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Factors that influence the consumer decision process

Q: With reference to a consumer brand of your choice explains how the consumer decision process is influenced by factors within the psychological core, the consumer environment and by marketer controlled activity. Your explanation must make extensive use of examples of the organisation’s marketing activities together appropriate consumer behaviour theories and models.

Abstract:

The assignment focuses on attitudes and behaviour on the concept of the consumer’s buying behaviour towards coca-cola, different consumers have got different decision making process. The buyer’s ultimate goal is to buy the product with low/best affordable price.

Introduction:

According to Blackwell, Miniard and Engel (2006) the Consumer Decision Process (CDP) model, represents a road map of consumer’s minds that marketers and managers can use to help guide product mix, communication, and sales strategies. The model captures the activities that occur when decisions are made in a schematic format and shows how internal and external forces interact to affect how consumers think, evaluate and act.

Consumer Decision Process:

Consumers make many buying decisions every day. Coca-Cola has done extensive research on consumer buying decision, to answer questions like what does consumer buy, where they buy, how they buy, how much they buy, when they buy and why do they buy a product, for this question to reorganize the decision different stages needed they are, information search, and evaluation of alternatives, purchase decision and post purchase decision etc.

Need Recognition:

Every purchasing decision involves a certain process that occurs in the minds of customers. The first stage in this process is need recognition. In this step, a customer recognizes a need or a problem. This need can be aroused by internal or external stimuli. This internal and external stimulus actually determines which product the consumer will purchase, how much its quantity will be and also its reliability.

For this we will take the example of coke. For example, a consumer feels thirsty and he/she is looking for some soft drink. The marketing team of coca-cola is very efficient in recognizing the needs of the consumers. So, in their marketing activities, this team try to presents the solutions of the desired problem by giving different kinds of advertisements.

Information Search:

This is the second stage in consumer decision process. During this stage the consumer who has recognised the need, search for information to satisfy the need. A consumer can collect the information from many sources. For example, these might be

Personal sources i.e. friends, family and neighbour.

Commercial sources include advertising, packaging and displays.

Public sources include media and different organization.

In these sources, commercial sources are very important because through advertising, packaging and displays, the companies can give the impression that they have got what the customer is looking for.

This ad gives the information that the consumer can refresh themselves by drinking coke.

Evaluation of Alternatives:

This is the most important stage in consumer decision making process. In this stage, the consumer measures each brand on the specification it possesses from the information collected before. At this stage, brand beliefs play an important role in deciding the product. Branding has become so strong that today hardly anything goes unbranded. Brand names help consumers identify product which might benefit them; they also tell the buyer something about the product quality. Consumers who always buy the same brand know that they will always get the same features, benefits and quality. (Kotler & Armstrong, 2004, p.285)

When the consumer looks for a soft drink, he/she might compare the coke with Pepsi or some other competing brands. This is the point where psychological and social factors can play an important role in choosing the coke and where coke’s marketing activity can be judged that how coke used these factors in a favourable manner to facilitate the consumer decision to buy coke.

Purchase Decision:

This is the stage where the consumer actually buys the coke. Two factors are very important at this stage, attitude to others and unexpected situational factors. Though the consumer has made his purchase decision in the above stage, these factors influence is so strong that the purchase decision does not necessarily result in the actual purchase decision. (Kotler & Armstrong, 2004)

Post Purchase evaluation:

This is also the important stage because it determines the future of the company. In this stage, the consumer actually observe that the product satisfy his/her need or not. There will be three results. If the performance of the product is lower than the expected, it results in customer dissatisfaction which can have a bad impact on the future of the company. If the performance of the product is equal to the product performance than the customer is satisfied. If the performance exceeds the expectations than the customer will be happy. (Kotler & Armstrong, 2004)

Psychological Factors:

Following are some psychological factors which can influence the consumer decision making process.

Motivation:

Consumer motivation represents the drive to satisfy both physiological and psychological needs through product purchase and consumption. (Blackwell, Miniard and Engel (2006)

Motivation Theories:

Maslow’s need hierarchy theory:

According to Maslow, motivation is a function of five basic human needs, which can be categorized as deficiency needs and growth needs. The deficiency needs, which can be satisfied externally, consist of Physiological needs (food, shelter), safety needs (a secure environment) and social needs (friendship, affiliation, interaction and love). Esteem needs (self-esteem and esteem from others) and self-actualization needs (develop oneself to ones fullest potential) together make up the growth needs, which can be satisfied internally.

