Consumer Decision Making Process and Its Influencing Factors
Consumer Decision Making Process and Its Influencing Factors
Acknowledgement
First of all I would like to thank Almighty Allah for helping me in every difficult time in
completing my research. I would also like to thank my Parents and my Friends whom helped
me in every possible way they can. Then I would like to take this opportunity to thank our
instructor Mr. Sohail Chohan who helped us in every difficult situation which I faced in my
whole Project. And last but not the least, I would like to thanks all the people who took their
time to fill the questionnaires and helped me in completing my research properly.
Table of contents
Topics
page no
Abstract...............................................................................4
Introduction.........................................................................5
Need to understand.............................................................5
Consumer purchase decision process..................................6
Factors that affect decision making process........................8
Types of buying behaviour..................................................14
Literature review..................................................................15
Objectives.............................................................................18
Variables.............................................................................18
Hypothesis.............................................................................19
Methodology.........................................................................19
Results...................................................................................19
Conclusion..............................................................................21
References.............................................................................22
Appendix................................................................................24
1. Abstract
2. Introduction:
Deciding to buy
After the comparison and selection of information of products or service,
consumers purchase intention may have been formed. That is to say that
consumer will make purchase decisions at this stage. Consumer will make
purchase decisions to determine why to buy, when to buy, who buy, how
to buy, what products to buy and where to buy. The so-called preconsumer psychology means the mental process in which the consumers
make the decision. For example, when consumers feel hungry, they want
to eat fast food. They may collect information about fast food restaurants
from various channels including, as discussed before, personal sources
commercial sources public sources and experience sources. By
Postpurchase behavior
After the purchase, consumers will make the evaluation of the product or
service. The level of consumer satisfaction depends on the comparison
between consumer expectations of product performance and the actual
performance of product in use. The level of consumer satisfaction
determines consumer activities after the purchase, determines whether
the consumers repeat purchase the product and determines the attitude
of consumers to the brand. In addition, the level of consumer satisfaction
also affects other consumers and will result in a formation of a chain
reaction. For example, in consumption in a hotel, customers have
psychological needs for respect. The customer expects to get courteous
reception, the courteous greeting and reception of hotel staffs in the
service process. The customer also expects to get equal service. In the
service, the customer does not want to be ignored or treated unfairly. The
customer expects convenient and efficient service. The consumer wants
to minimize the waiting time in the period staying in the hotel. After
purchase the service, the consumer finds that none of his expectations
has been met. The consumer makes a highly negative assessment of the
hotel. Since then, the consumer will not patronize the hotel. To make
matters worse for the hotel, the consumer will affect the buying behavior
of his friends.
Cultural factors
Culture is the most basic determinants of human desires and behavior
(Dittmar & Drury, 2000). In general, the impact of it on the consumer
behavior is more profound than other factors. A kind of culture is
composed of many elements, such as the spirit, attitude, norms, and
customs and so on. For example, as a part of national culture, Food
culture has a direct impact consumer behavior when they making decision
for food or restaurant service. Western consumers might be more willing
to opt for fast food, and Asians may be like Chinese food. For another
example, General Motor (GM) failed to launch its luxury brand Cadillac into
Japanese market, because it ignored the cultural factors. Cadillac
represented the typical American culture with a symbol of the spirit of the
United States. It turned out that the company ignored that oriental culture
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Random factors refer to events that may occur when consumers purchase
decision. Sometimes, the consumer purchase decision is made in
unexpected circumstances (Lafferty & Hult, 2001). For example, someone
might want to purchase a plane ticket and to spend their final days with
his dying relative. The emergency situation of his relatives is a variable
factor which affects the consumer's purchase decision because the
consumer never usually purchases a plane ticket but often takes the train.
The emergence of a situation may delay or reduce the people's decision
making process (Park & Kim, 2003). For example, a consumer who is
considering buying a computer may be hesitant in the evaluation and
selection and this hesitation will certainly slow down the decision-making
process or lead him to give up such purchases. However, if the consumer
suddenly gets a high bonus for his excellent work performance, the
consumer may immediately determine to buy a computer. As a result,
decision-making process is shortened because of this unexpected factor.
Psychological factors
Consumer purchase decisions are affected by some psychological factors
including attitudes, motivation, learning, perception as well as beliefs.
Motivation is a need, which can lead people to seek to meet the target
needs (Hausman, 2000). Perception depends on the physical
characteristics of stimuli, but also depends on the relationship between
stimulus and personal with the environment. People get their beliefs and
attitudes through behavior and learning. In turn, consumer beliefs and
attitudes will affect their buying behavior. For example, consumers
purchase of McDonald's service and Coca-Cola's products is affected by
buying motivation. Consumer needs determine what they want before the
purchase decisions. Consumers need perfect dining environment and
service when eating out and want new flavors when they want to drink.
So, McDonalds focus on its dining environment and the service system is
perfect in order to produce consumer motivation. Coca-Cola also
continues to develop new flavors to produce consumer motivation. The
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Culture
According to Solomon (2006), culture is a society's character that
includes theoretical ideas like values and ethics and physical matters and
services like automobile, clothes, food, sports, etc, that are delivered or
respect by a society. In the other word, it's a set of belief, norms, values
and traditions that share among the members.
