Home/Essays Examples/Business/Factors That Affect the Consumption Behavior of an Individual Consumer

Factors That Affect the Consumption Behavior of an Individual Consumer

Executive summary

This paper seeks at analyzing the consumer behavior to determine the factors that affect the consumption behavior of an individual consumer. It analyses the process that a consumer undergoes in the process of making decision. The relationship between the decision making and the selection of store that an individual settles at to be the source of supply for a particular brand of products is also considered. The process of perception, its influences on consumer behavior, decision making process, relationship between perception and the marketing stimuli are also analyzed. It also analyses the changes in trend that is being experienced by the consumers around the world.Other factors that are considered are the effect of personality, situational influences and lifestyle in the decision making process.

Introduction

Consumer behavior refers to the decision making process that a consumer undertakes in the process of considering the goods and services to purchase.

Process Of Consumer Decision Making

There are six phases that a consumer undergoes in the process of making decisions. They include;

Problem recognition

This is the first step in the consumer decision making process. Consumers desire to purchase a particular product originates from the need to satisfy a certain need.

Information search

After positively identifying the problem, the consumer involves himself with intensive search for information regarding the product to be purchased to establish the various alternatives available.

Product evaluation phase

In this phase the consumer analyzes the various alternatives that he receives to determine where to make his purchase from.

  • Purchasing decision –this is where the consumer has already settled at a particular product and its characteristics such as packaging and method of purchasing used.
  • Purchase. At this phase, there may be time lapse from when the decision to purchase is made and when actual purchase is made.

Post purchase phase evaluation

After purchasing the product and using the product, the consumer evaluates whether the product solved the intended problem. It involves determination of the level of satisfaction obtained.

Relationship Between The Complex Decision Making And The Choice Of Store

The marketer can stimulate the problem for the consumer to desire a particular product. his can be through provision of information on where the customer can obtain the product. The consumer compares the various stores to settle at the best.

In the process of searching for information regarding the desired product, the consumer will settle at the store where comprehensive information regarding the product is provided. At this stage the marketer has to ensure that he provides timely and relevant information. The choice of store can influence the product evaluation phase in terms of variety being provided to cater for the various consumer preferences. The consumer choice of store will also be influenced by whether the marketer conducts a post purchase follow-up for the customer, if he does then he will develop customer loyalty.

Relationship between the brand, purchase and post purchase evaluation

The consumer selects a brand that will result into satisfaction and derive maximum value. The store that is a reliable source in terms availability of the desired brand becomes the choice the consumer decides to obtain the goods from. In the purchase phase, if the brand is available, then the time lapse between the purchase decision and the purchase is reduced. The post purchase evaluation for a particular brand includes the chances of the customer obtaining warranties, and guarantees. He also evaluates to determine whether he made the right decision regarding the purchase of a particular brand.

Societal implication of brand and store loyalty

There is a strong relationship between the brand and the store from where a customer obtains his products. If the consumer is certain of obtaining his desired product reliably, the implication is that he will make repeat purchases from the particular store. The brand loyalty translates into store loyalty as the customer begins to identify himself with the organization from where he obtains his products. In the future he will not consider switching his source of the product but will recommend the store to others leading to increase in sales which the first step towards profitability, Jose &Ruyter, 173).

This implies that the relationship between store loyalties is enhanced by the satisfaction that the consumers obtains from a given brand associated with the store.

Perception Process

Perception refers to how an individual interprets a particular stimuli received from the environment and derives a particular meaning.

Exposure

This refer to the degree to which and individual comes into contact with the stimulus. In creating perception regarding a product, a marketer can do so by ensuring he supplies information by use of commercial advertisements, or posters. The process of exposure is either random or deliberate

Organizing And Interpretation

This involves streamlining the information received so that it can help him in making a clear interpretation to derive the correct meaning.

Selecting

In this stage the consumer chooses the stimuli that will guide him in deciding on how to behave in deciding consumption.

