Consumer Buying Decision Process Marketing Essay

Consumer Buying Decision Process Marketing Essay Behavior is defined as any activity, physical or mental, performed by an individual. Studying consumer behavior can help enterprises understand what consumers need, so they can create, develop, and improve their products and marketing strategy. The basic questions that the marketers have to understand about the consumers are what products they want to buy, where they buy, when they buy, and how much they want to buy. Moreover, they would understand what factors that impact to consumer behavior and their buying decision (). Purchasing goods and services depends on the consumers needs, preferences and purchasing power (Kahn, 2007). According to Solomon (2004), the consumers also buy products as an experience (emotive or aesthetic reaction), as an instrument of integration, as a classification scale (how we are ranged in the society), or as a game. Voice of the customers is very important because businesses do not know all what consumers want to get from their products and services, and it can lead products fail. So product research would help businesses improve existing product and to identify gaps in current products (). However, the businesses need to concern in the long term, because the opportunity of today for a trend is not necessarily than tomorrows (). 2.5 Consumer buying decision process The decision-making process starts from the mind of consumers. This process includes the consumer first understanding what they need. Then, they will search for information while considering internal and external factors. Next, they will have an evaluation and make a selection, and eventually make a purchase (see figure 1). The post purchase behavior can give companies information about whether or not their products are successful. Sales and after sale services can also have an effect on consumer satisfaction and lead to repeat purchases (see figure 2). It shows that the purchasing process starts from the consumers needs and finishes with their satisfaction. The marketing strategies will be successful if they have the best solutions to solve the consumers problems (Kahn, 2007). Companys total product Competitors total product Consumer decision process Superior value expected Sales Perceived value delivered Consumer satisfaction Fig. 2 Creating Satisfied Customers (Source: Kahn 2007) Problem recognition Information search External and internal Evaluation and selection Store choice and purchases Post-purchase Behavior Fig. 1 Decision Process (Source: Kahn 2007) Consumers have different shopping behaviors. There are many stores and many goods and services that consumers can choose from while they are shopping. The places to buy products are different, and consumers choose where they want to buy based upon what kind of products they want to buy. Some consumers are loyal to certain stores, while others are considered store switchers because they are willing to buy similar products in more than one type of store. There are many factors that can affect the consumers decision to select where to buy products. Price is one of the main factors that influences buying decisions with some consumers preferring to shop in stores that have everyday low prices (EDLP), and others that like promotion prices (HILO) (Bell, Bucklin Sismeiro, 2000). Stavkova, Stejskal, and Toufarova (2008) studied about the factors that influence consumer decision to buy various products. From their study, they found the most important factors that influence consumer behavior for 10 different types of products. Each of the product types showed different factors. For example, for food and non-alcoholic drinks, the most important factors are necessity of need, quality, and former experience. For clothing and footwear, the factors include quality, products characteristics and parameters, and design of product. For transport, the important factors are necessity of need, price, and quality. Lorinczi, Bacs, Nagy (2009) studied about factors that influences consumer decision on carbonated soft drinks consumption, and the result of their study showed that, flavor is the most important factor that influences consumer decision. Trademark and price are also important factors, but health and speed of purchase are not really important for them. Basically, food and drink are related to what is important to the consumers such as their survival, health, life expectancy, personality, lifestyle, and family (European Commissions, 2009). According to the (), there are 3 factors that influence the consumer food choice decision making-process; Properties of the food, person-related factors and purchasing environmental factors, while communication is related with all these factors. It is highly influence by social factors and increasingly motivated by necessity (European Commissions, 2009) However, we can still assume that consumer food choice is influenced by prices, quality, and income, but quality of consumers perception today are impacted from sensory, heath, process and convenience (Grunert). Sensory are taste, appearance and smell. However, the consumers would know taste of products only after purchase, so they use signals from brand, price, and quality to predict the taste experience. Health is related to information communication, signals, and learning history of the consumer. The consumers are interested more in process of making products such as GMO-free and Organic. And convenience is related to saving time and energy of consumers. 