Consumer Behaviour Models: A Theoretical and Practical Approach

1      Introduction

Consumer decision-making is defined as the behaviour patterns of consumers that precede, determine and follow the decision making process for the acquisition of need satisfying products, ideas or services (Du Plessis & Rousseau, 1999). During the consumer decision-making process, not only do consumers make decisions regarding which brand options to choose but they also decide what quantity of the good to purchase. Consumers make decisions in order to reach their goals, which include making the best choice among alternative possibilities, reducing the effort in making the decision, minimizing negative emotions, and maximizing the ability to justify the decision. In summary, consumer decision-making is a constructive process (Mowen & Minor, 2006).

With the above stated definition of consumer decision-making in mind, this report will investigate the consumer behaviour construct for the purposes of articulating a consumer decision-making model.  In so doing, the report will critically discuss the influence of internal factors, such as perception and motivation, on consumer behaviour and, importantly, discuss the ways and means by which consumer behaviour principles can be used as a conceptual framework to help managers understand and solve marketing problems.  Following a review of the scholarly literature on the aforementioned issues, the report will report on the results of a survey which focused on consumer buying behaviour in relation to remedial massage therapy.  Four respondents were involved in this study.

2      The Consumer Behaviour Construct

This section of the report focuses on the review of the literature on consumer behaviour.  Consumer decision making models, consumer decision-making styles and consumer perceptions are explored in this section.

2.1    Consumer Decision Making Models

Some of the best-known consumer decision-making models were developed in the 1960s and 1970s. Howard developed the first consumer decision-making model in 1963 (Howard, 2005). Others included the 1969 Howard model (Howard, 2005) and the 1990, Blackwell, and Miniard model (Engel, Blackwell, and Miniard, 2007). Those consumer decision-making models that are still used today reflect consumer decision process in terms of the interrelationship of concepts and the flow of activities.  The most widely used consumer decision-making theory includes these five steps as defined by Mowen and Minor (2006): recognizing problems, searching for solutions, evaluating alternatives, choosing among options, and evaluating the outcomes of the choice.

In addition to the five steps in the consumer decision-making process, some researchers prefer to add one or more stages to place importance on certain activities. Take as an example, Engel, Blackwell, and Miniard (2007) who discussed a different model for the consumer decision-making process, the Consumer Decision Process (CDP) model. The CDP model represents a roadmap of consumers’ minds that marketers can use to help guide product mix, communication, and sales strategies. The seven stages in the consumers’ decision-making process according to the CDP model include: need recognition, search for information, pre-purchase evaluation of alternatives, purchase, consumption, post-consumption evaluation, and divestment. The model places more emphasis on the cognitive aspects of buying behavior than before. The CDP model shows how people solve the everyday problems in life that cause them to buy and use products of all kinds.

Later, the Engel, Blackwell, and Miniard (2007) CDP model was renamed the (EBM) model to acknowledge the work of Professor Paul Miniard. The EBM Model was one of the most important consumer decision-making process models. The EBM model was an attempt to show that consumers will make a purchase decision based upon seven steps. These steps were need recognition, information searching, pre-purchase alternative evaluation, purchase, consumption, post-purchase alternative evaluation, and divestment. Today, consumer behavior and consumer decision-making have become prominent research topics in various fields of consumer science. The advantages offered by decision-making models include the possibility to grasp visually what happens as variables and circumstances change. Moreover, consumer decision-making models also provide conceptual frames of reference that logically indicate the interrelationship of variables for research purposes and the possibility to understand different consumer decision processes and marketing strategies (Engel, Blackwell, & Miniard, 2007).

2.2    Consumer Decision-Making Styles

Consumer decision-making styles are clearly important in order for marketers to understand consumer purchasing behavior. Olshavsky (1985) discussed the idea that in order to understand consumer behavior in purchasing products, it would be necessary to integrate two separate streams of research. The first is that in which a consumer’s preference for an alternative good is based upon the perception of product quality, as defined by extrinsic factors. The second stream of research is a consumer’s preference for an alternative that is based upon some kind of evaluation process or decision-making process, defined by intrinsic factors. Combining intrinsic and extrinsic factors can give researchers and marketing practitioners a better understanding of consumer purchasing behavior.

Identifying basic characteristics of decision-making styles is central to consumer-interest studies. When businesses attempt to predict the chances of success for products and services, it is important to understand how consumers make their decision. The Consumer Styles Inventory (CSI) was first developed by Sproles and Kendall (1986) and defined as mental orientation characterizing a consumer’s approach in making consumer choices. There are eight mental characteristics of the consumer decision-making style in the CSI. These characteristics are (a) the perfectionist and high-quality conscious consumer, (b) brand conscious and price-equals-quality consumer, (c) novelty, fashion conscious consumer, (d) recreational, hedonistic consumer, (e) price conscious consumer, (f) confused by over choice consumer, (g) impulsive and careless consumer, and (h) habitual, brand-loyal consumer.

In 1992, Hafstrom, Chae, and Chung continued the work and generalized the research across the country. The purpose of the research was to identify decision-making styles of young consumers in Korea and to find out if these styles were similar to those of young U.S consumers. The research indicated that decision-making is more complex and even more important for consumers today than in the past. However, the finding of this research also indicated that there was reason for cautious optimism because the CSI has elements of construct validity and has potential use across international populations. Moreover, the research conducted by Durvasula, Lysonski, and Andrews (1993) indicated that consumer affairs specialists should not assume that instruments validated in the United States are immediately applicable to other countries. Researchers were encouraged to develop a more robust decision-making style inventory to account for the variation in findings as reported in their study.

The study, conducted by Walsh, Mitchell, and Thurau (2001) tested the generalizability of consumer decision-making styles in different countries and with non-student samples, prompted an investigation of German shoppers. The study showed that the original U.S. eight-factor model could not be confirmed completely, but support was found for six factors. These elements included brand consciousness, perfectionism, recreationalism/hedonism, confusion by over choice, impulsiveness, and novelty-fashion consciousness.

