Understanding Consumer Behaviour Essay

Understanding Consumer Behaviour We’ll be implying 3 factors of consumer behaviour. The 3 factors are, * Consumer Purchase Decision Process * Consumer Involvement & Problem Solving Variation * Psychological Influence on Consumer Behaviour Consumer Purchase Decision Process The stages in which a consumer passes through in making a decision which product or service to buy is called the purchase decision process. This process consists of 5 stages. They are problem recognition, information search, alternative evaluation, purchase decision and postpurchase behaviour.

Let’s consider a situation whereby our consumer is deciding to buy an Internet TV. Stage 1: Problem Recognition (Perceiving a need) Problem recognition refers to perceiving a difference between a person’s ideal and actual situation that is BIG enough to trigger a decision. This is the stage whereby the thought of wanting the product or service is implanted in the consumers mind which no brands or specifics are thought of yet. In the eyes of marketing, advertisements or salespeople can trigger the consumer’s decision process by showing shortcomings of competing products.

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The Internet TV is a fairly new product in the market, comprising of the components of watching the TV as well as surfing the internet all in one screen. And when there’s a new product in the market, one can assure you that those IT fanatics will have the dying urge to get their hands on the latest IT gadgets. Other than IT fanatics, the average consumer would also buy an internet TV. This is in the case whereby the consumer’s current television or personal computer is broken down or fairly old. What’s better than to buy 1 product which consists of 2?

Therefore, the initial stage is one of the most critical stages in the decision process as the thought of wanting to purchase one must first be instilled in the consumers mind before any other decision can occur. Thus the consumer perceives a need for the product. Stage 2: Information Search (Seeking value) With the initial stage of the decision process started, the consumer begins to search for information about the product. Firstly, scanning past experiences with products and brands owned. This is known as the internal search.

In reference to our product, the customer sources for information on the Internet TV. There are 3 types of sources which a consumer can source from, personal, public or market-dominated sources. This is known as the external search, when internal searching is insufficient. Personal sources would refer to friends, relatives sharing their insight on what they know of the Internet TV. Perhaps one of them owns one and can give his/her valid opinion on the product. Public sources are sources like consumer reports or product reviews that can easily be found online using a search engine like Yahoo or Google.

Market-dominated sources would be advertisements, company websites or point-of-purchase displays at stores like Best Denki, Harvey Norman, Courts or any other electronic stores which carry the Internet TV. This is also the time where brands are considered to the consumers mind but this would only be searching for brands that are selling the Internet TV. Samsung would have to get the attention of the consumers via the market-dominated sources like advertising or company’s website.

Therefore, this stage is where the consumer gathers information of the Internet TV and since it is a new product in the market, more time might be spent gathering information as compared to other products. Stage 3: Alternative evaluation (Assessing value) This is the stage clarifies the problem for the consumer by suggesting the criteria to use for the purchase, yielding brand names that might meet the criteria as well as developing the consumer value perceptions. The evaluative criteria represents both the objective attributes of the brand and subjective ones to compare the different products and brands.

This aids consumers by viewing a summary of the brands that carry the Internet TV and its specifics. Following from that would be the consideration set which is the group of brands that the consumer considers acceptable among all the known brands to the consumer. The few brands that carry the Internet TV currently in the market would be Sony, Samsung and LG. Therefore, this narrows down the consumer’s choices of brands to consider purchasing the Internet TV leading them closer to the next phase which is the purchase decision.

However, different consumers have different criteria’s and this leaves the decision to pick Samsung’s Internet TV as their choice ultimately theirs. Stage 4: Purchase Decision (Buying value) To explain in simplicity there is only 2 decisions in which the consumer has to make, WHOM to buy from as well as WHEN to buy. Let’s assume that the consumer ultimately decides to purchase Samsung’s Internet TV. Whom to buy from would rely on past experiences such as whether the consumer owns other Samsung products, Samsung’s return policy and terms of sale.

When to buy can vary from the consumer’s financial circumstances to the store’s ambience. An example would be, if the store has a great ambience and the salesperson’s customer service is good, the consumer might actually just buy on the spot. Therefore, the purchase has been made but the final stage will decide the consumer satisfaction of his/her decision. Stage 5: Postpurchase Behaviour (Value in consumption or use) The final stage is evaluated by comparing the consumer’s expectations to the product and whether he/she is satisfied or dissatisfied.

If the consumer is satisfied then the customer would likely visit the same store for further purchases or continue buying products from Samsung. However, if a customer is dissatisfied, a study was shown that the average dissatisfied consumer would complain to nine other people which will affect people’s view of Samsung products and its Internet TV. Summary There are a lot of factors to take into account when a consumer decides to buy a product or service. Examples would be how Samsung advertises their internet TV and how it is displayed at stores; the design has to appeal to customers as well.