Comparison Of Marketing Stimuli And Consumer Perception

Studies have shown that marketing stimuli affect consumer perception. Consumers have a choice on whether or not to attend to a particular stimuli depending on whether the stimuli is pleasant.They may not have a choice to escape a certain stimuli that they perceive to be unpleasant and hence their attention will be got. This concept is utilized when repetitive advertising is used to change the perception of the consumers and also create relevance of the product. This means that for a marketing stimulus to be successful there is needed to consider the perception formed.

Pricing as marketing stimuli also affects the perception of the consumers. A price drop may signify that the consumers will have a positive perception leading them to increasing the volume of purchases.

Situational Influences In Decision Making

Apart from the individual variable such as age, gender, nationality, employment, personality and religion, an individual decision is influence by variables that are specific to a certain situation. Several situational variables are examined, (Ford &Richardson, paragraph 2).These include;

The Referent Group

This is the group of individuals that affects an individual in making the decision.This category of individual are the role model of the individual in making decisions regarding consumption.

Code Of Conduct

This refer to the ethical behaviors that are expected in a certain settings such as organizational settings.This means that an individual is forced to make decisions that meet the ideals that have been set by a given group. These decisions may either be complex or simple. This shows that organizational effects greatly affect the decisions of an individual.

Social Conflicts

In a social setting, an individual decision for example about consumption is affected by the society’s ethical beliefs of what is moral and what is immoral. This means that an individual cannot consume products or services that are defined as unethical by the norms that rule the particular society.

Rewards And Sanctions

An individual decision may be affected by the presence factors that motivate them such as the reward or punishment that goes with the out come.

Nature Of Situational Influences

According to Sonja Rajas, situational influences occur in various forms, (733).These includes the following;

Physical Form

These include variation in certain feature that affects an individual in deciding where to make their purchase from. Such features include the location of the store, color, lighting, and scent amongst others. These act as stimulus for the consumer to be loyal to a particular store. For the consumer store atmosphere forms the perception of the consumer regarding the quality of the surrounding.

Social Component

This component of situational influence asserts that a consumer decision to make a purchase is affected by the presence of others, their characteristics and their roles. This is due to the interaction that occurs.Marketing research has proved that shopping in company of other people leads to increase in the purchasing outcomes. This means that consumers who do their shopping in company of others tend to make more purchases in comparison to solitary shoppers, (Sonja, 735).

Temporal Perspective

This refers to the time aspect of purchase.These includes specifications such as time of the day or the season when purchasing occurred. If the consumers do not have enough time to make their purchase then their level of budgeted or unbudgeted purchase will be reduced. If the customer has enough time he can be able to make a good product information search from a particular store. This can lead to development of customer loyalty since the customer has a chance to window shop the various merchandise within the store, (Sonja, 737).

Usage Of Situational Variables In Marketing Strategies

The marketer can capitalize on the situational variables in the formulation of his marketing strategies in several ways:

For the situational variables he can ensure that he uses a channel of distribution that will ensure the goods are available in the entire market and at convenient location for various customers. Convenience can also be enhanced by use of online marketing technique to provide the customers with information concerning the best shopping stores. This will contribute towards the reduction in time factor which may be limited for the consumer.

The branding strategy should be inclusive of various colors to meet the various tastes and preferences of the consumers.

The packaging strategy should be inclusive of various sizes to cater for the customer of different income level. This component of situational influence will also affect the pricing strategy of the marketer which can be a basis to implement market segmentation.

Customer Loyalty Begins With Experience”

By this Regis was illustrating the need for consumer satisfaction in building customer loyalty. To create customer loyalty there is the need of the marketer to ensure that the customers are satisfied in the process of consumption. If there is occurrence of disappointment in the process then it means that the customer will not make a repeat purchase in that particular store. This for the marketer translates into the need to develop a marketing strategy that will gear towards ensuring customer satisfaction. This shows that for customer loyalty to be developed a certain path of relationship has to be established gradually right from the customer. This is because the customer’s intention in deciding the consumption of a particular product is to derive maximum satisfaction and value for his or her money. If the customer experiences this by making a purchase of a certain brand from a particular store, then he perceives that justice is being done to him.

Factors influencing the consumer decision making process.

