Consumers' Decision Making Process - Case Study Example

THE CONSUMER BEHAVIOR Name: Course Instructor’s name Institution Date The Consumer Behavior Introduction Consumer decision-making and consumer behavior are common topics in several fields in the recent years. The concept is complicated because of the external influences that have to be handled internally. Consumer behavior focuses on consumption behavior in which the humane aspect of purchasing and decision-making is significant than the buyer behavior. Consumer behavior is the domain of the marketing and professionals who wish to comprehend customer behavior (Schiffman & Kanuk 2005). Consumer decision-making models are often used in consumer behavior studies to structure them. Consumer behavior involves considerations of reasons that are personal, psychological, situational and social that influence people’s shopping, as well as use and disposal of the products. The consumer behavior literature has many views on consumer decision-making processes. Some of the perspectives include the ‘value perspective,’ ‘emotional perspective,’ the ‘information processing’ and ‘cue utilization theory.’ The current paper integrates several perspectives and hypothesizes links of basic constructs related to decision-making. The consumer decision-making studies were begun in about 300 years ago being led by Nicholas B., Oska Morngenstern, and John Neumann Von. They examined the fundamentals of consumer decision-making as illustrated by Richarme (2007). These early works approached the topic from economic perspectives and mainly focused on purchasing processes and motivation. Utility theory model was often used in the perspective’s explanations. The model pointed that consumers are willing to make a purchase basing their reasons on expected outcomes of the decision made. The buyers were seen to be concerned with self-interest (Schiffman and Kanuk 2007). The contemporary consumer behavior research views a full range factor that influence consumer and acknowledges consumption activities that are beyond purchasing. Some of these activities include need recognitions, the evaluations of alternatives, the search for information, purchase intention creation, purchasing act and product disposal. The contemporary approach that is considered complete sees the consumer behavior to be evolved through discernible stages over the past century. It was since 1950s that consumer behavior responded to modern marketing (Blackwell, Miniard et al. 2001). Objectives of the study Various consumer decision-making perspectives differ in many dimensions like risk reduction cognitive and effective activities and trade-offs as well as evaluations. The views have been found to be complementary. The paper suggests and considers a framework concept that integrates several aspects from affective and cognitive perspectives. Based on the current framework, the aim of this paper is evaluating the context of consumer decision-making and consumer behavior. The paper aims to review the views that affect the choices made buy the buyers in regard to product selection. The perspective is considered basing the argument on the above model. The other aim of the current paper is to conduct an empirical investigation that will test the above framework. Sample profile The current paper focuses on the apple product and its context in the whole process of consumer decision-making. Apple Inc factors all the processes of consumer decision making in its marketing strategy. The recognition of the process has allowed Apple Inc to make a lot of sales with customers making millions of purchases yearly. The company has seen its revenue increase to billions of dollars (Perreau, 2013). Apples’ consumers have been found to use a combination of decision-making strategies. For example, eliminating other product alternatives based on the country origin depending on the consumer’s belief in the country’s quality (the theory of cue utilization). Also, a buyers like the product just because it gives a good feeling especially by looking at the product (a perspective that may be viewed as emotional). The positive emotions have contributed to the buyer’s desire to buy Apple products and unwilling to make a direct purchase of its competitors’ products. they have limited the alternatives where information is searched (information processing perspective). Finally, a consumers often access trade-offs (value perspective) for several alternatives and use the trade-offs as input for Apple’s product comparison. Importance of consumer behavior It is significant to understand what the buyers want. Consumer behavior is the only way to optimize the marketing ROI in a structured manner. Understanding the behavior and the preferences of the consumers through gathering information and continuously acting upon the customers increases loyalty and profits. Market optimization involves people, emotions, simplicity, experiences, frictionless fulfillment and continuity. Customer behavior shows marketing interactions and task completion. Customers are very crucial to marketers making them the key concern. Understanding consumers behavior means understanding how and why people make purchasing choices. Understanding consumer decision-making process is critical in formulating a marketing plan that determines the success of the whole organization. Understanding various market segments assists in determining potential buyers who favorably behave into the company and its products. The consumer behavior is of importance to marketers