After fifteen years of research on CSI, a study by Walsh, Thurau, Mitchell, and Wiedmann (2001) led them to suggest that researchers and practitioners use the consumer decision-making styles model as a basis for market segmentation. This study indicated that understanding consumers’ buying-related decision-making behavior is important for companies in designing effective strategies for marketing activities. Consumer decision-making styles are relatively stable over time and determine the consumer’s purchasing behavior. To use consumer decision-making styles as the basis for market segmentation is a new trend in marketing research. The applicability of the CSI has been investigated across several cultures by several authors and replications have been carried out in South Korea, New Zealand, Great Britain, Germany, Hung Kong, United State, and China. The original structure of decision-making styles, by and large, was confirmed in all seven countries.

2.3    Consumers’ Perception

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Teas and Agarwal (2000, 2001) indicated that consumers use extrinsic cues to infer product quality. The role of extrinsic product cues is important for marketers and scholars to enhance consumers’ perceptions of product value and willingness to purchase. Perception refers to the manner in which a person selects, organizes, and interprets the stimuli to which he or she is exposed (Reibstein, 2005). In other words, each day our senses are bombarded with stimuli in the form of sights, smells, sounds, tastes and so on. Meaning is assigned to the stimuli according to the individual’s beliefs and feelings. This is stimulus interpretation (Schutte & Ciarlante, 2007). Consumers are influenced by their perceptions of a product when they make a purchase.  Furthermore, Reibstein (2005) found that the two aspects of perception that have been identified as being of particular importance to marketers are perceptions of price and perceived risk.

Consumers often judge the quality of a product or service on the basis of a variety of informational cues associated with the product. According to Schiffman and Kanuk (2004), consumers perceived the quality of products by using the physical characteristics of the product itself, such as size, color, flavor, or aroma. In the absence of any actual experience with a product, consumers often evaluate quality based on its external elements, such as price, and the image of the store carrying the product.

There are several researchers who have developed and tested models of consumers’ perceptions of value with particular emphasis on consumers’ use of extrinsic cues (such as price, product quality, and brand names) as indicators of quality and value (Dawar & Parker, 1996; Dodds & Monroe, 1985; Teas & Agarwal, 2000; Zeithaml, 1988). Dodds, Monroe, and Greawal (1991) specified a model in which perceived quality and perceived sacrifice mediate the linkage between extrinsic cues (brand name, store name, and price) and perceived value. Moreover, they suggested that these three extrinsic cues are associated with quality and value perceptions. Dodds et al. (1991) also added another extrinsic cue, which is country of origin. In their study, consumer perceptions of value are used as a trade-off between perceived quality and perceived sacrifice that results in a positive linkage between perceived quality and perceived value. At the same time, this trade-off led to a negative linkage between perceived sacrifice and perceived value. These results were similar to the studies by Hauser and Urban (1986) and Zeithaml (1988). Both studies suggested that perceived quality mediates the linkages between extrinsic cues and perceived value; while perceived sacrifice mediates the linkage between price and perceived value.

Mowen and Minor (2006) indicated that consumers’ perceived quality and perceived price combine together to influence the perceived value of a brand. Thus, the perceived value can be defined as the trade-off that consumers make between perceived quality and perceived price when evaluating a brand. On the other hand, there are several researchers, who developed models to explain how perceived risk is important to consumers’ willingness to purchase products. Perceived risk is defined as a consumers’ perception of the overall negativity of a course of action based on an assessment of the possible negative outcomes and of the likelihood that those outcomes will occur (Dowling, 1986). Dowling and Staelin (1994) indicated consumers’ perceptions of risk are considered to be central to their evaluations, choice, and behaviors. So consumer researchers have defined perceived risk in terms of uncertainty and consequences; perceived risk increases with higher levels of uncertainty and the chances of greater association with negative consequences (Oglethorpe & Monroe, 1994).

In 2001, Teas and Aganval proposed an integrated model based on past studies and reported the results of two experiments designed to test the role of perceived quality, perceived sacrifice, and perceived risks on consumers’ perceptions of product value. The results of their study indicated that perceived performance risk and financial risk mediated the relationships that perceived quality and perceived sacrifice have with perceived value. The model can make it possible to effectively examine the consumers’ perception on product value within a high-risk market.

3      Practical Application

As argued through the foregoing review of theoretical and empirical studies, the consumer decision making process is a complex one.  The process is informed and influenced by multiple factors, including subjective consumer perceptions of a brand/service, the consumer/decision-maker’s character and individual personality and the extent to which consumers have recognised their need for a specific good/service.  The implication here is that numerous variables affect the decision making process and it is imperative for marketers to understand which of these has the greater influence on the purchase decision so that they may address it in their campaigns.  Proceeding from a recognition of the imperatives of identifying the most influential of the variables in question, the researcher formulated a decision-making matrix, explained below.

In accordance to the formulated decision-making matrix, the purchase decision begins with the recognition of a need, following which, consumer personality determines the response or the approach to buying which the individual will adhere to.  If the person in question is impetuous, s/he will clearly choose the first option available for the satisfaction of the identified need and if s/he is a brand-conscious shopper, s/he will likely decide to purchase the most reputable of the available brands.  If, on the other hand, the consumer is price and quality conscious, s/he is likely to be a finicky customer who will engage in comparison shopping, comparing the price and quality of substitute products/services against one another prior to making a decision.  The decision-making matrix, therefore, is comprised of the following variables:

Recognition of need: This refers to whether or not the consumer has identified a need for a specific product/service
Strength of need:  Assuming recognition of need, this refers to consumer perceptions of the strength of their need for a specific product/service
Consumer personality:  Needless to say, consumer personality will influence their decision-making process and the outcome of the process.  Within the parameters of this matrix, the following consumer characteristics are important: Price and quality conscious
Brand conscious
Impetuous

Consumer perception of the service/product offered:  When choosing between substitutes, consumers cognitively process the information available to them regarding each of these substitutes and, as such, subjectively react to the product/services in question.  The implication here is that consumer perception of a product is an individualised and subjective evaluation of a product/service.
Consumer’s socio-economic status:  Socio-economic status undoubtedly factors into the decision-making process on several levels.  A consumer’s social class and education reflects the range of his experiences and his/her income level is a good indicator of both the quality accustomed to and the weight given to the price factor.
Consumer’s age:  Consumer’s age is important as, based on the literature reviewed, the younger the consumer, the more attracted s/he is to innovative products/services and the more impulsive s/he is when making the purchase decision.
External influences upon consumer:   Consumer may be subjected to external influences in the form of the advice of family and friends.  This should be considered when trying to account for consumer purchase choices.

