Consumer Behavior Theories in Malaysia and Australia - Essay Example

CONSUMER BEHAVIOR THEORIES IN MALAYSIA AND AUSTRALIA By Student’s Name Code + Name of Course Institution City/State Professor Date Consumer Behavior Theories in Malaysia and Australia Consumer behavior theories potentially deal with the ways in which people act in their role as consumers. Schiffman’s Customer behavior theories are based on the consumer’s behavior in buying, with the consumer being the user, the payer, and the buyer. Presently, firms often focus their activities regarding consumers in the existing markets basing on the scope and the differing consumer needs. The consumer decision theory asserts that most consumers have a rational choice in decision-making (Schiffman & Kanuk 2000). Schiffman in this theory suggests that people’s attitudes are influenced by emotions or ration in purchasing goods. For the rational attitudes, consumers are aware of their actual needs. Emotions also affect people in a way when they randomly buy goods to release stress. People are influenced easily by other people in tastes and preferences (Schiffman & Kanuk 2000). In their definition of consumer behavior, Schiffman and Kanuk (2000) refer to consumer behavior as acts displayed by consumers while searching for, making purchases, using and disposal of services and products, which they expect will ultimately satisfy their needs. Consumer behavior usually involves how consumers think and feel when given different alternatives inproducts, brands as well as the actions they conduct in while in purchasing or during the consumption process (Schiffman & Kanuk 2000). Schiffman’s customer behavior theories can be addressed from an economic viewpoint. This perspective exclusively focuses on the purchasing act. Utility theory is the common model from this economic point of view. This theory suggests that customers often choose what to purchase basing on the results expected of what they have decided on. Thus, the users of commodities are seen as decision makers acting rationally while still showing a concern fortheir own individual interests in scenarios where the theory perceives them as ‘rational economically.’ Consumer Behaviors thus considers a number of factors, which have effect on them while acknowledging the vast consumption activities range beyond their purchasing power. Such activities include information search, need recognition, evaluation of alternatives, the purchasing acts, the building of an intention to purchase, consumption, and lastly disposal of the goods. Consumer behavior study is thus an interdisciplinary blending of elements from psychology, sociology,anthropology and economics as well as seeking for a comprehension of the processes of decision-formulation of consumers. A comparison of these two theories of consumer behavior as discussed in Schiffman applies to the Malaysian country in a number of ways. These ways will be subsequently compared and differentiated with the situation in Australia. It is evident that cultural dimensions do influence the customer’s styles of making decisions in consumer behaviors theories. The cultural decision-making styles by the consumers are strategically different in these two countries. Thus, the consumer’s decisions are different between these two nation states. The differences marked as seen between these two populations are so because of brand innovative consciousness, and choice confusion. The consumer decision-making styles therefore differ because of the cultural values of the consumers. It has previously been demonstrated that the styles for makingdecisions for goods differs in line with the consumers’ cultural orientation. Consumer behaviors between Malaysia and Australia are predicted from understanding the consumer’s cultural personality of the consumers. In the Malaysian scenario, the consumers behaviors are looked at on the basis the individual consumers characteristics including their behavioral and demographic variables, which are put into focus to understand better the consumers wants (Walters 1978). The consumer behavior is as such assessed based on the influences drawn on the consumers beginning fromtheir families, friends, and the whole society in general. Malaysia originally produced raw materials like timber, palm oil, rubber, petroleum, and tin. The country has many average middle-income individuals spreading within the multi-sector economy. The country lays greater focuson high-technology industries, medical technologies, as well as pharmaceuticals. Over 60% of the Malaysian population is considered as middle-income with a greater chunk of the Malaysians placing a strong education emphasis (Euromonitor International 2013). This is so because of the Government’s high subsidization in provision of primary and secondary education. The education consumer expenditure of Malaysia is growing at a fast rate i.e. from 1.2 billion in the year 2005 up to 1.7 billion US dollars in the year 2009. The Malaysian expenditure overview is such that with rising income, the way consumers spend on goods and services has shifted as well. In the traditional times, income expenses were primarily focused on food purchases. However, given the large chunk of the Malaysian youthful population now reside urban, independent and single lives. In fact, the younger Malaysians spend differently their salaries with more money being spent on ownership of cars, proactive health, leisure activities and in telecommunication e.g. cell phones and satellite televisions. On the other end, Australia in the recent years began experiencing changing and dynamicretail