Decision Making and Consumer Essay

What major psychological kneades influence consumer solvents to the selling program? * How do consumers make purchasing finiss? * In what ways do consumers stray from a deliberate able close process? Contents Introduction4 What influences Consumer behavior? 5 Cultural factors5 Social factors6 Personal factors7 Key psychological processes9 Motivation9 Perception10 training11 Emotion12 retentivity12 The purchasing ratiocination process14 expressional decision theory & antiophthalmic factor behavioral economics20Introduction The target of merchandising is to meet and satisfy target customers withdraw and want better than competitors. Marketers must fuck off a thorough dread of how consumers look at, chance, and act and g bothop clear value to distributively and every target consumer. Successful marketing requires that companies fully connect with their customers. Adopting a holistic marketing orientation means apprehending customers-gaining a 360-degree view of bo th their daily lives and the variegates that occur during their supporttimes so the right harvest-feasts argon always marketed to the right customers in the right way.So we atomic number 18 going to explore single(a) consumer get dynamism. purpose lesson of Consumer beha-vior Model of Consumer beha-vior figure 1. 1 Fig 1. 1 The starting point for visualizeing consumer behavior is the foreplay-response model shown in figure 1. 1. Marketing and environ noetic stimuli discharge the consumers consciousness, and a cut back of psychological processes combine with certain consumer characteristics to response in decision processes and get decisions. The marketers task is to understand what happens in the consumers consciousness between the arrival of the outside marketing stimuli and the ultimate procure decisions.What influences Consumer behavior? Consumer behavior is the study of how individuals, groups and organizations select, buy, drill and influence of heartfelts, s ervices, idea or experiences to satisfy their needs and wants. A Consumers buying behavior is influenced by cultural, social, and individualal factors. Cultural factors Culture is the fundamental determiner of a someones wants adenylic acid behavior. Each culture consists of littler subcultures that provide more(prenominal) specific identification and socialization for their members. Subcultures include nationalities, religions, racial groups and geographic regions.Virtu wholey all human societies exhibit social stratification, close often in the form of social classes, relatively homogeneous and let divisions in a society, hierarchically ordered and with members who sh are exchangeable values, touch and behavior. Social Classes amphetamine uppers Upper uppers cast down uppers Lower uppers Upper middles Upper middles Middle Middle Working Working Upper lowers Upper lowers Lower lowers Lower lowers Social factors Such as Reference groups, Family and Social roles and statu ses prompt our buying behavior. Reference groupsA persons references groups are all the groups that consent a remove or indirect influence on their behavior * Membership groups * Primary groups * Secondary groups * Aspirational groups * Dissociative groups Groups having a direct influence are called membership groups, some of these are Primary groups with whom the person interacts continuously and informally such as family, friends, neighbors and co proceeders. great deal also start to Secondary groups such as religious, professional and trade-union, which hunt to be more formal and require less continuous interaction. People re also influenced by groups to which they dont belong. Aspirational groups are those a person hops to join Dissociative groups are those values or behavior an individual rejects. Marketers must determine how to reach and influence the groups touch leaders opinion leaders are often highly confident, socially active. Family There are two families in the purchasers life * Family of orientation consists of parents and siblings * Family of procreation the persons spouse and children Rules and status theatrical role consists of the activities a person is expected, each role in turn connotes a statusPersonal factors Personal characteristic that influence a buyers decision include * Age and stage Our taste of food, clothes and recreation is associate to our age. Marketers should consider critical life events or transitions analogous marriage. * Occupation and Economic Circumstances Marketers try to identify the Occupational groups that have above-average interest in their crossing and services and even tailor result for certain Occupational groups. Both harvest-time and brand choices are touch on by economic circumstance 1. Spendable income (level, stability and time pattern) 2. nest egg and assets (percentage that is liquid) 3. Debts 4. Borrowing power 5. Attitudes toward spending and saving * Personality and self-concept Perso nality set of distinguishing human psychological traits that lead to relatively consistent and enduring response to environmental stimuli (buying behavior). Like self-confidence, dominance, autonomy, deference, sociability, defensiveness and adaptability. Brand personality is a specific shuffle of human traits that we can attribute to a particular brand. 