Based on the above variables, four respondents were interviewed for this study.  All four respondents had been advised to undergo a remedial massage therapy program for physical reasons.  In one case, joint stiffness was the complaint; in another it was a slipped disc; in the third it was general muscular complaints; and in the last, it the complaint pertained to a sports injury.  In order to access these respondents, the researcher went through the Yellow Pages, looking for certified massage therapists.  Three therapists, all in the same district were selected.  The researcher went to these therapists and explained the purposes of the research study in order to obtain permission to interview patients.  Only one of the massage therapists agreed, on the condition that both he and his patients remain anonymous and that no personal identifying information be collected from the patients.  Of course, the consent of patients was a condition.

The researcher deliberately selected the participants, on the basis of gender and age.  Two women and two men were chosen.  One of these women fell into the 25-35 age group and the other into the 46-60 age group.  The same applies to the male participants.  Each participant was interviewed for a period of approximately 7 to 8 minutes, with the interview focusing on the reasons why they selected the therapist in question.  The older female respondent mentioned that she had blindly acted upon her doctor’s recommendation; the older male participant stated that he had acted on the advice of a co-worker who had previously suffered the effects of a slipped disc and had visited this same therapist.  The younger male participant who was seeking treatment for a sports injury, acted upon the advice of his coach.  Indeed, only the younger female participant made a conscious decision.  She obtained the name of several massage therapists, contacted each and everyone of them to inquire about price and credentials.  In fact, when she narrowed down her list to two therapists, she actually visited the offices of both and discretely asked patients about their experience.  She was the only one of the four respondents who made a conscious decision which subscribes to both earlier reviewed theory and the matrix discussed above.

It is significant to note that three of the respondents simply acted upon the basis of advice given them, albeit by a trusted associate/friend/family member.  In demographic terms, there is little in common between these three respondents.  This means that one cannot simply explain their purchase approach in demographic terms.  Instead, it is best explained through reference to the nature of the service in question.  All were seeking a personal service of which they had no prior experience or much information.  This meant that they had to turn to others with experience and information and this is precisely what they did.  Accordingly, the fact that the decision-making matrix does not hold form here does not invalidate the matrix but is a reflection upon the service in question.

4      Conclusion

On the basis of both the theoretical and the practical sections of this research study, a number of conclusions can be articulated.  The first, and the most obvious, is that there appears to be a disparity between theory and practice.  Only one of the respondents made a conscious buyer’s decision while the three others simply adhered to the advice given them.  The implication here is that three of the four respondents did not engage in a decision-making process, in which instance, theories of consumer perception, consumer decision making and decision-making styles simply do not factor in.  The differences between the respondents, whether in terms of age, education, experience and, of course, perceptions, among others, leads to the second conclusion.  This is that the application section does not cast doubt on the theories reviewed earlier but that the disparity between theory and application is an outcome of the nature of the service.  This is a remedial therapeutic, personal service with which the respondents have had no prior experience but which, for health reasons, they consider critically important.  Importance within the context of lack of experience is what impelled three of the respondents to seek the advice of those whom they considered knowledgeable.  It is, thus, that this research study will conclude with an affirmation of the validity of the theories reviewed but with a note of caution regarding their application to personal services.

5 References

Dawar, N. & Parker, P. (1996). Consumers’ use of brand name, price, physical appearance, and retail reputation as signals of product quality. Journal of Marketing, 58(4), 81-95.

Dodds, W. B. & Monroe, K. (1985). The effect of brand and price information on subject product evaluation. Advances in Consumer Research, 12, 85-90.

Dodds, W. B ., Monreo, K., & Grewal, D. (1 99 1). Effects of price, brand, and store information on buyers’ product evaluation. Journal of Marketing Research, 28, 307-3 19.

Dowling, G. & Staelin, R. (1994). A model of perceived risk and risk-handling activity. Journal of Consumer Research, 21, 1 19- 134.

Dowling, G. (1986). Perceived risk: The concept and its measurement. Psychology and Marketing, 3 (3),193-210.

Du Plessis, P. & Rousseau, G. (1999). Consumer behavior- a multicultural approach. Sigma, GA: Halfway House.

Durvasula, S., Lysonski, S., & Andrews, J. C. (1993). Cross-cultural generalizability of a scale for profiling consumers’ decision-making styles. Journal of Consumer Affairs, 27, 55-65.

Engel, J. F., Blackwell, R. D., & Miniard, P. W. (2007). Consumer behavior Mason, OH: South- Western.

Hafstrom, J. L., Chae, J. S., & Chung, Y. S (1992). Consumer decision-making styles: Comparison between United State and Korean young consumers. Journal of Consumer Affairs, 26, 146-158.

Hauser, J. R. & Urban, G. (1986).The value priority hypotheses for consumer budget plans. Journal of Consumer Research, 12, 446-462.

Howard, J. (1989). Consumer behavior in marketing strategy. Englewood Cliffs, NJ: Prentice Hall.

Mowen, J. & Minor, M. (2006). Consumer behavior, a framework. Englewood Cliffs, NJ: Prentice-Hall.

Oglethorpe, J. E. & Monroe, K. B. (1994). Determinants of perceived health and safety risks of selected hazardous products and activities. Journal of Consumers Affairs, 28(2), 326-347.

Olshavsky, R . W. (1985). Use of product-testing organizations’ recommendations as a strategy for choice simplification. Journal of Consumer Affairs, 19, 118-130.