as they shape the fortunes of their organization as it is used for regulation of the consumption of goods hence maintaining the economic stability. The knowledge is important in making decisions that are related to environmentally friendly products. The study gives information about design, color, and size that the consumer want which helps in formulating policies that are related to product production. Basic model of consumer influence The consumer decision-making model is also called the Engel-Blackwell-Miniard that was formed in 1968 by Kollat, Blackwell and Engel. The model has undergone various transitions and revisions since its development. The many model elements are seen to be similar to the ones presented in Howard and Sheth (1969) theory of buyer behavior. The model is built around a seven-point process. These decision processes include need recognition that is followed by information search in its internal and external contexts. Another stage is an evaluation of alternatives, purchase, post-purchase reflections as well as divestment. The above decisions are affected by two factors. First, stimulus is received by the consumer for processing through experiences and memories collaborations. Second are environment and external variables that influence one’s decisions (Blackwell, 2001). The environmental influences identify the culture, personal influence, social class, family, and situation. The individual factors include involvement, personality, values, motivation, consumer resources, attitudes, knowledge, and lifestyle (Miniard et al., 2001). Many attempts to build the models that combine the complexity of consumer behavior have been made so far. According Blackwell (2001), the most common model used in the choice process is CDP-model. The model has been updated regularly since its 1968 version. The CDP model sees consumer behavior as a problem-solving act that involves need recognitions, evaluations, information search, purchasing act and post-purchase evaluations. The theory strongly emphasizes on cognitive nature, especially memory factors and information processing (Dubois, 2000). The model is criticized to be appropriate in describing consumer behaviors as well as being too cognitive. It shows how consumers react to emotions and how they respond to the stimuli in order to make a purchase. The CDP model’s five steps are similar to Howard and Sheth model of 1969 that is also considered to be a cognitive theory (Dubois, 2000). Howard and Sheth theory is understandable and is often used as a reference point when generating consumer hypotheses in the consumer decision-making study and consumer behavior study instead of predicting a particular customer behavior. The reasoned action model and the theories of planned behavior reflect on modeling the buyer’s decision-making (Fishbein & Ajzen, 1975). Although the above theories have been used in many studies, they do not involve and evaluation of the emotional perspective. Zeitham (1988) developed a model that linked internet and external products to perceived consequences. The perceived effects e.g. color, ingredient, price, advertising, quality and value affect purchasing intentions. Zeithaml’s model attempts to incorporate the value perspective theory and cue utilization theory into the means-end theory. However, the theory does not illustrate how buyers’ involvement level may change the process of decision-making. Also, the model does not explain how buyers respond emotionally to the decision-making features and situations. Although many views on buyers’ decision-making are seen to exist in consumer behavior literature, attempts to combine them are very few. Thus, they reflect on most suggestions that customers apply many models while making a product decision. Model entry is often done via need recognition especially when the customer acknowledges discrepancies between the desired product and the current product state. The process is influenced by the interactions among environmental, individual variable and processed stimuli inputs. The consumer embarks on information searching internally in consumer memory bank of the former experience and externally after need acknowledgment. The model is suitable to use when explaining small problem-solving as well as extended ones. The explanation is done by modifying the degree through which various stages are involved by the customers (Loudon & Della Bitta, 1993). The information search depths are highly dependent on problem-solving nature of sophisticated consumption issues subjected to wide external searches. Simple problem issues depend on simplified internal searches of the former behavior. Information passes through five stages before storage and use. The five steps include exposure, attention, understanding, acceptance as well as retention (Miniard et al., 2001). The alternative consumer choices are often evaluated by the establishment of purchase intentions, beliefs, and attitudes. Evaluation processes are influenced by individual and environmental variables. The intentions are direct antecedents of purchasing that are the outcomes that are to be tolerated by the theory. The inhibiting factors are not selected as mediation between purchase and plans. The individual and environmental variables influence purchase. The situation is one of the environmental influences that include the factors like financial and pressure constraints that serve as an inhibitor to consumer realization of the purchasing decisions (VanTonder, 2003). Consumptions are often followed by