These needs are organized in a hierarchy, meaning the first basic needs must be satisfied before the second basic needs become relevant. Thus, only one of the five basic needs is aroused at a time and only after this need is fulfilled the person strives to satisfy the next higher need.

Maslow’s Hierarchy of Needs Source: Maslow

There are many ads of coke in which there is motivation for the customers. The main focus in coke’s ads is self esteem and self actualization. One of the coke ads with the title “Hard times” is very popular in this category. In this ad, a billionaire lost everything due to the economic crisis. On the other hand, he finds happiness after drinking coke and finding the company of his friends. (http://www.youtube.com/watch?v=EnUKurl7Fog)

Means-End Chains (MEC) analysis:

For producers that look for product development along with deepened knowledge of their consumers, an important step is to understand what consumers perceive as positive in a product, as well as to identify which attributes that acts as intermediary value. Everyone has a different reason for his or her behaviour and when consumers select products it often works as a tool to accomplish their goals or values. A theoretical model explaining individual’s cognitive structure, including values, is the Means-End Chains (MEC) model.

The basic idea behind MEC is to derive the connection between the product and the meaning it plays for the consumer’s life. Also, it clarifies why and how a product is important in a person’s life. The MEC model suggests a hierarchical illustration of how consumers view products and services. Three levels are presented: Attributes-> Consequences –> Values

The first level, product attribute (A), corresponds to concrete characteristics of the product. It is often represented in physical nature. An attribute of coke could for instance be the enjoyment or cola taste. A product is characterized by plenty of attributes. Which attributes are significant to a consumer is considered to be determined by consumer’s intrinsic and extrinsic motivations. The extrinsic motivation is associated with the supply of the product. While intrinsic motivations are connected to the demands of the consumer.

The second level, the consequences (C), describes the benefit or disadvantage that the customer will experience as a result from the attributes. The consequences could be either of physical, psychological or social nature as well as direct and indirect. For instance, consequences from drinking of coke can be “ease thirst”, “save time” and “save money”. The social and psychological consequences can for example be better higher status. Direct consequences come directly from the consumed product or from the actual consumption. Indirect consequences occur when other people react positively or negatively towards the consumer because of his or hers buying behaviour. The MEC model assumes that the consumers act in order to experience positive consequences and to avoid negative consequences.

The consequences will lead to the third and last abstraction level, value (V). A value is defined as “criteria used to select and justify actions and to evaluate people and events. A person’s value is shaped by culture, society and its institutions as well as the person’s own personality. Values play an important role for the person’s consumption pattern as many products are consumed in order to help us reaching a related goal.

Attention:

Attention is very important in understanding. If the customers didn’t pay attention to the advertisements of the product, it can’t be stored in the customers’ minds. As far as, the marketers are concerned, it is very important for them to gain attention of the customers. So the main objective of the marketing is obtaining the customers’ attention.

According to Kotler and Armstrong 2004, there should be three main characteristics in the ads to get customers’ attention.

The ads should be meaningful. It should describe all the benefits and characteristics of the product that a customer is looking for.

The ads should be believable. The customer should believe that he/she will get the desired benefits from the product.

The ads should be unique. In their ads it should be mentioned clearly that this product is better than its comparing brands.

Coke is famous all over the world by its successful marketing campaigns and ads. To get customers’ attention, coke has portrayed world known celebrities in his ads. To get customers’ attention this was a unique idea to have celebrities in their ads because celebrities always got people attention. In addition to this, coke has sponsored many famous songs of the football world cup simply to get the world’s attention towards coke. Coke has its own unique ingredients carefully mixed/added to it, it 'tastes' very good and delights the consumers’ senses temporarily, So when the customers see something that represents that taste that 'delighted' them temporarily in that moment, they are then 'reminded' of it, and this usually leads to craving it, thus purchasing/consuming it.

Perception:

Perception means awareness. To get customers’ attention is not enough to get success in the market. Customers only buy the product when they perceive that the product will be useful for them. In this way, it is customers’ perception that leads them to buy the product.

Coke is fully aware of this fact and they have used many slogans in their ads to perceive the customers. Some famous slogans of coke are happiness, the real thing, pleasure, enjoy etc. The reason why coke is famous among the customers is their slogan “Coke makes you feel good”. If we observe the coke, it is just brown coloured sugar water. But the customers pay a lot more than its cost. The reason for this is just their slogan “feel good”. One thing to understand about coke perception is value. Coke always gives the perception that they offer value to their customers.