Reibstein, D. (2005). Marketing, concepts, strategies, and decisions. Englewood Cliffs, NJ: Prentice-Hall.

Schiffman, L. & Kanuk, L. (2004). Consumer behavior. Englewood Cliffs, NJ: Prentice-Hall.

Schutte, H. & Ciarlante, D. (2007). Consumer behavior in Asia. New York: New York University Press.

Sproles, B. G. & Kendall, E. L. (1986). A methodology for profiling consumers’ decision-making styles. Journal of Consumer Affairs, 20, 267-279.

Teas, K. & Agarwal, S. (2000). The effect of extrinsic product cues on consumer perceptions of quality, sacrifice, and value. Journal of the Academy of Marketing Science, 28, 280-292.

Teas, K. & Agarwal, S. (2001). Perceived value: Mediating role of perceived risk. Journal of Marketing: Theory and Practice, 24, 1-14.

Walsh, G., Mitchell, V. W., & Thurau, H. T. (2001). German consumer decision-making styles. Journal of Consumer Affairs, 35, 73-95.

Zeithaml, V. A. (1988). Consumer perceptions of price, quality, and value: A means-end model and synthesis of evidence, Journal of Marketing, 52, 2-22.

 

 

 

 

 

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Influencing Consumer Behavior through Social Media Marketing

I’ve been noticing a trend among businesses online. They are everywhere! Every time I log into Facebook or Twitter, I see more and more ads. Is advertising going to go completely digital? Don’t be surprised if they do.

Digital Marketing is feeding off the amount of people now connected online through social networking sites. Social influence is playing a big part in the success of many companies and their marketing campaigns. This is a great concept for advertisers because they are getting information out to their target audiences in less time, and probably using less money.

I can’t count how many times I’ve seen soda ad campaigns all over YouTube and Facebook. The Internet is where people go for everything now, so why wouldn’t companies flock there, too? Some may not be ready, but they better catch on quick if they want to stomp out their competition.

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The problem is traditional companies have to adjust to the way social media works, especially if they want results. Becoming a member of a specific site is not all it takes. You have to put your brand out there by “Tweeting” about it constantly or updating statuses on Facebook about new products. Simply having someone “Like” your page on Facebook is not going to seal the deal. Companies really have to engage in these sites if they want people to stay interested in their brand. Give people something to think about, look at and talk about while branding yourself. This is how you influence consumer behavior.

If you think small, you will remain small. With the digital age we live in today, companies have to be open-minded about their marketing approach. It may be uncomfortable and annoying at first, but once they have the basics down, they will realize how much time and resources they saved on creating a successful marketing campaign.

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Consumers Can be Attracted With the Psychology of Behavioral Marketing

In today’s world of cutthroat competition, the advertisers are constantly trying to implement ways and means to attract the consumer eyeballs. As the online business flourishes, the advertisers try to make the websites presence felt through innovative means like search engine optimization, article syndication and link building. The latest kid on the block that helps marketers to attract consumers to their product or service is the psychology of behavioral marketing. The psychology of behavioral marketing can be employed to many dimensions in objective. Its systematic tracking and monitoring of individual conducts can be extended to communication scheduling and business operations.

The psychology of behavioral marketing enables the website owner or advertiser to understand the buying behavior of the consumer depending on their movement across the internet. The website is then adapted in terms of style, design, navigation and content to suit the needs of the user and attract the potential consumer to the site. If the psychology of behavioral marketing is applied to information search, purchase decision, need recognition and evaluation or comparison, then you can easily see a strategy fit for every segment. Marketers must easily define principles for using the psychology of behavioral marketing before taking certain risks.

At the root of the psychology of behavioral marketing is an analysis that is based on learning the forms of behavior for consumers. This helps the marketers fully understand buying patterns of clients in a matter of time and scheduling the activities of a client that is directed not only at a single purchase, but also for a lifetime or on an annual basis. As different marketers are increasingly trying to comprehend the significance of value for the lifetime client, they are starting to appreciate the fact that behavioral marketing can be a source for producing a recurrent analytical study of consumer trends and patterns.

For the analysis of the psychology of behavioral marketing, we must suppose that all of the dimensions determine the aptitude completely. The most advanced direct response advertiser will be likely to generate many re-targeting portions that are based on the extent to which a specific consumer went into the sales process before he decided not to close the deal by purchasing the product or service. Once advertisers who are practicing the psychology of behavioral marketing ‘distinguishes’ a target visitor as previously visiting the website, they can formulate plans to attract and retain that visitor.

An advocate of the psychology of behavioral marketing can know the fundamental demographic and behavioral traits of customers. The advocate can then provide the behavioral marketing traits to a marketing network and distribute the advertisements to various users that reveal those exact behaviors. Hence, as an online business owner you must strongly consider partnering with a behavioral marketing advertisement network as part of the advertisement plan, as they provide the inputs that enable your business to set different goals. The psychology of behavioral marketing when applied in context to any business can turn in to an essential tool for the advancement and growth of that particular business.

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Consumer Buying Behavior ? Do You Know Your Customers?

When it comes to buying products and services, people are motivated by many different factors such as finances, lifestyle, personal taste, and need. Some products are more necessary than others so they often take precedence over other products that might be more discretionary. An example of such might be foregoing the purchase of the latest greatest smartphone and instead getting some much needed clothing for work. All of these factors are generally considered when someone is interested in making a purchase.

A business owner needs to understand the buying behavior of his clients to ensure that he caters to their needs and desires. Obviously cost will be a factor for some people so often some items are simply out of reach financially, but you can still cater to their other needs and simpler, easier to attain desires. Generally speaking, a person who has a limited purchasing budget will buy a cheaper model of phone rather than one with all the newest, fanciest applications and software loaded onto it. As a business owner, you can still fulfill their need for style by offering snazzy colors and lots of accessories for a lower cost phone as well as higher priced ones to satisfy the needs of customers regardless of their financial buying power.