Culture is being learned and has a long effect on the behavior of an
individual. As an example of cultural influences, consider how the
salesperson in a car showroom in England should approach the different
couples of customers that visit as in some cultures the husband will be the
one making the decision, while in the other it's the wife.
Social Class
This can be simply defined by set of factors like income, family
background and occupation.
"Social class is a much a state of being as it is of having: As Phile saw,
class is also a matter of what one does with one's money and how one
defines his rold in society". (Solomon 2006)
However, it is mentioned in Solomon (2006) as one wealthy woman
observed when she was asked to define social class:
"I would suppose social class means where you went to school and how
far. Your intelligence. Where you live... Where you send your children to
school. The hobbies you have. Skiing, for example, is higher than the
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Low Involvement
Significant differences
buying
Variety seeking
Between brands
Buying behaviour
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Complex
Behaviour
Few differences
reducing
DissonanceHabitual buying
Between brands
behaviour
Buying
Behaviour
3. Literature Review:
The topic of consumer behaviour is one of the massively studied topics
by the researchers and marketers in the past and still being studied.
Researchers show different reasons as to why consumer behaviour has
been the topic of many academics and researchers. One of the common
views is that understanding consumer behaviour has become a factor that
has a direct impact on the overall performance of the businesses (Kotler
and Keller, 2012). Another view suggests that understanding consumer
behaviour has become crucial especially due to fierce competition in retail
industry in the UK and worldwide (Lancaster et al, 2002). This chapter will
introduce some other areas of research background of consumer
behaviour addressing the works of researchers and marketers. Moreover,
consumer decision making process, in particular, five stages of consumer
decision making process will be discussed in detail.
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individual recognizes the difference between what they have and what
they want/need to have. This view is also supported by Neal and Questel
(2006) stating that need recognition occurs due to several factors and
circumstances such as personal, professional and lifestyle which in turn
lead to formation of idea of purchasing.
In the next stage, consumer searches information related to desired
product or service (Schiffman and Kanuk, 2007). Information search
process can be internal and external. While internal search refers to the
process where consumers rely on their personal experiences and believes,
external search involves wide search of information which includes
addressing the media and advertising or feedbacks from other people
(Rose and Samouel, 2009).
Once the relevant information about the product or service is obtained the
next stage involves analyzing the alternatives. Kotler and Keller (2005)
consider this stage as one of the important stages as the consumer
considers all the types and alternatives taking into account the factors
such as size, quality and also price.
Backhaus et al (2007) suggested that purchase decision is one of the
important stages as this stage refers to occurrence of transaction. In other
words, once the consumer recognized the need, searched for relevant
information and considered the alternatives he/she makes decision
whether or not to make the decision. Purchasing decision can further be
divided into planned purchase, partially purchase or impulse purchase as
stated by Kacen (2002) which will be discussed further in detail in the next
chapters.
Finally, post-purchase decision involves experience of the consumer about
their purchase. Although the importance of this stage is not highlighted by
many authors Neal et al (2004) argues that this is perhaps one of the
most important stages in the consumer decision making process as it
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4. Objectives:
The objective of consumer behaviour is that the consumer
seeks to gain the best or the most goods and services for the least
amount of money possible.
4.1 Variables:
Variable may refer to:a logical set of attributes
The independent variable is also called an experimental variable. It
is the variable being manipulated in the experiment in order to show the
effect on the dependent variable.
The dependent variable is also called the response variable. It is the
variable being observed in the experiment. A change in the independent
variable is what causes the change (if any) in the dependent variable,
which is the purpose of the experiment.
There are several variables in the consumer decision making process,that
may affect them in some or in many ways:
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5. Hypothesis:
External factors may affect buying behaviour.
Environmental factors may influence buying
behaviour.
Internal factors may change the buying behaviour
of an individual.
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6. Methodology:
Several methods are used to identify the problems and
their solutions. I have done a research work regarding the consumer
buying decision behaviour and its influencing factors. The result is
gathered by using a questionnaire method. It is a small research to know
about the buying patterns of the consumer. From the population a sample
of 20 respondents is chosen. They are well educated and aged from 18 to
onwards. The scale used is likert scale, which measures strongly
agreed, agreed, undecided, disagree and strongly disagreed. The
respondents were given a questionnaire to share their views about the
statements given in the questionnaire.
7. Results:
1. Do people buy products and services to meet their needs? 70% (14
out of 20) respondents strongly agreed it, means that people always
buy products and services to meet their need.
2. 41% (7 out of 20) agreed that people get satisfied when they meet
their needs.
3. 45% (8 out of 20) respondents prefer the performance of the product
more than anything.
4. 41% (7 out of 20) agreed that they measure satisfaction level about
a product by comparing the product with another product.
5. Does culture influence the buying behaviour? So 46% (9 out of 20)
agreed that the culture do affect the purchasing pattern.
6. 55% (11 out of 20) also agreed that social factors do affect the
buying behaviour.
