Consumer Behaviour - Part 4 - Consumer Behavior Essay Example

“The consumer orientation, first developed as a by-product, and an outlet, of the industrial pattern of control, has been finally prised from the original stem and transformed into a self-sustained and self-perpetuating pattern of life” (Bauman 179: 1982) - Consumer Behaviour introduction. The consumer behaviour reflects the pre and post buying behaviours of individuals of the society, it depends on product’s nature and at times market’s nature. The starting point of any analysis of consumer demand must be the enabling conditions represented by income, assets, and debts, as well as by such demographic facts as population growth and the age distribution of the population. Over a period of several years these conditions may vary substantially. From one quarter to the next, however, changes in them are usually insignificant. Consumer sentiment, on the other hand, though sometimes unchanged over fairly long periods, may occasionally undergo swift changes. What is the origin of these changes? Do they originate exclusively in financial considerations, either national or personal? Or may the origin sometimes lie elsewhere? It will be shown that changes in consumer attitudes and expectations may be unrelated to changes in consumer incomes. In addition to their origin, the effects of changes in consumer sentiment on the economy must be studied. It is necessary to find out which types of consumer demand are and which types are not influenced by perceptions, attitudes, hopes, and fears of consumers. Segmentation, in case of American Apparel, is the base for identifying any behaviour the consumer may possess.

“The Changing Consumer we hope to chart the nature of that change and to discuss why it is that consumption is so important to the state of the world in which we live, and what role, if any, consumption plays in actively underpinning social, economic and political transformation. The papers in this collection originate from a conference entitled Consuming Markets”. (Anderson, Meethan, Miles 1: 2002).

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Segmentation:

Variable
Typical Breakdowns
Geographic

City:
London.
Estimated audience:
80% (Say 80,000 Potential customers)
Demographic

Age:
20 – 25, 26 – 30.
Sex:
Male, female
Family size:
1-2, 3-4, 5+
Family life cycle:
Young single; young, married, divorced, no children; young,
married, youngest child under 6; young, married, divorced,
youngest child 6 or over; older, married, with children; older,
married, divorced.
Income:
Minimum of Pounds 24,400.
Occupation:
Students, professional & Technical, Businessmen.
Education:
O & A Levels, Undergraduate.
Psychographic

Social class:
Lower middle, upper middle, lower
upper, upper.
Personality:
Entertainment seekers, extroverts.
Behaviouristic

Purchase state:
Aware, Informed.
Attitude toward service
Positive, indifferent, negative.

Market segmentation refers to marketing efforts to group potential buyers by demographic characteristics, geographical region, lifestyle, usage patterns, and behavioural factors. Thus, submarkets are frequently established on the basis of income, age, sex, occupation, and complex behavioural dimensions. The successful application of the strategy of product differentiation should result in an increased horizontal share of a generalised market. Product differentiation refers to the marketing efforts that distinguish a basically homogeneous product from competitors’ products. Methods used to accomplish this include altering the product’s physical characteristics, or branding, advertising, and packaging that is targeted to the stimulation of the individual’s five senses. These promotional appeals can be especially successful in an affluent society. A strategy of market segmentation can aid in developing particular market segments in contrast to a strategy of product differentiation that distinguishes a product among many similar products. Alternate strategies of product differentiation and market segmentation are frequently complementary and used together. Until and unless the audience does not become clear, the marketing efforts may go useless or may be in relation to cost effectiveness. Therefore it seems vital to entertain the actual targeted audience of American Apparel rather then going for new one. In National Fisheries Marketing, the products such as fish is only provided to the vendors, not the general public, because of which all the efforts are directed towards the vendors, otherwise the risk factor is involved and high costs may result in severe loss.

The Consumer Decision Process:

The buyer decision process begins long before the actual purchase and continues after the purchase. Consequently, marketers should focus attention on the entire decision process rather than just the purchase decision. Although this model seems to imply that the consumer passes through all five stages of the decision process, in second world items purchase some stages may be skipped or even reversed.

