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Factors That Affect Consumer Buying Behaviour Marketing Essay

Today companies operating in different parts of worlds mutually agreed on a statement that “The Customer is King”. Current recession and economic crisis is directly producing forces which will continuously changing the consumer buying behaviour. So companies have to react sharply in this competition of world because due to economic slowdown consumers are very sensitive while purchasing any product. Indeed everybody wants maximum satisfaction against what he pays. Therefore companies want to study the consumer behaviour so that according to consumer preferences, thinking and perception they should launch through product in the market and select suitable marketing strategy to create brand image to influence consumer decision making process.

Why study Consumer Behaviour?

Consumer behaviour concentrates on their individual time, money, effort on consumption related items. In terms of future purchases on evaluations effect consumer behaviour included how often they dispose of it, what they buy, why they buy, why they buy it and when they buy it, where they buy it, how often they use it. Moreover, described consumer value as the ratio between provided benefit to customer such as economic, functional and psychological and the resources include monetary, time effort, psychological used to obtain those benefits.

Organization Background:-

Today TESCO is market leader in the retail industry of UK. Tesco is one of the biggest retailer in retail industry of United Kingdom. And it is one of the top three retailers in all over the world, running over 3700 stores globally and has employees around 440,000 people. While outside United Kingdom TESCO operates in 13 different countries like Ireland, Hungry, Turkey, India etc. In addition if we consider USA where every single day life keeps changing and the Tesco team is continuously responding to those changes. Tesco was a market stall set up by Jack Cohen in 1919 and has grown tremendously to become a market leader. In 1929 Tesco name was first appeared above a shop in Edgware and since then the it has grown and developed by regularly grapping new opportunities and pioneering in many technological innovations. In early 1990s Tesco faced strong competition in market and need to develop new strategy. TESCO was focusing at buying and selling goods but had begun to forget the customers. In 1997 Sir Terry Leahy became Chief Executive of TESCO and he asked simple question to customers - “what are we doing wrong?". TESCO then invested mostly in the things that only matter to customers. For example, Tesco launched a loyalty scheme Club card and Tesco.com, and online home shopping service. As a result going the extra mile for customers has been key to Tesco growth. The main aim of Tesco is to make customers' lives easier and better in any way. TESCO’S long term business strategy is currently fivefold and must have to be a most successful international retailer in the non-food items as the food items to make good and strong competitive reputation in retailing industry, like as tesco.com, Tesco personal finance, Telecoms and put themselves in customers heart

http://www.cn.tesco.com/en/aboutus/aboutus_history.htm

Literature Review:-

Consumer behaviour is defined as activities people undertake when obtaining, consuming and disposing of products and services. Simply stated consumer behaviour has traditionally been thought of as the study of “why people buy” with the premise that it becomes easier to develop strategies to influence consumers once a marketer knows the reasons people buy specific products or brands. Three primary activities are included in the definition of consumer behaviour are given below.

According to Stefano Puntoni and Nader Tavassoli (2005), Customers obtain maximum of information about a particular product from experienced users and sometime make buying decision on the basis of their own choices and preferences. Because social factors like opinion leaders, reference groups and consumer surrounding affect buying behaviour directly. However sometime customer buy a product unconsciously due to the strong perception of that product in his mind.

According to J.M Shapiro (1993), personality and self concept factors guide the consumer buying behaviour in his research he explain that peoples who want to improve their self concept and want to impress others from their personality are usually engage in buying gifts for their close groups. Whereas during research it is also concluded that lonely persons are observed not involve in this type if consumer behaviour.

According to S.E Heckler and T. L childers, (1989) two studies are conducted to identify that how much parents influence and subculture factors will motivate consumer behaviour. Therefore they find that family influences have more impact on buying behaviour especially in those countries where children lived with their parents as a result children develop their attitudes and values according to information gain from their parents experiences. So marketers should attract first adults to catch young generations.

J.Kacen and A.Lee, (2002), conduct research to find out how cultural factors became a part of buying behaviour therefore they conclude that cultural environment in different countries influences impulse consumer buying behaviour. Like in western culture people have more knowledge about product or service because of the strong advertising and development in e-commerce activities. Cultural factors vary from region to region or country to country and in a single country may be there are two or three ore subcultures.

In (2006) J. Sengupta and R. Zhou study the fact that why consumer go for unhealthy eating options like fast-food. Therefore they consider hypothesis food with great taste containing high calories. But in the end they found that it is a psychological influence that consumers always go for tasty fast-food items without paying any intension to their unhealthy affects like high calories, fats etc but the main important outcome for consumers is their satisfaction.