The consumer decision making process is affected by three main factors that include personal, social and psychological factors,

Personal factors

These are factors that are unique to a particular person. They are categorized into demographic factors which include race, gender and age. They also include the role of various members of the family in terms of who decides against the purchase of particular commodities. For instance decisions related to electronics are left for the husband while those of cutlery are for the wife. The young and the old generations make purchases of products for different reasons.

Psychological factors

These include factors such the consumer motives, perception, attitude, ability and knowledge. According to Cocanougher &Bruce, motive refers to the force that energizes an individual towards satisfying a given need. Understanding of motive can help the marketer in formulating marketing strategies, (380).Learning and knowledge leads to a change in the consumer behavior due to the increased experience of the consumer.

Social factors

The consumption decision is influenced by various social factors such as culture and subculture, reference group, social class. According to Cocanougher &Bruce, reference group refers to a group that an individual identifies himself with to an extent that most of his consumption decision is inline with the group,(paragraph,1).social class refers to a group of individuals who have the same rank in terms of occupation income, race, ethnic group amongst others. This group has a characteristic of a defined consumption pattern. The culture and sub-culture refers to values, opinions, and attitudes that are propagated by a given group to various generations. Morrison stipulates that culture affects marketing through definition of products that are either acceptable or not, (paragraph 10).

Role of attitude in developing Marketing strategy

Attitude refers to the opinion formed towards a particular product. The attitude may be either positive or negative depending on the knowledge gained regarding the product.

Individual’s attitude is attained from internal or external sources. The internal sources may include personal experience while the external sources include learning from others in the process of interaction. The consumers form a particular attitude about a given firm and its products. The marketer should appreciate the effect of attitude in the formulation of marketing strategy.

Attitude reinforcement and change in consumer behavior

The marketer can influence the attitude of the marketer leading to a change in consumer behavior towards a certain direction. The marketers aim is to positively reinforce the consumer behavior towards change that he will benefit him due to continued consumption of the product. Various strategies should be implemented to have an impact on the consumer behavior. These may include the use of trade, quantity and price discount while determining the price of the product.

Use of after sale services and guarantees helps in the transformation of consumer attitude towards a product. Attitude can also be reinforced by ensuring that the communication between the firm and the consumer is enhanced. This will enable the consumers report complaints that may result and effective addressing them leading to the consumers developing trust regarding the firm and its products.

In the event of a new product being introduced into the market, the firm can reinforce the attitude of the potential consumer by use of free samples as a marketing strategy. This will enable the consumers develop a positive attitude before their commitment to the product. Through this, the product or service can effectively penetrate the market.

Changing attitude of consumer towards social issues

In the recent past, the consumers have recognized the need of the organizations to address social issues that affect the society. Consumers have realized that businesses are contributing to some of the current problems experienced such as environmental pollution. This has resulted into a change of consumer attitude towards firms that do not involve themselves with corporate social responsibility.

Consumers are also focusing on issues that affect the society due to some consumption behavior of certain products such as alcohol, use of contraceptives and cigarettes. This change of consumer towards social issues have forced firms to adjust their marketing strategies.For example firms producing alcohol have been forced to put age restrictions of alcohol consumption in their adverts. This change of consumer attitude is aimed at bringing positive social change.

Effect Of Lifestyle And Personality In Decision Making

Lifestyle refers to the different course that individuals take concerning various aspects of their lives. The lifestyle of customers is affected by the environment where they life hence affecting their consumption patterns in the long run. In the recent, lifestyle of many individual consumers have been shifting their lifestyles to include a great degree of autonomy in their consumption patterns. This has resulted into a change of tastes and preferences thus their consumption decision has become very personal. For instance there has been a development of a pattern that associates healthy lifestyle with healthy food.

Personality on the other hand refers to all the innate characteristics that are unique to an individual. In marketing personality affects the consumer behavior due to the diverging personalities that exist amongst the consumers. For instance, the lecturers have got different personality from the secretary and hence he will make decisions that match his personality. Differences in personality results from the various factors such as economic status, occupation, level of education, social class amongst others. According to Harold, it has emerged that personality is a major determinant of consumer’s behavior, (409).