The demographics surrounding your business are also extremely important to ensure you are presenting your products to your audience correctly. If middle-income professionals who are younger surround you, your products should reflect that group’s desires and needs. If the area surrounding your business is higher income, older established clientele, your product lines should reflect those tastes. Other factors that can impact the buying behavior are cultural differences or whether you live in a city or a small town as needs will differ in all of these instances.

The media and peer pressure heavily influence younger people. They feel compelled to have the latest, newest products out, so they might be more interested in something that has lots of visual appeal and pizzazz rather than the quality of the product or if it is the best value for the price. Often times, an older person will be looking for practicality and getting the best “bang for their buck”. As a business owner your most important lesson to learn is to know your customer and understand their buying behavior so that you can ensure you are marketing your products and services effectively.

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Consumer Psychology – Selling the Wireless Technology Dream

 

‘Wireless’ has become the buzzword of today, no longer causing us to think of our favorite radio shows, but instead to focus upon the freedom and convenience that new wireless technology can provide.  This change in concept is largely due to the skill of the marketers who have dedicated themselves to finding the best way possible to sell the wireless dream to the consumer.  What they have discovered, through trial and error, is that the people who most wanted wireless solutions in their lives needed to be told that they wanted them and that a description of what the technology could do was, to many, useless unless put into an everyday lifestyle context.  

 

It’s important to bear in mind that one of the key aspects of consumer psychology lies in the decision-making process.  This comes about as an attempt to ‘solve problems’.  A problem, in the consumer psychology sense, can be described as “a need or desire that is, as yet, unfulfilled.”  For example, a businesswoman may want to reach her office in under thirty minutes by car, but is subject to constant traffic delays which slow her down.  In this instance, a service that could offer a personalized daily route planner to steer her clear of any traffic hold-ups would be of particular value, as it would fulfill a need by solving her particular problem.  

 

Problems can be major or minor.  Major problems such as unemployment have an impact upon minor problems and push them into the background.  This, of course, means that unforeseen changes to the economy can consequently have a huge knock-on effect upon product sales, no matter how many consumer problems they may appear to solve during times of economic growth.

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Consumers will often create their own problems by drawing internal comparisons upon what their life is and what they want it to be.  Discrepancies will undoubtedly be found in some areas and, once the consumer has pinpointed these, a psychological balancing act will take place to determine whether the weight or difference is great enough to justify action being taken.  If justification is made, then either consciously or unconsciously the consumer will begin to search for solutions, usually in the form of a product or service.  

 

There are two primary types of problems in consumer psychology: active and inactive.  An active problem is one that requires immediate attention; for example, you have a toothache and you need to relieve the pain without delay.  With an inactive problem on the other hand, the consumer may not be aware that their situation is indeed a problem; for example, they may not realise that they could double their modem speed by using a particular plug-in device.  

 

Maslow taught us through his hierarchy of needs theory that active problems follow a strict order of internal significance.  In other words, once we have satisfied our primary instinctive need for food, warmth and shelter, our psyche is free to attain higher levels of satisfaction such as those relating to self-esteem and a sense of belonging.  The search for attainment of these higher-level needs initially falls into our category of inactive problems, as they are not considered a necessary part of our internal life-style model and exist, for the most part, on a subconscious level.  Necessity is born only when our inactive needs are stimulated and enhanced by both our external and internal perception of the world around us. Our search for fulfilment of these needs then becomes an active problem when their characteristics become seen as necessary to our life-style. 

 

Furthermore, active problems are often effectively stimulated and reinforced by marketers in their drive to provide prospective purchasers with the perfect lifestyle-model, that is, a glimpse into the perfect lifestyle where the attributes of your product are seen to be key to finding a better way of life. The power of the life-style model lies in its subconscious link to the feelings of fulfillment and acceptance being sought by the consumer.  Good technology marketers know that inactive problems are the ones most commonly used to introduce new products into the marketplace.  Indeed, the marketer will often create a problem for the consumer that is initially inactive, but then gradually grows in significance to the consumer through repeated media exposure routes, until it becomes an active problem that requires immediate attention.

 

Find out more by reading ‘Marketing Wireless Products’ by Gratton & Gratton (Butterworth Heinemann, 2004).  The book comprehensively explains how, by fully understanding consumer lifestyle elements, we can help to build an effective bridge between product development and on-shelf success.

 

 

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The Complexities of Influencing Consumer Behavior

Companies use to try everything to get our attentions, from interesting packages to unforgettable commercials, they would bribe us with just about anything to bribe our attention. But those days are over. In today’s world, your customer can’t be as easily convinced as you may think. For that reason, you will want to do your homework because influencing consumer behavior is not as simple as it once was. Because most people don’t trust businesses as much as they trust one other, they are more picky about the brand they choose and also what that brand represents. 

The change in influencing consumer behavior is in the shift of control. Companies use to have control but now with the swarm of new discoveries in the tech field, consumers are fully taking control of how they are being influenced. Having an online forum and a number of places to go online for answers puts your customer in the driver seat of deciding what brand is deserving of their investment, and what brand they do not want anything to do with. This definitely puts companies in a more challenging position than ever before, but this is something they can both benefit from.

If a business wants loyal customers, they will need to earn their trust. You can’t expect to sell bad products and have satisfied customers. It just doesn’t work that way. If you upset consumers, they will probably upset you when they bad mouth you to other online users. Word of mouth is the most used form of marketing so it is important to leave your consumers with the most positive experience. Even if the experience just comes from the relationship they are building with you. Just like a restaurant wants their customers to leave happy, you will definitely want to do the same.

There aren’t too many rules protecting businesses against people verbally bashing them online which means you have to be careful in preserving your image to such a vast group of people. If someone did call your brand out online, your negative PR is exposed to a large number of people and your image becomes unfavorable to a god number of potential customers.