In May (2007) J. Sengupta and R. Zhou conduct an experimental research to identify the influence of promotion strategies on buying behaviour of impulsive and non-impulsive eaters. After their experiment they conclude that consumers are mostly attract to product through strong marketing campaign to launch product in the market because first exposure make customer to decide whether to buy or not. They consider the example of chocolate cake.

According to (S.L O’Brien February 1, 2006) buying decision involve different kinds of factors which peoples are mostly unaware. (Brown, 2005) discuss that buying are influenced by different key factors like Social, Psychological and personal. Therefore marketers always promote their products according to characteristics of peoples. Because behind every small purchasing decision whole buying decision model is working.(Armstrong et al, 2005)

Factors that affect consumer buying behaviour:-

A large number of factors influence our behaviour. Kotler and Armstrong (2008) classify these as:

Psychological Factors.

Personal Factors.

Social Factors.

Cultural Factors.

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http://tutor2u.net/business/marketing/buying_stimulus_model.asp

Psychological

Motivation

Marketers have concerned in motivation especially when it deals with buying behaviour. Because this will show the motive behind the wish of person to buy product or service and it is known as goal related behaviour. Motives such as shelter, hunger, warmth etc are physiological behaviour. Whereas motives like achievement, respect and prestige etc are psychological factors. Therefore mostly buying decisions are combination of these motives irrespective of price which is definitely an economic factor rather than a motive.

Perception

Perception is different from motivation means it refers to the sense of consumer stimulus. Therefore marketers are concerned to know how consumer perceive or give response to particular product and its characteristics like price, packaging, quality etc. Indeed consumer perception has relation with its need satisfaction. Therefore consumer perception can be changed by the characteristics of product, by the different situation or condition of consumer, by the consumer inherent position in a sense how much ready consumer is to buy particular product to satisfy his need at that particular time. However there are various stimuli working in consumer mind to attract the attention therefore marketers should represent their advertising message as attractive and motivating as they can because usually potential consumers mostly respond to the information which they received. So this is the basic factor to keep in mind to advertise their product in the market with the selection of suitable media

Learning

Learning proceeds from experiences which modify perceptions and attitudes. Moreover learning also increases a shift in consumer behaviour like if a consumer perceived that this particular product is complimentary as compared to other available products than he guide or advice other reference groups to buy this product. In perspective of marketing learning is enhance from information receive by consumer through sales promotions techniques. So to make an effect on consumer buying behaviour marketing efforts should attempt to product promotion through reinforcing and motivating messages. Because main aim and objective of marketers are to provide that kind of product that satisfy their consumers.

Attitudes

Attitudes are important characteristics of psychological factors and they mostly come from the influence that we can get from our close family members and other daily social interactions. Therefore in marketing sense a set of cognitions that a consumer has related to his buying environment regarded as aggregate of consumer attitudes. That is why different stores and organization use different promotion campaign to get favourable attitudes from consumers and build consumer loyalty regarding their product or brand. Because once certain attitude is set up in the consumer stimuli then it is so difficult to change their attitude.

Personal

Age and Life Cycle Stage

Buyers of different groups in terms of age defiantly have different needs and wants. Indeed consumers who are from the same age group are different with each other in several other ways. They do tend to share different cultural experiences and different set of values which they contain throughout their whole life. Whereas life cycle includes six types of stages consumer relating to different life cycle stage have different needs and wants, preferences and desires.

Lifestyle

Consumers may also have distinctive lifestyles even if they have different characteristics like age, gender, role etc. How we feel about our self, what are the things we give values, what are the activities we like to do in our free time etc all these kind of statements will help marketer to identify that which products will click consumer mind.

Personality and self concept

Personality and self concept means consumer’s thinking to judge himself how people see him or how he see himself. This is referred to be a part of individual buying behaviour. Basically the main reason for this type of behaviour is that individual want to create such a picture of own self that is attractable to his surrounding or reference group. So companies are concerned with response to this behaviour because it is directly related to consumer buying decision. In addition self is inspired by consumer social interaction and their regular purchases with their consistent self concept to develop and safeguard it. Whereas personality is main part of self concept that is why it has solid effect on consumer buying decision.

Cultural

Culture

In developing countries cultural factors play very vital role on consumer buying behaviour because culture is the primary part of consumer’s wants and actions. Basically culture is known as learned behaviour which reinforce in our daily life sometime through educational, religious institutions or family unit. So, cultural factors are very necessary to understand for a business to start its operations or before entering in a new market because after understanding culture of particular region company can develop product and services. A person living in a society has basic set of norms, values, preferences etc with a socialization process involving both institutions and family.