Changing Lifestyles Of American And Global Consumers

There has been an emergence of a trend that represents changes in consumer attitudes, values resulting into new behavior. Some of the changes include the following;

Income complexity

With the current economic down turn around the globe, there has been a change of lifestyle based on income. The low income groups are seeking a more luxurious lifestyle while their budget is constrained while the higher income group is embracing a more refined consumption behavior by paying little emphasis on luxurious lifestyles.

There is also a challenge in the maintenance of balance between work and life. This has affected the feeding habits of the consumers in the work environment with more emphasis on light foodstuffs.

In terms of age there has been a shift in the consumption behavior across the different generations. This is because the older generation is acting as younger consumers and the young generation as older consumers.

The lifestyle as a factor that contributes to consumption decision making is taking a new trend in the US where a large percentage of consumers are appreciating consumption of products that have been recommended to them by their friend or relative through word of mouth. This trend shows that campaigns through word of mouth could become more effective in changing the consumption behavior of individuals and hence the lifestyle.

The lifestyles have also changed in that the there is greater need of product or service customization. This has led to most of the customers in the US and other countries around the globe demanding products that are produced to meet their lifestyle and in satisfaction of their needs.

A trend has also emerged where the consumers are demanding brands that match the different attitude of the consumers and their perception about life. Instilling these attributes into the product is due to the increased need of autonomy by the consumers in making their decision.

There has also been an appreciation of considering social issues in the various lifestyles of consumers in the European and the US in making consumption decisions. Research has shown that there has been a preference of less consumption of unethical products. There is a realization of the fact that it is of much importance to purchase socially acceptable products.

Theories Of Personality

Psychoanalytic Theory

According to Freud’s theory of personality, he asserts that the personality of an individual is determined by three main factors. These factors include the id, ego, and the super-ego. These factors interact to produce a certain personality.

The id is the personality component that is present in and individual from birth.This personality characteristic is unconscious. This component is not developed.

The ego component is the one that is responsible for dealing with things in their real nature. This component is responsible for the development of the id component.It functions in the conscious, preconscious and the unconscious components.

The super ego represents the traditional values and it is evident in the moral concept of an individual. This component provides the guidelines for making good judgments. According to Freud, this component is composed of three components i.e. the ego ideal which includes the rules guiding good behaviors that are socially acceptable. The conscience represents information that is viewed as unethical, (paragraph 10).

Cognitive Theory

This theory asserts that an individuals mind is the determining factor in his or her emotion and hence the personality. These theorist believe that thoughts come from feelings which determine the behavior.By changing an individuals thoughts, one can change his or her mood and hence the relationship with others, (Personality Synopsis I think therefore I have a personality, praragraph 1).

Behavioral Theory

This theory asserts that the personality of an individual results from the interaction of the individual with the environment. This theory rejects the assertion that an individual personality is determined by thoughts and ones feelings.

Bibiliography

Alison, D.M., “Links between organizational and customer variables in service delivery: Evidence contradiction and challenges.” International Journal of service Industry Management, vol., 15, issue 4, pp.332-350. Web.

Cocanougher, A.B. & Bruce, D.G., “Socially Distant Reference Groups and Consumer Aspirations.” Journal of Marketing Research, vol.8 (1971), pp.379-381. Web.

Sonja R., Ford &Richardson, 1975, “The impact of situational factors on purchasing outcomes in Croatian Hypermarket Retailer,” Web.

Personality synopsis, I think therefore I have a conscious, Web.

Harold, Freud &Wagner, About.com, “structural model of personality,”Web.

World advertising research centre. “Consumer Behavior Changing Trends,” Web.

Jose &Ruyter, “The relationship between store image, store loyalty and customer satisfaction,”vol.32, issue 6, pp.499-513.1998. Web.

Microsoft Business Solutions, Growing More Profitable With Your Customers. Web.

Mowen, J.C & Minor, M., Consumer Behavior. New Jersey, Prentice-Hall Inc (1998).

Hallowell, R., “The relationship between customer satisfaction, customer loyalty and profitability: An empirical study.” International Journal of Service Industry Management, vol.7, issue 4, pp.27-42. Web.