Consumer Behaviors Role in Business and Society - Assignment Example

Revision questions Name Course name Date of submission Question 1 Explain Consumer behavior’s role in business and society Consumer is the only user of the product in the market. Consumer behavior basically refers to the decision made by the buyers in the market about the product whether to purchase or not. Consumers alter their desires basing on interpersonal reasons and individual wants. Therefore, marketers strive to understand this behavior in order to create market motivation which will catch the attention of consumers in order to make high purchases. a) Consumer behavior’s role in the business Consumer behavior plays a crucial role in industry by aiding the set up of new market strategies in a business that will enhance implementation of new policies which will guide and boost purchases. These policies concentrate on the attitude of the consumer and change it in order to buy a product. However, it may be difficult to change one’s character and perception either. Therefore it is a process to build the attitude of the consumers. b) Consumer behavior’s role in the society Consumer behavior harmonizes the needs of the consumers in the society. Though consumer behavior is an individual facet, the society comprehends all the other behaviors and eventually these attitudes will create a harmonized need in the society. Question 2 List each of the five factors in the CVF model, and then provide a definition for each of the five factors followed by a brief description using an example that explains the workings and inter-relationships of the five factors a) Value: It is the net worth of the product. We have utilitarian value and Hedonic value. Utilitarian value focuses on how much benefit in terms of performance and quality will the consumer gain from the product. For instance, durable products have utilitarian value since the consumer will use it for a longer time. Hedonic value is the satisfaction that comes after experiencing the product. b) Relationship quality: It is that proximity or commitment of consumer to the product that will persuade the consumer to purchase the product. c) Consumption process: The process in which goods and service are used and transformed into value. d) Individual differences (internal influences): These are personal values and perception that the consumer has on the product. It is derived from consumer’s psychology and personality. e) External influences: It is the social setting that encloses the consumer and situational pressure as well. For example culture values, family influence and timing. Question 3 Explain how the customer value framework including its five components may influence marketing strategy development. Use an example to illustrate your answer Business will create new marketing plans to increase the value (utilitarian and hedonic) of the product in order to gain competitive advantage over its competitors in the market. Therefore, cost benefit analysis on the product will greatly influence the marketing plans since the business will straggling to create a market stimuli for its consumers. For instance, a business may sacrifice a lot of finance so as to make a product convenient to the consumers in order to gain a competitive advantage over the other competitors in the market. It also leads to marketing segmentation. Question 4 Use the Customer Value Framework (CVF), including its five (5) components to explain one (1) of your recent purchases. My recent purchase was a dinning set. I had to commit myself to purchase the product because I had external influence from the family. Before I had internal perception on the product, that is, it when I purchase, I do waste my money. However there was that consumption process that made me realize the value of the product (both utilitarian and hedonic). Therefore I had to purchase. Question 5 Define consumer value then compare and contrast two key types of value explaining the impacts of internal influences, external influences, relationship quality and the consumption process on value. Consumer value is the difference between all the benefits derived from a total product and all cost involved in acquiring those benefits. Utilitarian value portrays product quality while hedonic value portrays the experience of the consumer on the product. Internal influence controls the costumer behavior on the value. Therefore the personality of the consumer will determine the choice on whether to purchase or not. External influence like pressure or social class will apparently give an option to a consumer to purchase a product. The relationship quality between the consumer and the product will enhance the commitment to the product and thus will experience the value over time. In consumption process, if the product gratifies consumer’s needs, absolutely the consumer will experience the value of the product over long period. Question 6 In the CVF model, two concepts, external influences and situational influences were introduced. Using your own words explain your understanding of the difference between situational influences and external influences Situational influence where a consumer is predisposed to unexpected circumstances where by the will purchase the product unexpectedly. May be the circumstance, the occasion or the impression has made the consumer to purchase the product at that time because there is a need for the product. External influences are the aspects outside consumer’s notion but within the environment that will affect consumer’s purchases. For instance in a cultural context, to be accepted as part of that culture, one should acquire one or two assets for identification. Therefore consumer behavior is developed so as to acquire