business environment (Preisless Consulting 2012). This included major changes in the trends of Consumer Behaviors. The small companies in the country have particularly grown to be more vulnerable to changes posed in this environment. These companies lack the resources to enable them to monitor change constantly. There has been growth in the Green Consumers. These consumers are responsible socially and environmentally. Most consumers in Australia are more loyal to their products and services compared to any other in the market and thus they are supportive to their own economic consumption (Toney 2008). There has also been a strong growth in digital consumption as well. The consumers have an easy and safe time in searching for product or services. Population Demographics between the two countries place Australia with a strong influence on online buying than Malaysia with their consumers being more informed about individual purchases. Consumer behavior involves how consumers when given different alternatives in products brands as well as the actions they conduct while in purchasing or in the consumption process (According to Stiffman). For Malaysia and Australia, the Consumer DecisionMaking Styles are quite different (Association of Consumers Research 2001). Previous studies have identified different ways of characterizing the consumer decisionmakingstyles. These include the consumer,lifestyleand consumer characteristics approaches. The consumer typology approach categorizes customers into categories, which are linked to patronage in the retail of commodities. These have emphasized on specific commodities, the categories of the commodities or the marketplace in retailing them in general. The lifestyle perspective seeks the attributes related to the customer’s behavior basing on personality characteristics, their needs and the customer’s general activities values, interests and lifestyles. The consumer approach emphasizes on the affective and cognitive decision-making and purchases of the consumers. This approach assumes that consumer’s affective and cognitive orientations determine the consumer’s styles of making purchases. These three approaches offer a unified theme under which theconsumers use basic decision-making styles in their approach to the market. Here consumer features in formulating decisions are measured through an assessment of the buyer styles in Malaysia and Australia. This decision making style is very much dependent on the two counties’ populations in terms of the quality, innovative/fashion, recreation and price conscience. Furthermore, the brand conscious, confusion due to over choice and impulsive conscience and brand loyalty are as well found to be dependent factors for purchases in these two countries. Decision making in terms of Brand consciousness refers to the orientation of the consumers to the purchases of costly or well-known products. Two dimensions lay relevance for this style of decision making i.e. uncertainty avoidance and individualism/collectivism. Certain brands are usually regarded as status and prestige symbols especially in the Eastern cultures in the Asia pacific Region. Malaysia is included in this group. By having a high power distance, the perceiving of prestige and social status are regarded as important. Most Eastern cultures are of higher collectivism and power distance. Malaysians are particularly linked with the ‘face social harmony.’ Most users here possess a vast need inmaintenance of social status and prestige. Their level of brand conscious in making decisions is thus higher. Following this argument line, it is likely that Malaysians would be moreconscious of the brands they purchase than the Australians are. However, these brands are utilized in conveyance of fashion consciousness for the individual cultures. Brands are thus symbols for conveying various meanings to consumers. A number of brands like BMW convey prestige and quality meanings. Some brands however are related to relatively low pricing e.g. the Virgin Airlines. Some product brands assist the consumers in the effort to minimizing effort and provision of a sense in familiarity in commodities. This reduces the purchasing risks involved as well drawing an appeal to consumers with high uncertainty avoidance (Palumbo & Herbig 2000). Uncertainty avoidance in Australia is high compared to Malaysia. This makes us to hypothesize a prediction of the Australiansas being more innovative than Malaysians based on the heritageof their culture. Low uncertainty avoidance by the Malaysians versus the high score by Australians contradicts the behavior expected of Eastern consumers. Low uncertainty avoidance levels thus facilitate new product development phase. The perspective of the new product expansion together with Malaysia’s distinctive uncertainty avoidance level that is low posits that Malaysian consumers accept being innovative. Being in the Asia Pacific region (as one of the Asian countries), Malaysia’s economic engagements has always laid a high basis on technology adoption. The governments in these regions strategies focus on pushing for advanced technology as well as skill development related to these. Among the Western states, Australia is seen as a unique country in terms of its traditional economic activities. The country is abundant in natural resources. Its economy depends on revenue generated from production of raw materials. Most Australians have high individualism trends and they are long-term orientated individuals. These are the traits of their culture. Furthermore, the Australians are seen to be averse of risks with a higher uncertainty