post-consumption evaluations that serve as feedback functions of the external future searches. Divestment has been seen as a last stage in the consumption process that acknowledges that the products are to be thrown away after consumption. Factors affecting the buyer behavior There are various factors that are explained within that affects consumer decision-making. These factors are categorized into situational factors, personal factors, psychological factors, and societal factors. Situational factors These are temporary situations that affect the consumers’ behavior involving whether or not to buy a given product or any additional product. Situational factors include conditions such as social, physical, time, and the reasons for the buyers’ mood and purchasing motivations.. Professional marketers take physical factors like store design and layout seriously when developing them. Store locations are good examples that are considered when building up business facilities. Research shows that customers stay in the store longer enough to buy services and products as a result of strategic fragrance (Jacob & Giulia, 2009). Personal factors Consumer’s personality describes the disposition of a person as seen by others. It involves openness, conscientiousness, extraversion, agreeableness and neuroticism. The connection between the people’s purchasing behavior and personalities may be unclear, but studies continue to be done in an attempt to shade light. Some studies have found out that people who are open respond well to adverts. Consumer’s self-concept is believed by market researchers that people buy to enhance their feelings and get closer to ideal selves. For example, many beauty products are promoted in a way that appeal to people’s ideals. Consumer’s age determines the type of things to be purchased. Cognitive age of an individual impacts the activities that the person is engaged in and sparks the perceived age. It affects behaviors such as dining out, going to bars and dance among other consumer behaviors (Anna & Jochen, 2008). Psychological factors Psychologist Abraham Maslow presented a theory that proposed that people have to fulfill basic needs before they fulfill secondary needs and other high-level needs. The perception represents how one interprets the world around him or her and how one makes sense of the surrounding. The companies then make sure that advertisements get to the target audience through repetition. Other methods include shocking advertisements and subliminal adverts. Learning presents a process by which buyers change their behaviors after they have gained information pertained to the given products. The attitudes of the consumers are often enduring and difficult to change (Andrea, 2010). Societal factors Culture is a universal factor that influences consumer behavior. Culture prescribes the way consumers live and affects the things that are often purchased. Buyers in the same level of class often show same purchasing behaviors. Most studies consider the consumers’ families to be the largest determinants of purchasing behaviors. The reference groups are desired, and consumers want to join and be identified with hence the tendency of companies using celebrities in their product promotions. Consumers have been found to respect opinion leaders and often consult their opinions before making a purchase (Jonathan, 2009). Marketing Implication The marketing implications in this paper are describes as follows. The managers need to intensively cope with the buyers’ decision-making investigations. The process of may involve several constructs and perspectives making the decision-making among customers a complex issue. Therefore, management and marketers need seek the development of its target audience’s behavior competence. Consumer behavior competence is more needed than ever before as the environment is also becoming more complex. The paper has shown that consumers use the prices as an indication of the products quality although the finding is not universally acceptable (Lombardo, n.d.). The paper implies that there is a need for all the marketers to create awareness of need recognition. The first step in the process of decision-making is when the consumer realizes that he/she needs something. Marketers want to build an imbalance in consumers between the preferred status and the present status. The imbalance then creates a need that forces consumers to search out for a product or a service in order to make a purchase. Need recognition often occurs where the consumer faces different actual and desired demands. A need occurs immediately and becomes a basic impulse in one’s experience of pain development. The instant desire is also called internal stimulus that can also be a change in the person’s lifestyle. The paper also has the implication of external stimuli often experienced when people are affected by outside influences. The key weapon for a marketer in regard to external stimuli is to create an imbalance or a consumer need through the use of advertisement and the sales of various components. When a consumer recognizes an unfulfilling need and a product that will probably satisfy the need, the market has created a want for the consumer, the marketer should then tailor the new product as well as the current product so as to reach the consumer and create a successful purchase (Hewer and Brownlie, 2010). The paper has shown three ways through which the consumers recognize unfulfilling wants. The first method is when the consumer gets frustrated with the fact that the