Subculture:

In every particular culture there is a small set of culture known as subculture which always represents socialization and certain identification for its peoples. Different nations and communities have different culture including preferences, tastes, believes etc. Moreover culture trends can change very slowly most of time take time a generation or further time to pass.

Social Class:

Social Class have different characteristics. Like consumer in one social class behave different than other consumers belonging to other social classes. And according to social class consumers are perceived whether they hold inferior or superior position. However social class is distinguishing by different set of variables income level, occupation, wealth creation etc.

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Social

Reference Group:

Consumer behaviour is influenced by some reference groups. Which include peoples that have direct or indirect effect on consumer’s attitudes? Peoples that effect directly to consumer behaviour are known as membership group including continuous daily interaction like class fellows, family members, and friend’s etc. Whereas secondary group include peoples which have minimum continuous interaction including companies, associations and unions etc.

Family Group:

Family members of the consumer have strong influence on consumer’s behaviour. So marketers can differentiate between two families in consumer’s life. Orientation family consists of parents from where an individual gain orientation towards love, self-worth, religious and politics etc. However in different countries where children live with their parents they have a strong influence on their buying behaviour.

Opinion Leaders

Opinion leaders are small group of those people like family who are considered as knowledgeable by consumer and they are mostly followed. Opinion leaders are not always in group they may include individuals who comes after immediate peoples like consumer family. So, mostly consumer take opinion from leaders and these types of consumers are called opinion followers. In case of advertising marketer deliberately use opinion leaders and famous personalities to attract customer intentions.

http://www.management-hub.com/marketing-consumer-behavior.html

Research Methodology:-

Generally marketing research is a process to identify the specific problem or find the solution of any problem. Therefore this process can be based on two basic approaches.

Qualitative Approach.

Quantitative approach.

The difference between qualitative and quantitative approach is almost same like distinguish between conclusive and exploratory research method.

In general, research can be viewed as a process of problem solving and this process can be based on two approaches: quantitative approach and qualitative approach. Among them, suitability of quantitative approach is recognised as the use of term “examining” in the objective of proposed research makes proposed study fall into category of this approach.

In quantitative approach, research is based on positivist in other words scientific methods. In this approach, investigation of a subject relies on logical thinking and critical reasoning. In simple words, this is defining objectives in a clearer way and interpreting data with serious statistical analysis (Cresswell, 2003). In quantitative research the focus point is describing and/or explaining the causes of the identified problem and predicting its effects (Cooper and Schindler, 2006).

The purpose of doing this is to build a theory or test the existing theories. In quantitative approach, collection of data is made through either surveys or experiments and in the analysis of the data gathered through given methods is made with the help of statistical and mathematical methods (Cooper and Schindler, 2006). From the quantitative approaches, descriptive study will be chosen as the strategy of this research. As a part of their nature, descriptive studies are based on describing problem or the characteristics of the problem by asking who, what, when, where and how questions and try to measure consumer behaviour, their knowledge, their attitudes and opinion of consumers. By employing descriptive study, the aim is to describe the factors associated with consumer purchasing behaviour regarding buying electronic appliances online (Cooper and Schindler, 2006).

In line with the quantitative approach, first literature will be built. Literature is the framework of a study and the aim of forming literature will be to provide an introduction of the problem subject to a research or to describe this problem in details with the help of existing literature (Cooper and Schindler, 2006). This will be followed in this study and a literature based on consumer behaviour, consumer decision making, online consumer behaviour and online electronic appliances purchasing will be given at the beginning of the study. In building the literature, secondary data will be used which will be obtained through reviewing books and articles on consumer behaviour and online consumer behaviour. In the collection of primary data, structured questionnaire which will consists of close questions and pre-set answers will be used and will be distributed randomly among the Londoners. In the analysis of the data, frequency tables will be used to show both the number of people and their percentages for used variables.

The collection of data for the descriptive stage of the research will be composed of three steps in a process. At first, the researcher will be engaging in the investigation of secondary data. In secondary date researcher will go through text books regarding promotional strategies and recession, articles, journals and other forms of secondary data. The purpose of the first stage will be the establishment and re-examination of the theoretical basis for the research. Secondly, the primary data will be gathered, through the face to face interview with the store manager’s. Lastly, the process of the third stage will be included the conduction of semi-structured questionnaire with the employees of the department, in order to identify the perception of the employees toward customers response on these promotion in such a tough financial condition.

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