With a deep passion for understanding and influencing consumer behaviour, Darren explores the power of time and insights generation. He asks, how much better could we be if we gave ourselves that little bit more time to think? In thespirit of ideas worth spreading, TEDx is a program of local, self-organized events that bring people together to share a TED-like experience. At a TEDx event, TEDTalks video and live speakers combine to spark deep discussion and connection in a small group. These local, self-organized events are branded TEDx, where x = independently organized TED event. The TED Conference provides general guidance for the TEDx program, but individual TEDx events are self-organized.* (*Subject to certain rules and regulations)

Market research China ? Chinese consumer behavior

Are you interested in market research China? Do you want to obtain more information about Chinese consumer behavior? If your answer to any of these two questions is yes, then you should definitely keep on reading. This article is intended at the smart investor, looking to provide useful details about Chinese marketing and other similar aspects. You will be informed from the start about what market research entails and what aspects you should be interested when it comes to consumer behavior.

 

When you think about market research China, what are the aspects that first come to mind? Well, you probably think about assessing the current conditions of the Chinese economic market, trying to determine the right market entry strategy. Once such actions have been completed, you can proceed to the next step and start analyzing the existent channels for marketing your goods or services. But market research China entails so much more than that. You have to constantly collect information regarding the Chinese economy and search for data that is actually relevant for your company, analyzing all the facts before taking a final decision.

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While everyone can appreciate the Chinese economic market as being strong, it is just as true that there are a lot of people confused when it comes to market research China. The Chinese economic market is defined by a number of distinct characteristics, among which we can include its size, complexity, rapid changes, the implementation of specific rules and regulations etc. The most important thing that you have to keep in mind when it comes to market research China is that all the information obtained has to be thoroughly verified first. Consider the help of people with experience and do not attempt to handle all the research by yourself, especially if you want to succeed on the Chinese market.

 

It might be in your best interest if you found out a little bit of information about Chinese consumer behavior, as most people (business investors included) are at a loss when it comes to such matter. The Chinese economic market is far from being homogenous and there are different consumer behaviors that you will encounter while doing business in this country. China has an impressive economy and it is the diverse Chinese consumer behavior that contributes directly to making it so powerful. By using the Internet for research purposes, you can find you the most common misconceptions regarding Chinese consumer behavior, in a matter of minutes.

 

When it comes to analyzing the Chinese consumer behavior, you should take into consideration both the regional and the demographic differences. You will soon be able to draw your own conclusions, stating clearly that the Chinese economic market is strong, alive but far from being the uniform market that one would expect in the first place. While doing your market research China, keep in mind that Chinese consumer behavior can help you determine the best investments. If you find the right economic environment and satisfy the demands of the targeted segment of the market, then you will surely make a profit and be successful.

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Understanding consumer behavior in recession

UNDERSTANDING CONSUMER BEHAVIOR IN RECESSION.

Consumer behavior involves the use and disposal of products as well as the study of how they are purchased. Product use is often of great interest to the marketer, because this may influence how a product is best positioned or how we can encourage increased consumption.
Consumers are searching harder for value and are utilizing internet tools such as price comparison websites and search engines. Broadband connections are still growing despite the downturn and two thirds of homes now have high-speed web access. The current expectation is that both interest rates and inflation will stay low, perversely putting consumers who remain in employment in a better economic position. The main issues will be confidence and reassurance. How will consumers behave as we emerge from this downturn? Though recessions differ in their causes, depth, and duration, it’s possible to anticipate the way consumers will act by understanding their behavior and motivation in previous recessions and analyzing current trends.
Research shows that people favor pleasurable “want” options if the consequences are immediate and good-for-you “should” options if the consequences will occur in the future. That finding offers potentially profitable opportunities. The unfortunate reality is that all of this haranguing usually has little to nothing to do with actual, real world behavior simply because nobody ever takes the time necessary to carefully study that behavior. It is much easier for us all – consumer and expert alike – to talk about the important implications of these sobering times as we continue to pump gas into our cars, shop for groceries and pretty much go on about our lives.

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Consumer behavior

An important part of the is to understand why a customer or buyer makes a purchase. Without such an understanding, businesses find it hard to respond to the customer’s needs and wants. Marketing theory traditionally splits analysis of buyer or customer behaviour into two broad groups for analysis – Consumer Buyers and Industrial Buyers Consumer buyers are those who purchase items for their personal consumption. Industrial buyers are those who purchase items on behalf of their business or organization.

The purposes of this report is to display an understanding of the theoretical framework of buyer behaviour, to appraise the links between marketing communications and buyer behaviour theory and to discuss the impact of the major variables influencing buying behaviour.

We are not perfectly rational, sensible buyers. We do not always choose goods and services solely on price, performance and availability. The truth is that many purchases are influenced by a whole host of emotional reasons like esteem and image. Many of these non-rational reasons are hidden deep in our subconscious.

In-depth research probes into the darker depths of our unconscious. Some research presents such bizarre explanations that many marketers reject the findings.

Research helps find the real reasons why we buy what we buy. This requires time, money and expertise. Surprisingly many other organisations don’t really know exactly why their customers buy or don’t buy from them. Yet understanding customers is at the heart of marketing. Once the reasons why people buy or don’t buy are discovered, the marketing mix can be changed to suit the buyer’s needs and wants.

involves both simple and complex mental processes. Marketers cannot capture human nature in its entirety but we can learn a lot about customers through research, observation and thinking. Here’s Professor Theodore Levitt:

I think it is a process of trying to think your way through why people behave in certain ways. Or if not why, then what that behaviour is likely to be given certain kinds of products, certain kinds of… just stop to think.

A customer’s approach to purchasing a product or service is influenced by their situation – whether they have money and how important, frequent, risky or urgent the purchase is to them in their situation.

Customers make more of an effort, and become more involved, if the purchase is relatively important to them – particularly if they have no previous experience of buying such a product or service.

On the other hand, if the item being purchased is low value and frequently bought, like a jar of coffee, it follows that the buyer will spend less time and effort and will have less involvement with the purchase.

These frequent, inexpensive purchases generally have little risk, and require less information. These kind of purchase situations are referred to as ‘Low Involvement Purchases’. In these situations, consumers can fall into a routine purchasing pattern which requires little thought and even less effort.