But ultimately, it is how influenced the consumer is to make a decision in choosing the brand and product. Consumer Involvement & Problem Solving Variation At time, consumers do not entirely engage in the 5-stages of the purchase decision process. Instead, they skip one or more stages depending on the level of involvement which relates to the significance of the purchase to the consumer. High involvement purchase situation will contain at least one of these characteristics: 1. Product is expensive 2. Have a serious personal consequences 3. Affect one’s self image

The Samsung Internet TV would be considered as a high involvement purchase. WHY? Firstly, as said before, it is a new product in the market so the consumer involvement is high in terms of extracting important information from the net about the product. Secondly, the product is fairly expensive. Lastly, if one purchases a really cheap Internet TV which is brand less or not known to other people due to its price or reputation, one might be considered as “acting rich” or being “cheap”. Moving on, the only substitutes would be purchasing a TV and PC separately or choosing a different brand.

In order for consumers to notice Samsung’s Internet TV as the more supreme one, Samsung will have to depend on advertising. Such advertisement’s that Samsung has done would be on TV commercials and even on transportation vehicles such as on buses, trains. Low involvement purchase situation refers to products that do not require any or much decision making. Examples: Shampoo, toothpaste and other miscellaneous items found at home. This leads to introducing the 3 levels of problem solving. * Extended problem solving * Limited problem solving * Routine problem solving Extended Problem Solving

In extended problem solving, all the stages in the consumer purchase decision process are involved. This includes the time and effort made on finding external information. In addition, this problem solving exists in high involvement purchase situation which is our product, the Samsung Internet TV. The following table shows the Samsung Internet TV as the product in reference to the characteristics of the consumer purchase decision process and problem solving. Characteristics of the consumer purchase decision process| Extended Problem Solving| Number of brands examined| Few|

Number of sellers considered| Many| Number of product attributes evaluated| Many| Number of external information sources used| Many| Time spent searching| Considerable| Explanation: Number of brands examined – This is stated as “few” because only 3 known brands are currently selling the Internet TV. Needless to say, there are limited brands selling them. Number of sellers considered – There are many electronic retail stores that carry the 3 brands of Internet TV. Some examples would be Courts, Best Denki etc

Number of product attributes evaluated – Since this product comprises of two types of products. There is a lot of attributes to consider and evaluate. Some key attributes would be the size of the internal memory within the CPU (Central Processing Unit), the clarity of the television with regards to the wide resolution of the screen. Number of external information sources used – With this product being new in the market as mentioned before, a load of external information should be found because it is hard to collect data on a fairly new product such as this.

Time spent searching – As mentioned in the previous statement, new information is hard to find via the internet or on review websites. Thus, a considerable amount of time will be spent on searching for the information. The last topic to be discussed in Chapter 5 would be the Psychological Influences on Consumer behaviour. Influences on Consumer behaviour There are 4 types of influences that affect the consumers behaviour. 1. Psychological influences 2. Sociocultural influences 3. Situational influences 4. Marketing mix influences Psychological influences * Motivation

Motivation is the energizing force that stimulates behaviour to satisfy a need. Psychologists pointed out that there is a hierarchy of needs as shown below. Source: http://www. union. umd. edu/GH/basic_needs/index. html Based on the needs theory, the Samsung Internet TV will probably fall under esteem needs with the main intention to boost one’s self-esteem by showing off to his colleagues or friends. * Personality Definition: A person’s consistent behaviours or responses to recurring situations. In reference to our product: A simplistic explanation would be an IT fanatic and the new Internet TV launching.

As one knows, an IT fanatic will constantly purchase any new technological gadget that is launched in the market. Therefore, the fanatic’s personality will repeat itself when the Internet TV is launched. * Perception Definition: The process, by which an individual selects, organises and interprets information to give meaning to the environment. In reference to our product: People might perceive that having an Internet TV as a luxurious item to have in the living room or in the comfort of one’s bed. Therefore, it might be one of the items considered to be purchased if ne has sufficient money to purchase one. * Learning Definition: The behaviours that result from repeated experiences and reasoning In reference to our product: Since the Internet TV is a new product, one can only draw experience from purchasing new IT products released into the market and judging from there. * Values, beliefs and attitudes Definition of attitude: A “learned predisposition to responds to object or class of objects in a consistent favourable or unfavourable way” It is also shaped by one’s values and beliefs. In reference to our product: Suppose thriftiness is one’s personal value.

When deciding to buy an Internet TV, the consumer’s personal savings becomes important in deciding whether to purchase one or not. * Lifestyle A person living in a very prestigious or lavish lifestyle would buy the Internet TV due to the habit of having the latest technological gadgets in the house. Sociocultural influences * Personal influence * Reference Groups * Family * Social class * Culture and subculture Situational influences * Purchase task * Social surroundings * Physical surroundings * Temporal effects * Antecedent states Marketing mix influences * Product * Price * Place * Promotion