avoidance (Tony 2008). We can therefore reasonably posit that because of the Malaysians lowuncertainty avoidance level, coupled with their governments’ joint polices of economic development in the Asia Pacific region, the Malaysian customers are likely to be more focused and innovative in arriving at decisions on purchases and use of commodities and services. Consumer’s behavior is also determined by the level of income of the consumers. The consumers are thus ‘Price conscious’ which is definedas consumer’s objection to paying a price which is higher for a given commodity or a focus exclusively for paying a lower amount for a certain commodity. Just like in the process of making a decision for the brand conscious, price conscious expects the collectivist cultures to be concerned more with status associated with given brands and more sensitivity to maintaining status and prestige. Given that, most western cultures are masculine orientated; they place their emphasis on their egogoals of money and careers price-consciousness in makingpurchasing decisions. This suggests that goods are purchased for lower amounts and therefore, many commodities can be accumulated. Erasmu and Boshoff (2001) similarly suggested that Eastern consumers possess a low price limit for value when compared to the Western customers. Basing on the pricing, the Australians are poised to exhibit values, which are higher than the Malaysians in line with this are. Because the amount on commodities signifies quality, and that good’s quality is expected to be more relevant toMalaysians than Australians, it is proposed that, a difference in the conscience on prices between Australians and Malaysians will significantly result in the Australians being highly expected to be extraprice conscious. Occupation of the Malaysians or Australians would likely result in a consumer behavior in their purchases. However, with the recreation conscious, the approach towards a purchasing decision is perceived insignificant. Recreation conscious can refer to a hedonistic shopping extent in which shopping is regarded a pleasurable as well as fun experience. The two are embodied states that are not likely to be influenced cultural display rules. Here, display rules are the prescribed norms for nonverbal as well as the verbal displays. Individuals modify their respective expressions basing on the cultural exhibit rules. This means that the cultural exhibit rules are norms set by the society for the verbal as well as nonverbal expressions. In this regard, culture ought not to be of influence to the experienced pleasure during shopping but as a pursued kind of shopping. This means that, distinctions betweenMalaysian and the Australian cultures cannot be predicted for this level. There is thus no significant distinction in the recreation consciousness between Malaysians and Australians. Malaysia’s main exports includes electrical and electronics products (forming 35% of its total exports), palm oil (at 15 %), petroleum products (at 9 %), liquefied natural gas at 7 % and natural rubber and timber. Malaysia also exports abroad machinery, chemicals, appliances and manufactured metals. From this trend, we hypothetically say that food production for export and local use is low. The Australian state can play as Malaysia’s potential food source. According to the latest ABARE report, Australia can sustain the food consumption and the demand for inputs in food processing industries of Malaysia (Farm Point 2008). The continued income levels and population growth is slowly shifting the Malaysian food consumption from starchy staples like rice and cassava towards wheat-based products like breads, dairy products, seafood, bakery products, meat, fruit and vegetables. With this limited production in the domestic sphere of agricultural products, the expected increasing food demand is to be catered for by imports. Australia happens to be the leading exporter of agricultural products to Malaysia. Based on the consumer behavior patterns and consumptions in Malaysia, the key markets by Australian exporters to Malaysia would target food products, which in this case are not produced by Malaysia. Their consumer consumptionand production trends are based on prestige and class especially in technology products. From Australia sugar, wheat and dairy products are exported. The industry for food processing in Malaysia is expanding, with vast importation of intermediate inputs e.g.wheat and sugar used in bakeries and confectionaries and the use of meat in producing halal products provides opportunities for export by Australia. In conclusion, Schiffman’s Customer behavior theories are based on the consumer’s behavior in buying, with the consumer being the user, the payer, and the buyer. Consumer behavior usually involves how consumers think and feel when given different alternatives in products, brands as well as the actions they conduct in while in purchasing or during the consumption process. This decision-making style about purchasing commodities is very much dependent on the two counties’ populations in terms of the quality , fashion , recreation , price, brand conscience and consumer’s loyalty to brands. The Australian state can play as Malaysia’s potential food source. Exporters are likely to get a ready market for food products in the Malaysian market. Reference List Trading Economics, Malaysia Exports/ Latest data/ Forecast News, Available from http://www.tradingeconomics.com/malaysia/exports [22 May 2013] Preisless Consulting, Australian Consumer Behaviour and Trends, Available from . 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