Whenever the need is stimulated – a particular brand is automatically purchased. This is called ‘Routinised Response Behaviour.’ You can visit the Hall Of Fame later to see the gurus explain how brands influence routine purchases.

Alternatively, an expensive high risk infrequent purchase like your first computer will require a lot of detailed information and careful analysis before deciding which machine. This is called ‘High Involvement’. Here the consumer goes through an extensive problem solving process – searching and collecting information, evaluating it and eventually deciding on a particular choice.

There is a third type of buying situation. This is where the customer has had some experience of buying a particular type of product or service before. There is less risk attached and less information is required. This is called ‘Limited Problem Solving’.

Customers require different marketing mixes in different buying situations. For example, a routinised response purchase, like a can of cola, doesn’t require much supporting product literature but perhaps it needs wide distribution and easy availability. An extensive problem solving Type of Purchase, on the other hand, would require detailed

Buyer behaviour is focused upon the needs of individuals, groups and organisations. To understand consumer buyer behaviour is to understand how the person interacts with the marketing mix. As described by Cohen (1991), the marketing mix inputs (or the four P’s of price, place, promotion, and product) are adapted and focused upon the consumer.

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The psychology of each individual considers the product or service on offer in relation to their own culture, attitude, previous learning, and personal perception. The consumer then decides whether or not to purchase, where to purchase, the brand that he or she prefers, and other choices.

People today are looking for prevention rather than just cure. In 1994, 32% of New Zealanders took some form of supplement and in the latest study in 1997 this figure has increased to 74%. Each different product market consists of buyers, and buyers are all different in one way or another. They may differ in their wants, resources, locations, buying attitudes and buying practices. Because buyers have unique needs and wants, each buyer is potentially a separate market.

Consumer involvement is the perceived personal importance and interest consumers attach to the acquisition, consumption, and disposition of a good, service, or an idea. As their involvement increases, consumers have a greater motivation to attend to, comprehend, and elaborate on information pertaining to the purchase. (Mowen & Minor, 1998, p.64). In the case of low involvement, consumer views a purchase as unimportant and regards the outcome of his or her decision as inconsequential. Because the purchase carries a minimal degree of personal relevance or identification, the individual feels there is little or nothing to be gained from attending to the details of a purchase. (Hanna & Wozniak, 2001, p.290). High involvement purchases are those that are important to the consumer either from a financial, social, or psychological point of views. The purchase is characterised by personal relevance and identification with the outcome. (Hanna & Wozniak, 2001, p.291). An individual anticipates a potentially significant gain from expending time and effort in comparison-shopping before buying. For example, a girl purchasing an expensive ball dress has a high degree of personal identification. Therefore, a high level of felt involvement can increase an individual’s willingness to search for, process, and transmit information about a purchase.

The most important factors influencing a consumer’s involvement level are their perceived risks. The purchase of any product involves a certain amount of risk, which may include:

- Product Failure – risk that the product will not perform as expected.

- Financial – risk that the outcome will harm the consumer financially.

- Operational – risk that consists of alternative means of performing the operation or meeting the need.

- Social – risk friends or acquaintances will deride the purchase.

- Psychological – risk that the product will lower the consumer’s self-image.

- Personal – risk that the product will physically harm the buyer.

In a high degree of perceived risk, decisions in this case may require significant financial commitments, involve social or psychological implications. In the case of low degree of perceived risk, decisions in this case may require small or no financial commitments that involve social or psychological implications. Consumers may already established criteria for evaluating products, services, or brands within the choice category.

In high involvement situations consumers are usually more aroused and more attentive, which expands their short-term memory capacity to its maximal extent. In low involvement conditions, the arousal level is apt to be low, so consumers focus relatively little memory capacity on the stimulus. (Mowen & Minor, 1998, p.101). As involvement levels increases, consumers may allocate more capacity to a stimulus.

Evaluative criteria are the various features a consumer looks for in response to a particular problem. The number of evaluative criteria used by consumers depends on the product, the consumer and the situation. ((Neal, Quester & Hawkins, 2000, p.5.3-5.4 & p.5.22) Formal Clothing In the process of evaluation, a student will evaluate the characteristics of various formal clothing and choose the one that is most likely to fulfil her or her needs. The evaluative criteria of the students include tangible cost, social and psychological measures. The importance of particular evaluative criteria differs from consumer to consumer. The decision to purchase formal clothing is base on the following evaluative criteria:

- Price.

- Quality.

- Brand.

- Style.

- Store.

The evaluative criteria regarding the purchase of formal clothing are complex due to the level of perceived risk involved with such a high involvement purchase. Typically, high involvement planned purchases (such as formal clothing) follow the more complex compensatory decision rules. A compensatory model involves students evaluating each formal wear they view across all need criteria. In this instance, one formal wear may compensate for weaknesses in one criterion.

However, often consumers will go through different stages of rules, that is, they will utilise a range of rules when evaluating alternatives with different attributes being evaluated by different rules at each stage. There are certain criteria regarding the purchase of formal clothing that the students is not willing to accept at a minimum level. Style and price are two attributes that was found from the interviews. Students are not prepared to lower their expectations; therefore the compensatory model does not always apply in this situation. These two criteria are more non-compensatory rules. Initially a disjunctive approach was adopted by respondents, where they would evaluate all formal clothing that meet their requirements concerning style. Then they would move onto an elimination-by-aspects approach. This involved them choosing formal clothing that rated highest on their next most important criteria (price), and then continuing through the other attributes (brand, quality) until only one formal wear remained. In summary, the formal clothing purchase decision involves both compensatory and non-compensatory models depending on the stages of the evaluation.