1. Sincerity 2. fervency 3. Competence 4. Sophistication 5. Ruggedness * manners style and values purport style is a persons pattern of living in the world as expressed in activities, interests and opinions. The whole person interacting with his/her environment. Life styles are shaped partly by whether consumers are money labored (lower-cost product) or time constrained (multi-tasking). Consumer decisions are also influenced by mettle value the belief systems that underlie attitudes and behavior. Core values go some(prenominal) deeper than attitudes and behavior, peoples choices and desires over the long term. Key psychologic al processes quadruple key psychological process Motivation, Perception, Learning, and stockMotivation We all have many needs at any given time. Needs are 1. Biogenic arise from physiological states of tension such as hunger. 2. psychogenic arise from psychological states of tension such as the need of wisdom. cardinal of the topper-known theories of human motivation Sigmund Freud, Abraham Maslow, and Frederick Herzberg. * Freuds Theory Behavior is guide by subconscious motivations * Maslows Theory Behavior is driven by lowest, unmet need Fig 2. 1 Fig 2. 1 Maslows pecking order of Needs Maslows Hierarchy of Needs * Herzbergs Theory Behavior is guided by motivating and hygiene factors.It has two implications 1. Sellers should do their best to avoid dissatisfiers. 2. The seller should identify the major satisfiers or motivators of purchase in the market and then supply them. Perception Perception is the process by which we select, organize and interpret data inputs to create a meaningful describe of the world. Perceptions are more alpha than reality because perceptions affect consumers existent behavior. People emerge with different perceptions of the same object because of three perceptual processes * Selective attentionSelective attention means that marketers must throw hard to attract consumers notice * People are more plausibly to notice stimuli that relate to a current need * People are more likely to notice stimuli they anticipate * People are more likely to notice stimuli whose deviations are large in consanguinity to the normal size of the stimuli * Selective distortion Is the tendency to interpret instruction in a way that fits our preconceptions. Selective distortion can work to the advantages of marketers with strong brands when consumers distort neutral or ambiguous brand in ecesis to make it more positive. Selective retention We are likely to remember good points about a product we like and forget good points about competing products . It explains why marketers need to use repetition. * Subliminal perception Learning ((When we act we learn)) Learning induces changes in our behavior arising from experience. Learning theorists believe learning is produced by dint of the interplay of drives, stimuli, cues, responses amp reinforcement. Drive is a strong internal stimulus impelling action. Cues are minor stimuli that determine when, where amp how a person response.Discrimination means we have learned to recognize differences in sets of similar stimuli amp can adjust our responses correspondly. Learning theory teaches marketers that they can grade demand for a product by associating it with strong drives, using motivating cues amp providing positive reinforcement. Hedonic bias occurs when people have a general tendency to attribute success to themselves amp failure to outside(a) causes. Emotion Consumer response is not all cognitive amp rational much maybe emotional amp invoke different kinds of feelings. A brand or product may make a consumer feel proud, excited, or confident.An ad may create feeling of amusement, disgust, or wonder. entrepot * Short term entrepot (STM) a temporary amp curb repository of in make-up. * Long term memory (LTM) a more permanent, basically unlimited repository. All the information amp experiences we encounter as we go through life can end up in our long-run memory. Associative network memory model views LTM as a set of inspissations amp link. Nodes are stored information connected by links that vary in strength. A spreading process from node to node determine how much we retrieve amp what information we can truly recall in any given situation.In this model, we can think of consumer brand knowledge as a node in memory with a pattern of think tie-ups. The strength of these associations will be important determinant of the info we can recall about the brand. Brand association consist of all brand-related beliefs , feelings , perceptions , images, exper iences , beliefs , attitudes amp so on that become linked to the brand node. State get mental map State farm mental map Fig 2. 2 Fig 2. 2 Memory process Memory is a very constructive process, because we dont remember info amp events completely amp accurately.Memory encoding describes how amp where info gets in the memory. The strength of the resulting association depends on how much we process the info at encoding amp in what way. Memory retrieval is the way information gets out of memory. 1. The presence of early(a) product info in memory can produce interference cause amp cause us to either overlook or bedevil new data. 2. The time between exposure to info amp encoding has been shown generally to produce only gradual decay. 3. Info may be available in memory but not be reachable for recall without the proper retrieval cues or reminders.The buying decision process The five stage model of buying process 1. Problem recognition 2. Information explore 3. paygrade of alternati ves 4. Purchase decision 5. Post purchase behavior 1. Problem recognition The buying process starts when the buyer recognizes a problem or need triggered by internal or outdoor(a) stimuli. Marketers need to identify the circumstances that trigger a particular need by gathering information from a number of consumers. 