Problem Recognition: The consumer becomes aware that he or she has a purchasing problem; awareness of the problem can occur through internal thinking or through environmental stimuli such as the advertisements by American Apparel or retailer or the word-of-mouth communications by a neighbour. Word-of-mouth social cues are received through friends, family members, and others which have a strong impact in brining more of the people in the second world. Another type of stimulus is an advertisement either seen in a newspaper or magazine or heard over radio or television. Willingness to appear stylish in a virtual world may also be a factor accompanied by a desire to socialise.

Information Search: The consumer engages in internal memory scanning for relevant information on the product or store alternatives and in external seeking of information from a variety of sources. The search would necessarily be there as the access to virtual world is difficult and further customers would not know how to dress their avatar. Overt search by the consumer tends to reduce risk of uncertainty and thereby risk in purchasing situations. Methods of reducing risk would be applied depending upon the situation. Endorsements or testimonials may be used as a risk reliever provided the buyer has confidence in the individual who gives the product endorsement, of course the loyal customers of American Apparel would contact the management directly for clearance of any doubts.

Evaluation of Alternatives: The consumer compares and contrasts the alternatives in relation to the motives and evaluative criteria significant to the consumer. Economic buying motives would include product efficiency in operation, dependability in quality, or economy in use. Emotional buying motives would include emulation, pleasure, prestige, ambition, or romance. Product buying motives would include simplicity in operation or ease of installation. Patronage buying motives would include reliability of the seller, variety for selection, or fulfillment of exact specifications. This stage can be waived as the virtual second world has got lesser completion when it comes virtual dressing. In case of National Fisheries Marketing, the company has to provide many attached services and sales promotional offers to keep the customer loyal as there are numerous alternatives for them.

Purchase Decision: The consumer selects an alternative from the set of alternatives that could solve the purchasing problem. Personal influence may be especially important for individuals who lack confidence in their ability to evaluate the value of a product, this include those who are although loyal o American Apparel but are not so social or may have less knowledge of computer and internet usage. The purchase act includes deciding where to buy, agreeing to terms of sale, and learning.

Postpurchase Behaviour: After the purchase the consumer can exhibit one or a combination of three types of behaviour: dissonance reducing behaviours, satisfying and dissatisfying behaviours, and further purchasing behaviours. Dissonance reducing behaviours are necessary if the consumer feels considerable conflict about whether it really was the best decision or not. Dissonance can be reduced by providing reassuring information that supports the original decision. In National Fisheries Marketing, the company tries to reduce the dissonance by allowing customers to return the purchased material (ice, fish) if they find any fault, the company pays back the entire sum of money and next time it gives discount to that particular customer to keep him loyal.

Factors Influencing Customer Decision Making Process:
The factors influencing the customer decision-making process are personality, lifestyle, mood and attitude, perceptions, perceived risk, individual motivations and needs, purchase habits, culture and learning.

Personality: Many marketing specialists segment their markets using personality terminology, i.e. they talk about brands and buying types in terms of traits, or they explain the process whereby individual differences are systematically related to purchasing decisions. Competition and secrecy mean that few publish or disclose the data upon which they base their consumption types. Many companies have tried to describe product-using types more in terms of lifestyle analysis than according to personality traits, American Apparel is no different as it is trying to bring those people out of its customers who are willing to socialise and have got some sense.

Lifestyle: The notion of lifestyle has no meaning when applied to traditional contexts, whereas in modern societies, lifestyle choices are … constitutive of daily life. Today’s consumer faces a world of unprecedented consumption opportunities. More of us than ever before can almost instantaneously call up information, people and places that for practical purposes were inaccessible only a decade ago. If a person or place that we call up on our computer screen looks interesting, we can press a few more buttons and procure airline tickets so we can physically visit them. Ordering the material ingredients that define a consumer lifestyle (increasingly conflated with a human lifestyle), has also never been easier. We can manage finances and investments, borrow money, pay bills, gamble, and find jobs from the comfort of our home computers. We can work, educate ourselves, and shop without leaving home. We can meet mates, enjoy works of art and music, and go to online sites where we can chat and exchange information and opinions with those who share common consumption interests with us while looking even cooler through our second world dressing (thanks to American Apparel). We can follow our favourite sports team, sing the praises of our favourite automobile, play a computer game with someone in Bangkok, or get mutual support for a consumer boycott without getting up from our chairs. When these devices fail us, we may wonder not only where we are, but who we are. This feeling is something which drives people to move forward so that they can facilitate their lives even more.