As consumer markets become more and more competitive, marketers need to understand very thoroughly both the needs and desires of their potential consumers; which product features can be combined to satisfy these needs and desires. A better knowledge of consumer behavior can enhance the company’s understanding of itself and its environment. Product bought by habit and low involvement purchases such as health supplements tend to be purchased more frequently in which provide a greater opportunity for positive reinforcement and brand loyalty. With each successive purchase of the same brand, the chances of consumers buying again increases until there is a high probability that the consumer will continue to repurchase. It is important for marketing management to identify the position of its brand in the market and as the strategic implications of this applies to every aspect of the marketing strategy. Companies selling low-involvement, habitual products such as health supplements must ensure that their products are distributed extensively. This is because the health supplements industry produces high turnover and low margin products. Widespread distribution is important as consumers seeing the products often will help remind them to buy, and it also keeping with the fact that the most consumers purchase the health supplements from a particular store because of the store’s convenience. Many health supplements companies have been successful in their distribution of their products. Healtheries has climbed to number on in personal products in the supermarkets, this success is attributed to the channel switching from chemists and health food shops to super market chains. (Marketing, 1999, p.23). Many consumers buy from stores like pharmacies and health food stores because they need to seek more information about the health supplements products; therefore, it is important that the retailers can provide information for their customers. The nature of advertising and promotion also differs according to the involvement level of the purchase. In low-involvement decision process, consumers engage in very little external search before they make a purchase. Therefore it is crucial that consumers immediately think of the company’s brand when they recognise a problem.

The decision-making processes of health supplements and formal clothing are completely different. The level of involvement the consumers has in the purchasing decision for formal clothing is high, this is because their perceived risks such as financial and psychological risks are high as well. In contrast, the health supplements purchase has little or no risks involved therefore low involvement occurs in the purchase decision. A consumer simply feels a physical problem will purchase health supplements. There is not need for an extended information search because the consumer does not consider the purchase important enough to was time and effort in its search. The formal clothing purchases in another hands; involve an extensive information search. The types of information search also have influences on the types of advertising used. Regarding to the low-involvement health supplements purchase, mass audiences are targeted through repetitive advertising. Marketers must try to induce a higher level of involvement from customers through their advertising and promotion strategies. Formal clothing advertising is much more specialised and focused. Marketer uses persuasive advertising messages to induce sales. And informative and detailed advertising are often used to assist consumers in their information search. The complex nature of the evaluative criteria of formal clothing reinforces this idea, where alternative solutions are evaluated using numerous criteria, in contrast to health supplements are mainly evaluated mainly on the basis of convenience and sales force’s expertise. The decision making processes that consumers goes through is also important as it helps the marketer to gain an understanding of the way to increased their revenue. The ability for marketers to apply strategies that influences the consumers’ decision is the key to successful marketing.

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Las Vegas Marketing Golden Goose: Understanding Consumer Buying Behavior

Where are your customers in the buying process? What information are they looking for at each stage of your Las Vegas marketing? No matter what your business, industry, products, services or price point, customers follow a set buying behavior or consumer buying process before making a purchase.

Customers enter the buying process at different stages. Some know exactly what they want and others may need a little more specialized attention. The goal of your Las Vegas marketing is to identify what stage of consumer buying behavior a customer has entered, and then present effective marketing, branding and customer service to move that potential customer along to the next step of buying behavior. The following six stages of the buying process truly are your golden goose that will keep laying eggs for your Nevada business.

1) Identifying A Need Or Problem – The first step of the consumer buying process involves a potential customer determining a need or problem that they need to resolve. For example, let’s use buying a new computer as an example of typical buying behavior. At the first stage of the buying process, the consumer doesn’t yet know they will be purchasing a new computer, but rather, they’ve determined their current computer starts slowly, can’t handle new software, is unresponsive and appears to be failing.

2) Searching For A Solution To The Need Or Problem – In this second stage of buying behavior, the consumer begins to look for products and services as a solution to their problem. Continuing the above example of buying a computer, at this stage of consumer buyer behavior, the consumer still hasn’t committed to buying the product. Instead, they’ll start exploring options such as: will a larger hard drive or more memory solve my problem? Is there a software solution to speed up my slow computer? Do I have a virus that’s causing my problem? Can I take my computer to an electronics store to be fixed? Do I need a new computer?

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3) Evaluating Options – Now that the potential customer has completed preliminary research, they have a better understanding of what needs to be resolved and possible solutions to their problem. The consumer begins evaluating which solution is the best for their situation. Again, using a computer purchase as an example, the potential customer will start ruling out possible solutions identified in step two of consumer buying behavior. For example, the consumer might decide that software won’t solve the problem of a slow computer, that their current computer is 10 years old and may need to be replaced. Adding a new hard drive or memory will only help minimally.

4) Deciding On A Product Or Service – Things are starting to come together in the buyer’s mind and it’s time for your Nevada business to muscle up! The consumer understands their problem or need, has completed some research, reviewed potential solutions and knows what they need to buy. In this case a new computer. At this stage of the consumer buying process, your Las Vegas marketing should be in high gear! You want to present your product or service as the buyer’s solution. Branding is also critical! All of your marketing efforts at this step should be in proving to the customer that your product has the better features, will save them time and money, and anything else that will position your product as better than Joe Schmo’s down the street.

5) Completing The Purchase – Hopefully at this step in the consumer buying process the customer has turned to your Nevada business for the sale. Make things easy for the customer to facilitate the purchase. And just as important as making the sale, if you don’t close the deal, you need to find out why! If you can, ask the lost customer what you did wrong and what the other business did right. This is vital for refining your Las Vegas marketing to improve your control over buying behavior. But keep in mind that most people inadvertently obscure their real reasons for not buying from you. So really try to read what’s going on behind their actions.

6) Reevaluating The Purchase – In this last stage of the consumer buying process, the customer will review their purchase and attempt to determine if they made the correct decision. Buyer’s remorse can set in at this point. Your goal for your Las Vegas marketing and customer service is to help reaffirm that the customer made the right choice. Focus on fulfilling or exceeding expectations. Ensure that your customer support services are easily and readily available to the new customer.

Once you have a strong understanding of the thought process behind consumer buyer behavior, ramp up your Las Vegas marketing to attack each stage of the buying process. Keep in mind that the above six stages of the consumer buying process applies to every purchase, regardless if you’re selling directly to consumers or businesses. And it also applies to products and services equally, whether the purchase is for something simple like a pack of gum, or complex, such as buying a house, a computer, a website, or a car.

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