this asset. Question 7 Define utilitarian value and hedonic value, and provide examples of products that represent these two types of value. Utilitarian value is basically product-centric or price-centric associated with low price, or a quality for price ratio, or focusing on what the product or service will do for the consumer at a low cost. Examples of these products include; Solar panels and energy converters. Hedonic value is direct satisfaction that comes from experiencing the product. May be the consumer gains the value of the product from the other consumers in the same environment therefore he will create hedonic value. Examples of these products are; vehicles ‘boots’. For instance, consumer may realize the value firestone ‘boot’ after experiencing together with other consumers. Question 8 Compare and contrast utilitarian value and hedonic value. In your answer provide an example of two products that represent utilitarian value and two products that represent hedonic value Utilitarian value satisfies directly the needs of the consumer since the product is perceived on the basis of performance, worth and the dependability while hedonic value builds consumer’s self esteem on the product since it is out of experience that will make the consumer feel the value of the product. Examples of products that represent utilitarian value Solar panels Duracell Examples of products that represent hedonic value Samsung LCD screens Gillette shaving machines Question 9 Both balance theory and self-improvement theory are motivational drivers of action and help to explain consumer behavior. Utilitarian motives have more to do with maintaining the status-quo; whereas hedonic motives are usually having more to do with self-improvement. Using your own words with examples, compare the difference between utilitarian motives and hedonic motives. Utilitarian motive is the aspiration to obtain goods and services that can be used to serve or accomplish something or a specific purpose while hedonic motive inspires the consumer who value pleasure and enthusiasm. Question 10 Explain how a marketer would use their knowledge of emotional involvement and flow to develop marketing communications for (a) a smart phone and (b) an adventure holiday. Emotions can be discovered through four ways; aroused feelings, expressive behavior, motivated behavior and physiological changes. For a smart phone, the markets may use advertisement on the features that arouses the feelings of the consumer. This will create an excitement and thus the consumer will purchase the product. For an adventure holiday, the marketer would give a sanctuary for facilitation during the adventure. This will stimulate consumer behavior since there is an assurance in satisfaction and therefore they will inherit motivated behavior. Question 11 Explain the concept of an attitude to a person using language that a person not familiar with consumer behavior theory would clearly understand Language is one of the elements of communication that develops consumer’s attitude. For clear understanding of the marketing communication, elaboration model of persuasion will build consumer’s behavior to purchase the product. With this model, only consumer who is highly involved in the process will change both the attitude and behavior and there will external influence on the product. Question 12 Describe attitude change theories and their role in persuasion Attitude change theories convince the consumers to purchase products and services produced to the market. The main objective of these theories is to persuade consumers to change their attitudes towards the existing product or formulate new attitudes for the consumers. These theories play three different roles of affectivity, behavioral and cognitional roles. Behavioral role is when the marketers persuade consumers first without changing believes or attitudes on the product. Affective role is directed towards single attributes and may not necessarily be the results of cognitive thoughts. These beliefs are associated with feelings and are mental effectuations. Cognitional roles focus on the multi-attribute attitude of the consumer. Question 13 Describe the Elaboration Likelihood Model (ELM), including its components and explain how a social marketer might use ELM to persuade consumers not to engage in road rage. Elaboration Likelihood Model explains how attitudes are formed and held by consumers particularly from advertising efforts in the market. Advertisement believability takes a central route to persuasion in the market according to this model. Persuasion model has two routes, the central route and the peripheral route. Central route takes the order of high-involvement process, cognitive response, belief and attitude change and behavior change while peripheral route takes the order of low involvement process, belief change, behavior change and attitude change. In order to gain many customers, the social marketer should take the central route of persuasion in order to avoid consumers from engaging in a road temper. The marketer should highly involve the consumer in the process so as to get cognitive response from him. The response will be used to build advertisement believability which will change the consumer’s belief and attitude and later it will persuade the change of consumer behavior. Question 14 Explain the meaning of culture, how it is formed and some of its characteristics Culture is a social structure that comprises knowledge, behaviors, customs and technologies and it surrounds the consumers of all types. Culture is formed through the long term interaction of the social aspects in the society that will create a unitary lifestyle of the consumers in that society. Culture is characterized by