Mood & Attitude: Mood or affect intensity and sensitivity are clearly important, both in responding to advertisements and in decision-making about purchases. When in a naturally good mood, or on having their mood changed by in-store characteristics (e.g. music, lighting, smells), it does seem that people are more likely to buy. Values, too, are important, particularly those related to materialism and possessions, which do predict what kind of purchases individuals make. Moods are naturally good when people move out for shopping, American Apparel is not going to face any problems for that.

Attitudes are shaped by demographics, social factors, and personality. There are many different definitions of attitudes. The most recent definition in substance maintains that attitudes stem from opinions and beliefs. Consequently consumers develop many opinions and beliefs about products and their attributes as well as retail stores where they shop. Attitudes are often difficult to change, but marketers may be able to accomplish attitude change through communications, particularly if buyers’ perceptions about the brand are incorrect. Buyers’ attitudes toward brands are important because these attitudes do influence consumer behaviour. Attitude change revolves around changing the motivational function associating the product with a special group or event, which is easy to be done in case of American Apparel. The functional approach is a theory that shows how changing basic motivations can change attitudes.

Perceptions: Perception is the process by which the consumer experiences the universe. For example, to a mature individual all teenage music may sound alike, but each song sounds different to the teenager. Therefore, perception is the process by which the individual selects, organises, and interprets stimuli into a meaningful and coherent picture. Two people can be exposed to the same stimuli but perceive them in different ways. Examples of stimuli include products, packages, brand names, and advertisements.

What an individual perceives may be determined by his own system of values and needs. This may be based upon activities, interests, and opinions that are developed in the process of interaction with others. For example, people tend to perceive chatting a way to show themselves even smarter, such people would prefer to dress well in the second world.

Perceived Risk: Perception plays a major part in the perceived risk in purchasing a product or service. Perceived risk represents the anxieties felt because the buyer cannot anticipate the results of a purchase but feels uneasy since negative consequences might be involved. When a purchaser perceives some degree of risk in a buying transaction, a number of different strategies may be used. First, perceived risk can be reduced in some way by decreasing the probability of failure. Second, the buyer can shift from one type of perceived risk to another type that is of less impact on the realization of objectives if this method fails. Third, the purchase transaction can be postponed, thus delaying a situation of great risk. Fourth, the purchase can be made and this risk absorbed. Many business firms selling to consumers have intentionally provided risk reduction methods for consumers, but some firms, especially service firms, have been lax in this regard. Same is the issue with American Apparels, it is so obvious to them that people who understand the system and have a proper knowledge of using this unique service would log on to the second world, it is perhaps their saving grace.

Individual Motivations and Needs: Marketers cannot observe motivation. A motive is an internal state of the purchaser. While consumer behaviour is observable, motives can only be inferred. Motivation is a result of a learning process. Motives affect how people process information. Whereas some motives may be biologically based, a great many motives are a result of a social conditioning process. Factors such as perception, personality, and attitudes will influence how consumers react and respond to their environment. Multiple motives generally operate rather than single motives in consumer behaviour situations. Multiple motives help consumers to develop and identify their fundamental strivings. These strivings take the form of general goals that concern such elements as safety, romance, belongingness, or other desired states that consumers seek to achieve. Motives thus guide consumer behaviour in activities and decision-making. For a consumer using the American Apparel in the second world, the motivation might be to look good, people may associate those virtual clothes with the pricing (if pricing is high). For a customer of National Fisheries Marketing, the motivation might be the Profit, buying at a lesser price and selling at a bit higher.

Purchase Habits: There are people in the society who prefer to try out every new and interesting service or product, such people definitely look for further entertainment and new activities. American Apparel is providing them with a great opportunity to explore a different world. However, purchase habits are not always same for every product or service, they differ. For a person who although tries out every new service, if finds a new barber, would hardly go for cut from him and remain stick to the old one.