2.6 Factors influence consumer behaviors Consumer behaviors influence by socio-demographic characteristics of the individual consumer or marketing activities (). According to Kotler Armstrong (2009), there are external factors and internal factors that influence consumer behaviors. External factors are cultural and social, while internal factors are personal and psychological (see figure) Cultural Culture Sub-culture Social class Social Reference Groups Family Roles Status Personal Age life cycle stage Occupation Income Life style Personality Psychological Motivation Perception Learning Beliefs Attitudes Buyer behaviors Source: Kotler Armstrong (2009) 2.6.1 Social and Cultural Factors Each market may be unique in term of social norms and tradition. Culture is a key determinant of the consumer behaviors (Wallance, 1965; Jung Kau, 2004). Culture provides us with what we know to be true and knowledge of how things are (p.25). They are usually support by learning from generation to generation, changing only slowly over time. According to Jung Kau (2004), brand loyalty and decision making are found difference in consumers across sub-cultures. Food products are particularly sensitive to sub-cultural influences, it cans differences between nations or groups of nations. Difference cultural and countries might influence difference in knowledge, information, and attitudes on acceptance of foods (14). A group is defined as two or more individuals who share a set of norms, values, or beliefs (p.199). Reference groups influence consumer behavior by their information of knowledge, experience, recommendation, communication, and word-of-mouth. According to Riedl et al. (2002), word of mouth promotion leads to successful and high margin of consumer products. Primary group are friends, neighbors, colleagues, and family (e.g. family size and age of children) while secondary groups are more formal such as social and sports clubs (p. 199). According to (p.299), the family is a major influence in the learning process for young people. It also can be comparative influence such as teenagers want to accept to peer groups and to be a part of their groups (). For teenagers, it is also comparative influence that they want to accept from their peer groups or wish to be a part of them. Stead et al. (2011) found that young people used foods and drinks choices for judging others, accepting friendship and peering norms. According to Sylow Holm (2009), more than its nutritional and calorific content, food also can be a socio-cultural product. In many groups and cultures, choosing or rejecting foods and drinks depends on their individual, status, society, and image (eg Fox Ward, 2008; Tivadar Luthar, 2005). Society influences healthy eating (Stead et al, 2011). The respondents of their research cared about their image and peer groups. One group of respondents who play sport said that healthy eating can increase their sporting ability. Most of groups know that if they become obese it would damage their image. So it lead some of them have unhealthy behavior like skipping meals. However, some of respondents showed that healthy eating did not important for their image, because they prefer junk and other unhealthy foods. They also found that some respondents think that people who selected healthy foods such as fruits, yoghurt, and water in their meal are untrendy. 2.6.2 Personal factors According to Kotler Armstrong (2009), personal factors which influence consumer behaviors are age and life cycle stage, occupation, income, lifestyle, and personality of the consumers. In this study we will focus on the consumer lifestyles. Lifestyle is the way an individual choose and uses possessions (p.23) (Engle, Kollat Blackwell, 1973) or also means personals pattern of living as show in their opinions, interests, needs, activities, and value which can show who they are, and also can show their self image and their culture (Reynolds Wells, 1977). Lifestyle is closely related to consumer behavior. It is as motivator of consumer behavior and basic source of the information (p.23). The consumers consume products which can respond their needs and it also can change to their lifestyles. Socio-demographic impacts to consumer behaviors ( ), According to (), age is related to buy of different kinds of functional foods and difference in consumer views(6,7,8). For gender, men and women tend to buy different types of products and use different criteria when choosing want to buy. They found that women are willing to pay a higher premium of products with health benefits. Also they found that age, gender, education, occupation, and income, can show purchasing pattern. For example, young-single spend more on clothing entertainment, fast food than other groups, while couples, families paying for food. According to research of Safe food (2009), they found that smoothies were more popular among women, younger age group and higher social classes. 