language, nationality, education, religion, social class, family group and ethnicity. Culture permits the internal influences to consumer’s behavior. Therefore the self-concept of a consumer may be perceived in individualistic or collectivist that will make the international marketers to formulate new marketing strategies that will benefit the culture concerned. The interaction of the consumers worldwide will create a global culture and new marketing plans will perhaps be formulated. Question 15 Define culture and explain how culture provides meaning to objects and activities. Explain why domestic marketers study different cultures. Culture consist shared beliefs, morals, values and norms. Culture with tolerable values is usually Accepted and agreed upon. Therefore the objects (consumer, product and seller) will come into agreement together if the culture developed out of one or two values is totally acceptable by the three objects. Consequently, the activity for instance purchases in the cultural context needs a harmonized culture. Otherwise, without morals there will be no business at all. Question 16 Explain how culture shapes consumer value Consumer value is the difference between the total cost of acquiring the benefits and the benefits itself. Culture has morals that shape consumer’s self-concept, motivation, perception, attitude and choice. Therefore in the market, consumers are morally guided by these values in order to build high consumer value. Question 17 What functions can culture perform for consumers? Explain the concept of glocalization and give and example of how marketers can apply it Culture influences consumers’ behavior. For instance, a student in an institution will need to acquire learning materials in order to be accepted in the learning culture. Consumer may build a strong artifact towards a specific purchase. Glocalization is combination of two or more ideas to develop a product or service and distribute globally. Marketers can use this idea in diversifying their sales. For instance, marketers in one country can collaborate with those of another country such that they will be exchanging their products. Question 18 Explain the difference between cultural norms and cultural sanctions. In your explanation give details about how a Korean student studying in Australia might use cultural norms and sanctions to facilitate behavior in common consumer situations Cultural norms are specific values that dictate acceptable and unacceptable behaviors in a society. Cultural sanctions are specific values that are permitted with restrictions and should have to be scrutinized before it is endorsed. Culture is learned. Therefore student from Korea in Australia should learn the norms and sanctions for Australian context and try to adopt and use the so as to create that behavior which acceptable. Question 19 Explain the importance of word-of-mouth communications. Compare and contrast the role of an opinion leader versus a market maven in group influence and product adoption Word-of-moth communication creates room for persuasion, harmonized friendship, formalized agreement and market etiquette which lead to better decisions made by the consumers. This will build successful partnership as well as interaction among the consumers and between the consumers and marketers. Opinion leaders filter the information that affects consumers’ behavior and then provide the information to the members while a market maven provide information across all ranges/types of products and services available in the market. Question 20 Explain the three types of reference group influence and give an example of how each might work to impact on consumer behavior Informational reference group influence affects an individual purchase behavior. This occurs when an individual uses opinions of reference group members on purchases. For instance one may take a similar test in clothes. Identification reference group influence is where a consumer takes on perceived values of the group as a guide to its purchases. For instance a consumer purchases leather jacket because others perceive to be more durable. Normative reference group influence is where a considerable number of consumers agree upon a behavioral value thus influencing others. For instance may be in an institution, a significant number of students may decide to purchase leather jackets thus influencing others. Question 21 Discuss the effect that reference groups have on the consumption process As reference group influence increases, the degree of necessity of a product decreases hence reducing purchases in the consumption process. If an individual fully commit himself more to the group, the more he will conform the group norms hence increases purchases in the consumption process. If at all the group has an activity which attracts other consumers, the consumers on the other side will conform to the group values and thus increasing purchases in the consumption process. Individual confidence in the purchases process in the group will also increase purchases. Question 22 Describe the different types of reference groups that influence consumers and explain how reference groups influence value perceptions. Reference groups are classified according to four factors; 1. Membership: If one is a member or not. 2. Contacts: If one is very frequent to the group or not. 3. Attraction: One can be a member at the same time very frequent or be a no-member and less frequent or either mixed member. 