Learning:

Learning is the process through which a relatively permanent change in behaviour results from the consequences of past behaviour. Learning, changes in a person's behaviour caused by information and experience. According to classical conditioning theories of learning, the learning process has four factors i.e. drive, cues, responses and reinforcement. Drive is a strong internal stimulus which results in an action. In cue stimulus the consumer decides when, where and how he/she will respond to the drive. The action to cue is response. In the last, reinforcement takes place when response is rewarding.

This is exact what coke marketing team is doing. In their ads, they are trying to give happiness to their customers. When the consumers feel happy, it creates a strong internal drive which results in a positive reinforcement. In the following add, Santa after drinking coke spread happiness everywhere in the world at the Christmas time. It creates a strong internal stimulus in the consumers to drink coke. (http://www.youtube.com/watch?v=4TMwBFK2qHI)

Beliefs and attitudes:

Beliefs and attitude also plays an important role in consumers’ buying behaviour. A belief is said to be the consumers’ trust on brands or products. Marketers are interested in formulating strong beliefs about their product in the consumers because these beliefs make up product and brand images that affect buying behaviour.

Attitude is a person’s like or dislikes feeling about something. Attitude is also said to be a judgement. Once a positive or negative attitude is formed it is difficult to change it. Coke has gained favourable attitude of consumers. Through their ads they are also trying to change the unfavourable attitude of customers by giving them pleasure. Just like in this ad coke gives pleasure to students by giving them free coke thus changing their unfavourable attitude into favourable.

(http://www.youtube.com/watch?v=M0D3jKLz6sA)

Memory:

Memory plays an important role in advertisement. It is very important for marketers that if they are attracting new customers, they should not lose their existing customers. Consistence advertisements of a product have a long and everlasting impact on the memory of the customers. Coke’s marketing team is fully aware of this fact. For example, the above ad will have a long term impact on the memory of the students.

Environmental Factors:

Environmental factors also play an important role in consumers’ decision process. Those factors are as follows:

Social factors:

Consumer’s wants, learning, motives etc. are influenced by opinion leaders, person's family, reference groups, social class and culture. All these factors play an important role in consumer’s decision process. People mean all human actors who play a part in service delivery and thus influence the consumer’s perceptions and attitudes through their own behaviours and attitudes (Wilson 2010). People who are effectively involved in service delivery can help consumers through the decision making process, can reinforce an existing brand image and increase consumers purchase and re-purchase intentions.

In the campaigns and promotional programs of coke, we can observe a blend of happiness and joy among people, groups and friends. For example in the above ad, he main targets were students’ groups. If a new student is going to join this group, he will definitely attract to coke.

Personal factors:

Personal factors are those factors which are unique to the customer. These factors can be age, sex, Demographics etc. Sometimes we are not the decision maker in the family, and also there are different reasons to purchase a thing between young and old people. As age progresses choices also changes. Along with this, economic situation of the buyer also affect the consumers’ buying behaviour. As far as coke is concerned, it covers all the walks of life. Childs, young and old people used to refresh themselves by drinking coke. Normally people used to drink coke as their lifestyle.

Cultural Factors:

Cultural factors plays an important role in consumer byuing behaviour. Culture portrays a customer’s wants and behaviour. Culture of one nation includes values, beliefs, perception and attitude of the consumers of that nation. As every nation has its own culture so the marketers should focus on the culture of every nation. Price of the product, promotional programs and most important the product should be suitable for the target population’s culture.

Coke’s marketing team is fully aware of the cultural aspects of every nation. If we talk about Europe culture, Christmas is very important festival for Europe. Here coke celebrates Christmas with the people of Europe. (http://www.youtube.com/watch?v=HVfYxMYkWLo)

If we talk about Pakistan culture, the month of Ramadan is the blessing month in Pakistani culture. Here again coke celebrate the month of Ramadan with Pakistan. (http://www.youtube.com/watch?v=_HM6ybZupkE)

Conclusion:

It is very important for marketers to understand all these factors which helps in controlling the consumers buying decision. On basis of our analysis, we have drawn the following conclusion that advertising, brand, social, psychological, and age all affect consumer preferences to some extent. We found that some consumers, who associate a brand with advertisement as well as having actual knowledge about the brand’s ads, do indeed feel that their choice of product is to a large degree influenced by brand advertisement.

From this study, it can be concluded that in order for coca-cola to be successful and shape consumers’ decision process, it is vital that they implement a combination of the studied factors in their marketing strategy so to best reach target groups. More specifically, the strategies should be tailored in accordance to the target groups’ age, seeing as consumer preferences vary depending on a person’s age. Lastly, although advertising campaigns are still efficient in reminding and persuading consumers of brands and products, companies must differentiate themselves in their messages and techniques, etc. as advertisement clutter is at a rise.

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