2. Information search Information sources * Personal family, friendsetc. * Commercial ads, web sites etc. * worldly concern mass media . etc. Experiential handling, examiningetc. Search dynamic by gathering information, the consumer learns about competing brands amp their features. Successive Sets in Decision reservation 3. Evaluation of alternatives * Some basic concepts will help us understand consumer evaluation process First, the consumer is trying to satisfy a need. Second, the consumer is looking for a certain benefits from the product solution. Third, the consumer sees each product as a hoard of attributes with varying abilities to deliver the benefits. Belief is a descriptive thought that a person holds about something.Attitudes a persons enduring plausive or unfavorable evaluations, emotional feelings, amp action tendencies toward some object or ideas. Attitudes put us into a frame of mind want or disliking an object, moving toward or away from it. Expectancy-value model The consumer arrives at attitudes toward divers(a) brands through an attribute evaluation procedure, developing a set of beliefs about where each brand stands on each attribute. The expectancy-value model of attitude formation posits that consumers evaluate products amp services by combining their brand beliefs according to importance. . Purchase decision In executing a purchase role the consumer may make up to 5 sub decisions Brand, Dealer, Quantity, Timing, and payment method. It is a Step between Alternative Evaluation and Purchase. Non-Compensatory Models of Choice Conjunctive trial-and-error the consumer set a min acceptable cutoff level for each attribute am p chooses the first alternative that meets the min standard for all attribute. Lexicographic heuristic the consumer chooses the best brand on the basis of its sensed most(prenominal) important attribute.Elimination-by-aspects heuristic the consumer compare brands on an attribute selected probabistically amp eliminates brands that dont meet min acceptable cutoffs. Intervening factors move purchase intention between and Purchas Steps between Alternative Evaluation and Purchase Steps between Alternative Evaluation and Purchase Fig 3. 1 Fig 3. 1 Attitudes of others Depends on 2 things 1. The intensity of the other persons invalidating attitude toward our preferred alternative. 2. Our motivation to surveil with the other persons wishes. Unanticipated situational factors may erupt to change the purchase intention (Perceived Risk) 1.Functional risk the product doesnt make out to expectations. 2. Physical risk the product poses a threat to physical public assistance or health of the user or others 3. Financial risk the product isnt worth the price paid. 4. Social risk the product results in embarrassment in front of others. 5. Psychological risk the product affects the mental well-being of the other user. 6. Time risk the failure of the product results in an opportunity cost of finding another satisfactory product. 5. Post purchase behavior Marketer must monitor post purchase satisfaction, actions, uses amp garbage disposal. Post purchase satisfactionSatisfaction is a function of familiarity between expectations amp the products perceived performance. If performance waterfall of expectations the consumer is disappointed if it meets expectations the consumer is satisfied if it exceeds expectations, the consumer is delighted. Post purchase actions Satisfied consumer is more likely to purchase the product again amp will also tend to say good things about the brand to others. Dissatisfied consumer may drop out or return the product. Private actions include decid ing to stop buying the product (exit option) or warning friends (voice option). Post purchase uses amp disposalMarketers should also monitor how buyers use amp dispose of the product. Fig 3. 2 Fig 3. 2 How buyers use amp dispose of the product How buyers use amp dispose of the product Moderating effects on consumer decision making The manner or path by which a consumer moves through the decision-making stages depends on several factors including the level of interest amp extent of variant seeking. * Low-Involvement Decision Making Petty amp cacippos elaboration an important model of attitude formation amp change, describe how consumers make evaluation in both low amp high involvement circumstances. rudimentary route in which attitude or change stimulates much thought amp is based on consumers diligent, rational consideration of the most important product information. Peripheral route in which attitude formation or change provokes much less thought amp results from the consumers a ssociation of a brand with either positive or negative peripheral cues. Marketers use 4 techniques to try to covert low involvement product into one of higher involvement 1. They can link the product to an engaging issue. 2. They can link the product to a personal situation. 3.They ability design advertising to trigger strong emotions related to personal values. 4. They talent add an important feature. * Variety-seeking buying behavior Here consumers often do a lot of brand switching. Brand switching occurs for the sake of variety rather than dissatisfaction. The market leader will try to encourage accustomed buying behavior by dominating the self-space with a variety of related but different product versions, avoiding out-of-stock conditions, & sponsoring frequent reminder advertising. behavioural decision theory & behavioral economicsBehavioral decision theory (BDT) has identified many situations in which consumers make seemingly incoherent choices. 1. Decision heuristic s. 2. Framing. 3. Mental accounting. * Decision heuristics 1. Availability heuristic consumers base their predictions on the quickness & ease with which a particular example of an outcomes comes to mind. 2. interpretive program heuristic consumers base their predictions on how representative or similar the outcomes are to other examples.