4. Organization: Group may be extensive, specific or weak. Marketers apply advertisements that uses reference groups so as to gain benefaction from the consumers. Therefore advertisement will change value perception of the consumers in purchases. This will modify consumers’ behavior as well. Question 23 Reference groups tend to have informational influence, utilitarian influence and/or value-expressive influence. Explain each of the three types of influences that a reference group may have and in your answer provide an example to demonstrate your knowledge and understanding. Informational influence: Refer to ways in which consumers use behaviors and attitudes of reference groups as information in making their own decisions. For example a consumer is influenced by others to purchase a product they possess. E.g. a fashion cloth. Utilitarian influence: happens when the consumer obeys the group’s expectation so as to receive rewards or to avoid punishment. For instance a consumer chooses to buy a fashion cloth in order to be in the same culture. Value expressive: Consumers expresses their values or beliefs closely together in a joined group. In this case fashion clothes looks presentable and places on in a specific class hence boosting self-expression. Question 24 Using your own words provide a description, an explanation and an example that compares an aspirational group with a primary reference group. Aspiration group comprise of non-members with positive contact that are attracted to by the consumer behavior created within the group. For instance in a social class, non-members belonging to a group below may be attracted by the values and behaviors practiced. For this case they will be positively contacted to the group. Primary reference group is where members actively or frequently represent themselves hence they are well known. Members have a deliberate understanding together hence they are unified by a common value. Question 2 Give an example of how each type of reference group uses word-of-mouth communications to inform or persuade other consumers about a product, service or brand. Primary reference group directly influence general or broadly defined values e.g. an insurance company. Secondary reference group serves as a benchmark for specific or narrowly defined attitudes e.g. a football team. Aspirational reference group is the one which an individual aspires to belong e.g. IBM employee. Dissociative reference group is where there is no interaction between the consumer and the group e.g. Phones promotion. Formal reference group is where there is contact involvement in terms of positive or negative influence e.g. sports. Informal reference group is a group whose values and behaviors do not appeal to an individual e.g. boxing. Question 26 Explain how consumers’ moral beliefs and evaluations influence the choice to engage in consumer misbehavior. Moral beliefs play a vital role in ethical decision making and are consisted of moral equity, contractualism and relativism. Moral equity provides fairness and justness therefore act on the aspects of lie, cheating or stealing. Contractualism deals with issues that touch violation of law while relativism deals with issues of social acceptability. Thus this will lead a consumer to make a move on choice evaluation. A consumer can only act within their frame-of-reference about what they understand to be right. Question 27 Consumer misbehavior refers to behavior that violates generally accepted norms of conduct that may disrupt the normal flow of consumption activities. Some misbehavior activities maybe unethical, yet legal; and others may be illegal, yet considered as morally OK. Using your own words discuss how this can be the case. There are those misbehaviors that neglect moral laws but used by consumers to pose for their rights. For instance a consumer may unpleasantly complain to a seller for giving back the less money for a transaction. Other consumers will be disappointed out of that occasion in spite of the customer criticizing of his right. A speeding public vehicle may be considered morally ok but it is illegal. Consumers may be in this case late for their duties thus they need to arrive in time using a rushing vehicle. Other consumers in the same vehicle will feel offended but it is the case. Question 28 Explain how the Consumer Value Framework works when consumers are misbehaving at a sporting event Clubs, whose fans misbehave, should get a reprimand by denying points in their competition. This policy therefore will make the respective fans of clubs behave since they love their teams. The issues of life ban will also be a refuge to this misbehavior in the sporting competitions. Question 29 Describe the concept of retail borrowing and then explain why retail borrowing is considered consumer misbehavior Retail borrowing is act of returning goods after it has been used. This is considered consumer misbehavior since the consumers may at times be very abusive to retail staff; it may be because they have a genuine complaint on the product as they are taking them back. Question 30 Describe the concepts of moral equity, contractualism and relativism and explain each of these three (3) concepts play an important role in ethical decision-making Moral equity is beliefs concerning acts of fairness and just. Therefore any decision regarding consumer behavior should be fair and just to enhance harmonized culture. Contractualizations are values that are concerned with breaching of laws in the society. It guides behavior through morally accepted ways thus reducing the cases of law neglect by the consumers. Relativism refers to values concerning social acceptability of behavior in the society of consumers. Behaviors like fraud, cheating or stealing is socially unaccepted in a consumer’s culture thus relativism plays a vital role in doing away with these behaviors. Reference University of Southern Queensland, (2011). Consumer Behavior: Faculty Of Business Law, Australia: University Of Southern Queensland. Read More