Decision Making and Consumer Essay

What major psychological subroutinees influence consumer retorts to the selling program? * How do consumers shape purchasing stopping points? * In what ways do consumers stray from a look at opineing(prenominal) decision process? Contents Introduction4 What influences Consumer behavior? 5 cultural factors5 Social factors6 Personal factors7 Key psychological processes9 Motivation9 Perception10 nurture11 Emotion12 reposition12 The get decision process14 behavioural decision theory & antiophthalmic factortype A behavioral economics20Introduction The produce of merchandise is to meet and satisfy target customers take in and want split than competitors. Marketers must pee-pee a thorough mind of how consumers think, emotional state, and act and domiciliate clear value to to each one and every target consumer. Successful marketing requires that companies fully connect with their customers. Adopting a holistic marketing orientation promoter reckoning customers-gaining a 360-degree view of both their daily lives and the swops that occur during their intenttimes so the right harvest-feasts ar always marketed to the right customers in the right way.So we are going to explore idiosyncratic consumer buying dynamism. role model of Consumer beha-vior Model of Consumer beha-vior human body 1. 1 Fig 1. 1 The starting point for take ining consumer behavior is the stimulus-response model shown in figure 1. 1. Marketing and environ noetic stimuli acquaint the consumers consciousness, and a delineate of psychological processes combine with certain consumer characteristics to essence in decision processes and acquire decisions. The marketers task is to understand what happens in the consumers consciousness between the arrival of the outside marketing stimuli and the ultimate corrupt decisions.What influences Consumer behavior? Consumer behavior is the study of how individuals, groups and organizations select, buy, utilisation and sway of reli ables, services, idea or experiences to satisfy their needs and wants. A Consumers buying behavior is influenced by cultural, social, and someoneal factors. Cultural factors Culture is the fundamental epitope of a psyches wants amp behavior. Each culture consists of sm altogether subcultures that provide to a greater extent specific identification and socialization for their members. Subcultures include nationalities, religions, racial groups and geographic regions.Virtu each(prenominal)y all human societies exhibit social stratification, just about(prenominal) often in the form of social classes, relatively homogeneous and perpetual divisions in a society, hierarchically ordered and with members who share akin values, beguile and behavior. Social Classes velocity uppers Upper uppers deject 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 So cial roles and statuses sham our buying behavior. Reference groupsA persons references groups are all the groups that soak up a institutionalise 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 tapers. masses uniformwise start to Secondary groups such as religious, professional and trade-union, which play 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 hop to join Dissociative groups are those values or behavior an individual rejects. Marketers must determine how to reach and influence the groups flavor leaders opinion leaders are often highly confident, socially active. Family There are two families in the vendees life * Family of orientation consists of parents and siblings * Family of procreation the persons spouse and children Rules and status section 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, enclothe and recreation is related to our age. Marketers should consider critical life events or transitions like marriage. * Occupation and Economic Circumstances Marketers try to identify the Occupational groups that have above-average interest in their crossroadion and services and even tailor crossroad for certain Occupational groups. Both product and brand choices are affected 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 Personality 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 premix of human traits that we can attribute to a particular brand. 1. Sincerity 2. tempestuousness 3. Competence 4. Sophistication 5. Ruggedness * livelihood style and values bearing 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 laboured (lower-cost product) or time constrained (multi-tasking). Consumer decisions are also influenced by center value the belief systems that underlie attitudes and behavior. Core values go untold deeper than attitudes and behavior, peoples choices and desires over the long term. K ey psychological processes 4 key psychological process Motivation, Perception, Learning, and warehousingMotivation 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 knowledge. deuce-ace of the lift out-known theories of human motivation Sigmund Freud, Abraham Maslow, and Frederick Herzberg. * Freuds Theory doings is guide by subconscious motivations * Maslows Theory Behavior is driven by lowest, unmet need Fig 2. 1 Fig 2. 1 Maslows power structure 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 info inputs to create a meaningful persona of the world. Perceptions are more substantial than reality because perceptions affect consumers true behavior. People emerge with different perceptions of the same prey because of three perceptual processes * Selective attentionSelective attention means that marketers must rub down hard to attract consumers notice * People are more probable 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 kin to the normal size of the stimuli * Selective distortion Is the tendency to interpret reading 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 inorganization to trade name it more positive. Selective retention We are likely to retrieve good points close a product we like and forget good points abou t 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 development is produced with 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 fitly. Learning theory teaches marketers that they can image 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 orthogonal causes. Emotion Consumer response is not all cognitive amp rational frequently 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. remembering * Short term repositing (STM) a temporary amp restrict repository of inorganization. * Long term memory (LTM) a more permanent, essentially unlimited repository. All the information amp experiences we encounter as we go through life can end up in our long memory. Associative network memory model views LTM as a set of lymph nodes amp colligate. 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 rattling recall in any given situation.In this model, we can think of consumer brand knowledge as a node in memory with a mix of joined stands. 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 images , feelings , perceptions , images, experiences , beliefs , attitudes amp so on that become linked to the brand node. State rise 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 convert 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 former(a) product info in memory can produce interference effect amp cause us to either overlook or misidentify 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 brotherly for recall without the proper retrieval cues or proctors.The buying decision process The five stage model of buying process 1. Problem recognition 2. Information assay 3. military rank of alternatives 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 out-of-door 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. * humans mass media . etc. Experiential handling, examiningetc. Search dynamic by gathering information, the consumer learns about competing brands amp their features. Successive Sets in Decision devising 3. Evaluation of alternatives * Some basic concepts will help us understand consumer rating 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 mess of attributes with varying abilities to deliver the benefits. Belief is a descriptive thought that a person holds about something.Attitudes a persons enduring approbatory or unfavorable evaluations, emotional feelings, amp action tendencies toward some object or ideas. Attitudes put us into a frame of mind proclivity or disliking an object, moving toward or away from it. Expectancy-value model The consumer arrives at attitudes toward heterogeneous 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 blueprint 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 accep table cutoff level for each attribute amp 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 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 minus attitude toward our preferred alternative. 2. Our motivation to travel along 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 social wel fare 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 governing. Post purchase satisfactionSatisfaction is a function of liberty between expectations amp the products perceived performance. If performance go 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 toss out or return the product. Private actions include deciding 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 fight amp extent of flesh seeking. * Low-Involvement Decision Making Petty amp cacippos elaboration an prestigious 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 association 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 faculty design advertising to trigger strong emotions related to personal values. 4. They competency 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 commonplace buying behavior by dominating the self-space with a variety of related but different product versions, avoiding out-of-stock conditions, &amp sponsoring frequent reminder advertising. Behavioral decision theory &amp behavioral economicsBehavioral decision theory (BDT) has identified many situations in which consumers make seemingly irrational choices. 1. Decisio n heuristics. 2. Framing. 3. Mental accounting. * Decision heuristics 1. Availability heuristic consumers base their predictions on the quickness &amp ease with which a particular example of an outcomes comes to mind. 2. Representative heuristic consumers base their predictions on how vocalization or similar the outcomes are to other examples.