service or the product purchased is not performing properly. Another way is when the consumer runs out of the product. The marketers can make the buyers make purchases through coupons, contests, promotions, and deals. The last way is when the consumers become aware of the product that is considered to be better than the current product. Marketers should then create newer versions of products to tempt the buyers (Lombardo, n.d.). After the consumers develop needs and want, they start information search about the alternatives that they can purchase to satisfy the needs. The consumer looks for internal and external information to help make a decision. The search often begins with asking friends and family members about the importance of the product. They can as well research on public sources and other marketing controlled sources like radio, TV and brochures. The time taken for searching depends on the past experiences and culture of the person that is followed by an evoked set that is the most preferred product to buy. Conclusion and future studies Consumer behavior originated in late 1960s with many of its theories based on economic theories that presumed that consumers behave rationally to maximize satisfaction in their purchases. Those early theories are still applicable to the current research structures in the field of consumer sciences especially consumer behavior. The current paper has discussed various approaches to modeling the consumer decision-making processes. It first evaluated a history of consumer decision-making model. It then related the earlier version with the current contemporary and evolved version. The area has been shown to be an ongoing and dynamic research that is expected to have new insights and approaches that are not yet explored. The paper has ignored the role of ethics, altruism and social responsibility within its model and reviewed theories. The paper suggests that the combination of perspectives will integrate various considerations that may make the model more valuable than when the models are used independently. The overview of the consumer decision-making model illustrated here highlights a complex state of the buyer’s choice and identifies significant processes that results in difference consumer behaviors. Various variables have been explored across the consumer decision-making process model each giving evidence in justification of behavior explanations. It is difficult for an individual to model a claim that includes all factors that influence the customer decision-making. However, the conceptual framework and model proposed and adopted in the current paper reflected the work of philosophical approaches. The conceptual framework attempted to provide an understanding perception of the buyer’s product choices. Much of the work remains uncovered by the current work. The project has avoided many knowledge and theoretical perspectives that construct the consumer decision-making process. The interplay between a cognitive skill and consumers affective has not been discussed. The future research that is recommended includes the examination of other variables that moderate the involvement and emotional as well as the relationship between emotion and quality. The research should then look at the extent to which the reduced relations of the product are considered. Further studies should also evaluate emotions types that affect cognitive-affective interplay. The studies should evaluate the framework for buyer segmentation and its sensitivity construction. References Ajzen, I. (1991), The Theory of Planned Behavior, Organizational Behavior and Human Decision Processes, 50, pp. 179-211. Andrea J. (2010). New Programs Are Taking Worries from Home Buying, Fort Worth Star-Telegram, 1C–2C. Anna S. & Jochen W., (2008). The Role of Store Environmental Stimulation and Social Factors on Impulse Purchasing, Journal of Services Marketing 22, no. 7 (2008): 562–67. Ehrenberg, A. (1988), Repeat Buying: Theory and Applications, 2 nd edition, London: Griffin and Co. Hewer, P. and Brownlie, D. (2010) On market forces and adjustments: acknowledging customer creativity through the aesthetics of debadging. Journal of Marketing Management 26 (5&6): 428–40. Howard, J. and Sheth, J. (1968), A Theory of Buying Behavior, in H.H. Kassarjian and T.S. Robertson (eds.), Perspectives in Consumer Behavior (Scott, Foresman: 1968), pp. 467-487. Jacob H. & Giulia M., (2009). Synchrony Effects on Customers’ Responses and Behaviors, International Journal of Research in Marketing 26, no. 1: 34–40. Jonathan B., (2009). Wal-Mart Looks to Hispanic Market in Expansion Drive, Financial Times, No. 18. Lombardo, J. (n.d.). Understanding the Consumer Decision-Making Process: A Marketing Must - Video & Lesson Transcript | Study.com. [online] Study.com. Available at: http://study.com/academy/lesson/understanding-the-consumer-decision-making-process-a-marketing-must.html [Accessed 5 May 2015]. Perreau, F. (2013). The 5 stages of Consumer Buying Decision Process. [online] Theconsumerfactor.com. Available at: http://theconsumerfactor.com/en/5-stages-consumer-buying-decision-process/ [Accessed 10 May 2015]. Schiffman, L. G., et al., 2007. Consumer Behavior. 9th ed. New Jersey: Prentice Hall. Weber, E.U., Blais, A-R., and Tada, Y. (1998), From Shakespeare to Spielberg: Predicitng Selection among Modes of Decision Making, paper presented at the expanded version of the presidential adress by Elke Weber, delivered at 1998 annual meeting of the Society for Judgment and Decision Making, Dallas. Read More