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7. Unexpected factors are responsible for buying behaviour and 50% (10
out of 20) agreed on this statement.
10. Attitudes, learning and beliefs are strongly agreed by 46% (9 out
of 20) respondents important for buying behaviour.
11. (7 out of 20) 40% respondents disagreed that they change their
buying decision by the word-of-mouth.
12. Do people go through different stages of decision making process?
45% (8 out of 20) agreed that they go through this process before they
purchase anything.
13. Consumers are now-a-days more educated about the products and
services, as we all know about it and this statement is agreed by 46% (9
out of 20) of the respondents.
14. 41% (7 out of 20) respondents disagreed that they look at the
price of the product rather than its quality or performance while
purchasing a product.
15. 46% (9 out of 20) agreed that they take hard decisions for
expensive products.
16. 50% (10 out of 20) respondents agreed that they take their
purchases as a learned experience.
17. Branding influenced 40% (7 out of 20) respondents.
18. Information gathering is important for purchase decisions and 60%
(12 out of 20) agreed on this.
19. Age related products are good or are purchased by different age
groups and 46% (9 out of 20) strongly agreed this statement.
20. Family do influence buying decision and 65% (13 out of 20) agreed
this statement.
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21. 55% (11 out of 20) strongly agreed that television advertisements
influence more than the magazine of printed advertisements.
22. 46% respondents agreed that advertising do influence their
behaviour.
23. It remained undecided by 40% (7 out of 20) respondents that
exaggerated ads affect negatively on the buying decision.
24. 50% (10 out of 20) strongly agreed that income and occupation
plays an important role in buying behaviour of a person.
8. Conclusion
In purchase, consumers purchase decision process includes
Recognizing needs, gathering information, evaluating options, deciding to
purchase and post purchase behaviour. Need is consumers unsatisfactory
state which is encouraging consumers to take action to improve it. After
recognizing what they need, consumers will gather information about the
products or service to lay the groundwork to make a purchase decision.
After gathering information about the products or brands, consumers may
make out some options for the buying behaviour. After the comparison
and selection of information of products or service, consumers purchase
intention may have been formed. After the purchase, consumers will make
the evaluation of the product or service. Consumer purchasing decision is
affected by numerous factors such as cultural, social, personal and
psychological factors.
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9. References:
Assael Henry, Pope Nigel, Brennan Linda & Voges Kevin.(2007). Consumer
Behaviour: A Strategic Approach. US: John Wiley & Sons
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Kacen, J. J., and Lee, J. A. (2002). The Influence of Culture on Consumer Impulse
Buying Behavior. Journal of Consumer Impulse Buying Behavior, 12(2), 163-176.
Park C-H.& Kim Y-G.(2003). Identifying Key Factors Affecting Consumer Purchase
Behavior in An Online Shopping Context. International Journal of Retail &
Distribution Management, 31(1), 16-29.
Bagozzi, R. & Warsaw, L. (1990) Trying to Consumer Journal of Consumer Research 17,
(2) pp. 127 140.
Backhaus, K. Hillig, T. and Wilken, R. (2007) Predicting purchase decision with different
conjoint analysis methods, International Journal of Market Research. 49(3). Pp. 341-364.
Blackwell, R., Miniard, P. and Engel, J. (2006) Consumer behavior, Mason: Thompson
Hoyer, W.D. & Macinnis, D.J. (2008) Consumer Behaviour, 5th edition, Cengage Learning
Kacen. J. J. and Lee. J. A., (2002) The influence of culture on consumer impulsive buying
behaviour, Journal of consumer psychology. 12(2), pp. 163-174.
Kahle L.R. and Close, A. (2006) Consumer Behaviour Knowledge for Effective Sports and
Event Marketing, Taylor & Francis, New York, USA
Neal, C., Quester, P. and Pettigrew, S. (2006) Consumer Behaviour: Implications for
Marketing Strategy (5th edition) Berkshire: McGraw-Hill
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Perugini, M. & Bagozzi, R. (2001) The role of desires and anticipated emotions in goaldirected behaviours: Broadening and deepening the theory of planned behaviour British
Journal of Social Psychology, 40, pp. 79-98.
Rose, S. and Samouel, P., (2009) Internal psychological versus external market-driven
determinants of the amount of consumer information search amongst online shopper,
Journal of Marketing Management. 25(1/2), pp. 171-190
Schiffman, L., Hansen H. and Kanuk L. (2007) Consumer Behaviour: A European Outlook,
London: Pearson Education
Stallworth, P. (2008) Consumer behaviour and marketing strategic, online, pp.9.
Tyagi, C. and Kumar, A. (2004) Consumer Behaviour, Atlantic Publishers, US
10. Appendix:
Name: _________________________
Your Occupation
__________________________
Gender
Age ___________
1. Male
2. Female
Strongly
Agree
Agreed
Undecid
Disagr
Strongly
ed
ee
Disagreed
2
1
#
Statements
1 Do you buy product and service
to meet your needs
1
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service?
10 Do you change your purchase
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behavior positively?
24 Do you agree that exaggerated
purchasing behavior?
Do you think that income and
occupation plays a role in your
buying behavior?
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