2.6.3 Situational influences Situation is defined as set of factors outside of and removed from individual consumer as well as removed form the characteristics or attributes of the product (p.58). Managers and marketers should beware about consumer situation also. There are many kinds of situations that can influence consumer behaviors. According to (), situation variable are physical surrounding, social surrounding, temporal perspective, task definition, and antecedent states (p.58). For example, generally consumers prefer low price of products but sometime they want what is more convenient and willing to pay in higher price. The table below shows the sample of situations in nonalcoholic beverage consumption, they show that in different situations they might consume different kinds of drinks. For example, during the summer, they would prefer water-based waters which sour and can quench their thirst. Situations Context-specific ideal beverage clusters Desired Attributes During the summer Water-based drinks Not relaxing Sour Thirst quenching During the winter Hot adult drinks Served very hot Good for my health Energy giving For breakfast Juices Primarily for children Good for my health Energy giving For lunch Hot adult drinks Served very hot Best with food Not thirst quenching When friends com for dinner Hot adult drinks Primarily for adults Sour Light When you are thirsty Water-based drinks Not relaxing Sour Thirst quenching When you wish to relax Water-based drinks Relaxing Sweet Not thirst quenching When you need a pick-me-up Milk-based drinks Served very hot Good for my health Energy giving Source: Hustad, Mayer, Whipple (1975); Hawkins, Coney, Best (1980) 2.6.4 Psychological Factors Psychological factors that influence consumer behaviors are motivation, perception, knowledge, beliefs, and attitudes. (See figure). Studying about consumers helps businesses improve their marketing strategies by understand consumer psychological that how the consumers think and feel. Consumer knowledge and information influence decisions. Knowledge and interested about health and nutrition is very important. () show that level of consumer knowledge about food ingredients and consumer understanding of relationship between nutrition and health are important to consumers attitude towards of functional foods. Studied of () showed that tendency to read the nutrition information on food products was found to be important factor affecting the purchase of omega-3 products (9). Learned in their lives, personal experience, experience of others, this opinions lead to beliefs can lead positive or negative attitude which can be difficult to change. Beliefs and attitudes believe in benefits of functional foods was found to be the main positive determinant of acceptance of functional foods (15). Moreover, Perception of healthiness products and health and nutrition claims found in positively influence purchasing choice (). Perception of information consists of facts estimates predictions and generalized relationships that are used by consumers to recognize and solve problem (p. 264). 2.7 Consumer Motivations Motivation is viewed as an inner force and refers to wish, feeling, and need (p. 305). Consumer motivation is known as a driver of behavior that brings consumers to purchase the products (Kim Jin 2001). Consumers are motivated to buy products when they believe that those products will satisfy their most immediate (). Consumers start to look for more than just basic functions from their product differentiate by adding value. They can add value to their products by changing or transforming their products from their original to more valuable state (Coltrain, Barton Boland, 2000) to reach more consumer satisfaction. They also can increase the products value by services. Consumer motivation and decision making process are influenced by products and services, level of importance or interest ().Motivation is an important factor that impact to consumer buying decision of certain types of products especially healthy food (). According to Hoo Munusamy (2008), there are four factors that can influence consumer motives: social factors, situational factors, psychological factors, and marketing mix. (see figure) However, this research the researcher will only study about marketing mix factors. 2.8 Factors influence consumer motivations Social Culture Sub-culture Social class Reference groups Families Situation Physical features Social features Time Task features Current conditions Psychological Product knowledge Product involvement Marketing mix Products Price Place Promotion People Consumer Motives Figure: Factors influences Consumer Motives 2.8.1 Marketing Mix The marketing mix in this study is defined as 5 Ps which are products, prices, places, promotions, and people. Each element of the marketing mix can affect to consumers in many ways (Peter Donnelly, 2007). Marketing mix uses in company to deliver marketing purpose and control variables in a market target (Kolter, 2000). The businesses need to create a successful mix of the right products, sell in right place, right price, and the most suitable promotion. Product Product is defined as everything that the businesses offer to the consumers in an exchange process can be in a form of physical good, service or both ().According to Borden (1984), product is about quality, design, features, brand name, and size. Service are closely relates and will both contribute to consumers satisfaction, for example, buy food in super markets quality of service provide by super market will also affect their level of satisfaction and