Culture: Cultural meaning is located and moves in the culturally constituted world, in the transfer and exchange of consumer goods, and in the consumption rituals of the consumer. Perhaps the most important categories of culture segments are the distinctions of social class status, gender, age, and occupation. Each specific culture establishes its own special vision of a constituted society that develops a system of verbal and nonverbal symbols of the values shared by their society. These symbols associated with a culture serve as a powerful unconscious force that shapes consumer attitudes and behaviour. Within the United Kingdom there are many subcultures that are determined by age, geographical location, religion, and other factors. This modern era possess a modern culture, every one is free to live, allowed to do whatever one is willing to do. American Apparel has therefore got a fair chance of survival as the culture is also supporting it.

Learning: Learning refers to consumer behaviour that results from repeated experience and thinking. Associative learning involves making a new connection between two events in the environment. Classical conditioning is a part of associative learning. Four variables operate in classical conditioning: drive, cue, response, and reinforcement. A drive is a fundamental need. The degree or intensity of drives is difficult to measure but they are developed by motives. A cue is a stimulus or symbol perceived by consumers. A response is the action to satisfy the drive. Reinforcement represents the reward. Modeling is another part of associative learning. Modeling is vicarious learning. Socialization is the process whereby this type of learning is developed, and observation in teenagers is a very important part of it. Associative learning is the most basic type of learning. American Apparel has come up with a unique concept which is merely new for the world of Internet users and therefore the learning has to take place, but users are aware of many associated activities such as online chatting etc. therefore they can predict the excitement.

Marketing Implications:

Determining why people buy and why they make the purchase choices that they do is quite complex. Purchase decisions extend from routine to major nonroutine purchases requiring deliberation and planning over extended time periods. Learning what motivates consumer purchasing behaviour is not easy. Basic fundamentals of motivation include: Motives are not permanent. Motives change throughout the life cycle. Aspirations tend to grow with achievement and decline with failure. Motivation is influenced by the performance of other members of the group to which a person belongs and by that of reference groups. Consumers are actively learning and acquiring new wants. The adoption of direct selling to the consumer has influenced the success enjoyed by some firms. Many consumers have rearranged their shopping priorities and prefer to shop at home. This new trend might have been caused by a combination of factors such as increased education, more women in the work force, spending leisure hours in other pursuits, or confidence that the seller is reputable and reliable.

Conclusion:

Consumer behaviour is based on many things. For the service provider or product manufacturer, the system starts from segmentation. A proper segmentation is the base for the success in the long run. For customer, the system starts from the decision process. The buyer decision-making process and the factors that influence the decision process go hand in hand. The decision making process consists of five steps that are problem recognition, information search, evaluation of alternatives, purchase decision and post purchase behaviour. There are several factors affecting the decision of the buyers, such as personality, lifestyle, mood and attitude, perceptions, perceived risk, individual motivations and needs, purchase habits, culture and learning. There are many implications for the marketers as well, the marketers do not have any control over the customer’s motivation, learning, mood and lifestyle.

References

Anderson A., Meethan K., Miles S. (2002), “The Changing Consumer: Markets and Meanings”, New York: Routledge.

Bauman Z. (1982), “Memories of Class: The Pre-history and After-life of Class”, London: Routledge and Kegan Paul.

Clarke D.B. (2003), “The Consumer Society and the Postmodern City”, New York:  Routledge

Furnham A. & Heaven P. (1999), “Personality and Social Behaviour”, London: Arnold.

Katona G. (1960), “The Powerful Consumer: Psychological Studies of the American Economy”, New York: McGraw-Hill.

Lewin K. (1935), “A Dynamic Theory of Personality” New York: McGraw-Hill.

Lois K. Geller, “Response: The Complete Guide to Profitable Direct Marketing”, Oxford: Oxford University Press, 2002.

Loudon D. & Albeit J. (1988), “Consumer Behaviour: Concepts and Applications”, New York: McGraw-Hill.

O’Shaughnessy J (1987), “Why People Buy”,  New York: Oxford University Press.

Patrick De Pelsmacker, Philip J. Kitchen, “Integrated Marketing Communications: A Primer”, New York: Routledge, 2004.

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