attract customers and thus reduce the need of marketing those products in the market. The next factor which determines the marketing activities in the company is the products. The type of product determines the amount of marketing activities to be used in the company. Highly perishable products should be marketed highly so that the consumers would buy them in time before they perished (Maclaran, 2009) There are products especially mechanical product which in most cases have no substitutes are inclined to have low marketing because the customers will purchase them regardless of whether they are marketed or not. In summary, the products which need to be marketed are those with substitutes. Customers spend less time when they are making decision on products that have no substitutes. The next factor which influences marketing activities is the place. Distribution of products in the market is very important as it will help the customers to access them in the market. When the products are far away from the customers, the marketers need to carry out marketing activities so that the products known to many customers in the market. It is advisable for the marketers to inform the customers about the existence of the products in the market so that customers can buy them. The best means of informing the customers about the existence of the product in the market is through advertisement and other promotional means. As stated above, marketers need to understand the lifestyle of people in the market segment they target. This will facilitate the marketers to deliver the relevant information to their target market segment. In addition, the marketers will be in a position to deliver the quality products which will satisfy this people completely. Marketers should know that the customers in the market matters a lot because they are the one targeted. The companies should therefore ensure that they create a positive picture of their company and the product they offer to the customers. Literatures have found out that when the customers have positive image about the company, they are will trust the company’s product and thus creating customer loyalty (Saxena, 2002. p 514) Critical reflection The biggest thing I have learned from this class is the stages which the consumer underwent when making a decision on whether to buy a product or not. This is very important as it will help me in future to make decision which I cannot regret it. Though I underwent a high involving consumer decision when I was buying a laptop, I learned a lot that next time I will be purchasing an expensive product I will know where to get the information concerning the price, the quality of the product and its durability. Furthermore, I have learned from this class the main factors that influence the marketing activities and the way the marketers react to those factors when carrying out marketing activities in the market. Consumer buying process is very important process to be understood by everyone because we involve ourselves in purchasing products on daily basis. The reason for understanding this process is to avoid making wrong decision and end up buying products which will not last for long. In addition, I have learned from this analytical tool that companies should arrange and train their marketers who are going to market their products. They should ensure that the marketers are familiar with the products they are marketing so that they can easily influence the customers to buy the products. Many customers want to know the site effects and the benefits they will get from the product in case they decide to buy. Secondly, the company should ensure that the marketing department has carried out the market research so as to identify the exact needs of the customers and deliver products which can satisfy them. It is important to analyse the competitors’ products and how they price them so that the company can produce quality products than those of competitors in the market. Conclusion In conclusion, the company should segment its market effectively i.e. segment the market demographically so that the customers with the same characteristics are grouped together. This will ensure that all the customers in the market are satisfied (Reid, 2009). Consumer behaviour is very important to the marketers because the marketers will be in a position to identify what the customers are looking for in the products. It can also assist the marketers to come up with the appropriate promotions that can influence the customers to make their purchases in the company. Furthermore, the company should ensure that their employees are competitive in serving the customers in the company. The human resource manager should arrange for training of the employees to ensure that the employees are serving the customers effectively in the company. The human resource manager should also ensure that they have effective employees with good customer care ethics when handling the customers in the market. This is very important because it will eventually create good relationship with the customers. References Funk, D. C. (2008). Consumer behaviour in sport and events: marketing action. Butterworth- Heinemann. Usunier, J. C. 2009. Marketing Across Cultures. Prentice Hall Maclaran, P. 2009. Contemporary Issues in Marketing and Consumer Behaviour. Butterworth-Heinemann Council of Europe, 2009. Rethinking Consumer Behavior for the Well-Being of All - Reflections on Individual Consumer Responsibility (2009). Council of Europe Dubois B., (2000) Understanding the consumer, Pearson Education. Hollensen, S. (2009). Essentials of Global Marketing. Pearson Education, Pennanen, K. 2008. The initial stages of consumer trust building in e-commerce: a study of Finnish consumers. University of Vaasa Reid, R. D. 2009. Hospitality Marketing Management. John Wiley and Sons, Longenecker, J. G. 2009. Launching entrepreneurship. Cengage Learning Saxena, 2002. Marketing Management. Tata McGraw-Hill Read More