purchasing decisions. Health and nutrition claims become important factors that influence consumer buying behaviors of foods and beverages (16). Branding does not necessarily mean food products would taste better to those not used to the brand but the brains of those who recognize a brand tell them other wise. However, taste is very important for them also. According to Lorinczi, Bacs, Nagy (2009), they found that if the consumers like the flavor of products such as carbonated soft drinks, they do not care about health, even they aware that it is unhealthy, and aware of its potential and negative physiological impact. Safe food research (2009) agreed that most of people drink smoothies because they like the taste more than healthy and increase their fruit intake (Safe food, 2009). The businesses need to concern what product means to the consumer. Physical appearance, packaging and labeling information of product also can motive consumer buying decision. Moreover, Peter Donnally (2007) show that differentiate their products from competition and create consumer perception that product is worth purchasing. In term of specific products, consumer motivations seem highly dependent on the situation (p.325). Adding value to products can enhance famers businesses (). The consumers concern more about nutrition of products and convenience, so it is an opportunity for businesses to create or improve their goods and services. One of the samples of adding value from fresh fruits and vegetables is transform them to other kind of products such as jams, jellies, and other preserves, cut and frozen vegetables, including dried herbs which made for medicinal. The businesses need to concern about consumers needs in quality, packaging, and variety of products which are more important than price (Connor et al.; Benny, 2005). Branding and packaging also can increase value and market development for businesses. Benny (2005) agreed that value added goods provide better handling and results, he studied about value added products from green tea extracts and found that the standardized extract of green tea can reduce obesity and prevent the disease and it can change in a form of capsules, but it has a bitter taste and can consume not much. However, they can expand the green tea extracts by transform it to a component of cosmetics, ice-creams, and others and can add some vitamins and herbal to have more value and nutrients. Value-added also can be production methods such as organic, grass-fed, hormone free and others. It showed that creative, knowledge, and differentiate can motive consumer interest and buying decision. However, value-added products can fail if the products can not respond to consumer needs and consumer satisfaction. Price Price is related to satisfaction, brand loyalty purchase frequency of the consumers (Kalyanaram Little, 1994). The consumer become more knowledgeable as to its quality and value (Zeithaml, 1988), consequently when the consumers better understands the value of the product, they are more sensitive to changes in value (e.g. if the price were to increase) which may affect the intention to purchase (Chang Wildt, 1994; Lodorfos, Mulvana, Temperley, 2006). According to Lin, Li, You (2011), a profitable price made by businesses to match segmentation target, create enough attraction and competition. Effect of price can increase on consumer behavior (Klaus et al., 2009; Lin, Li, You, 2011). The higher price is, the less we want to buy it in case of normal goods (Lorinczi, Bacs, Nagy (2009). Perception of the price determines what the consumers are willing to buy (Lin, Li, You, 2011). However, consumer Place Place or distribution channel is a set of interdependent institutions , for delivery of good and services to the consumers. Promotion Marketing and advertising managers should strategically place their product prominently in promotion in order to guarantee the desire impact (Van Der Waldt et al., 2007; Lin, Li You, 2011). According to Pedraja Yague (2011), the consumer use information from advertising, and information provided at the restaurant when searching for external source of information, used information and advertising as a source to reduce perceived risk and uncertainty. Kasikorn Bank (1997) studied about consumer behavior of supplement foods. They found that, the factor which influence in choosing supplementary food consumption is advertisement. At first the consumers might consume supplement foods just because they want to try. But after they concern that it is good for them, they would retain to purchase. However, the respondents of this study comment that most of the businesses advertise the products more than their properties. Sale promotion such as discount, special offer, can act as short term to motive consumers to choose (Mill, 2007). According to Jackson, Titz DeFrance (2004), high price restaurant, benefited from coupon promotions to a greater extent than low price restaurant (Sriwongrat, 2008). According to European Commissions (2009), free trial and price promotions can help the businesses promote their food products, and trying to take up healthier food is likely to be more effective than trying to convince them to give up unhealthy food. Sometimes a persons awareness and preference for product can result from repetitive brand advertising (European Commissions, 2009). People