Assignment No.

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HOANG HAI DANG E2300232

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Module/Subject Information
Acknowledgement
Module/Subject Code MKT201
Module/Subject Name Consumer Behaviour
Lecturer/Tutor/Facilitator Truong Quang Vinh
Due Date 29th November
The Impact of Technology on
Assignment Title/Topic
Consumer Behaviour
Intake (where applicable)
Word Count 2176 Date/Time

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Signature: Hoang Hai Dang Date: 1/12/2024

Email: [email protected]

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Contents
1. Introduction to Consumer Behavior and Technology .................................................... 5

• Definition of Consumer Behavior......................................................................... 5

• Overview of Technological Evolution ................................................................... 5

• Connection Between Technology and Consumer Behavior ..................................... 5

2. Technology’s Influence on the Consumer Decision-Making Process ............................... 7

• Transformation of the Decision-Making Stages ..................................................... 7

o Problem Recognition ....................................................................................... 7

o Information Search ......................................................................................... 7

o Evaluation of Alternatives................................................................................ 8

o Purchase Decision ........................................................................................... 8

o Post-Purchase Behavior ................................................................................... 9

• Real-World Examples: ........................................................................................ 9

3. Personalization and Consumer Experience ................................................................ 11

• Data-Driven Personalization ............................................................................. 11

• Personalized Marketing and AI-Powered Interactions ......................................... 11

• Case Studies ..................................................................................................... 11

4. Challenges and Risks of Technology in Consumer Behavior........................................ 13

• Data Privacy Concerns ..................................................................................... 13

• Trust Issues in the Digital Era ........................................................................... 13

• Strategies to Address Risks................................................................................ 13

5. Conclusion .............................................................................................................. 15

References .................................................................................................................. 16

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1. Introduction to Consumer Behavior and Technology

• Definition of Consumer Behavior:

o Consumer Behaviour is the study of consumers’ choices during searching,
evaluating and purchasing and using products and services that they believe
would satisfy their needs. And marketers uncover consumer desires that they are
unmet or only partially satisfied by the products available and create and promote
better offerings.
The reason that makes consumer behavious important is helping businesses
understand market needs, preferences and the psychology behind purchases.
Furthermore, businesses can design and position consumers’ offerings to connect
with target audience by understandi ng how they decide upon their needs and
wants, choose among products and brands and determine their purchases methods
(Consumer Behavior Research).

• Overview of Technological Evolution:

o Over the last couple of decades, technology has transformed consumer-brand
interactions. The Internet boom in the 1990s introduced e-commerce through
platforms like Amazon. First came mobile technology, with smartphones and apps
that could keep consumers always connected and allow for personalized
engagement. Then came social media, which introduced platforms for direct
interaction and influencer-driven marketing. In addition, AI enhanced
personalization with chatbots and data-driven insights, while IoT enabled
seamless connections through smart devices. Emerging trends like VR/AR and
blockchain keep rebuilding experiences and building consumer trust (Wolff,
2021).

• Connection Between Technology and Consumer Behavior:

o The democratization of the Internet and smartphones has opened a completely
new dimension toward more access to product reviews, comparisons, and
experiences that consumers previously never had. In return, this balances out the
scale of power through enabling informed decisions by active consumers, who
demand a lot from brands. All these shifts continue to be empowered by data

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analytics, as brands are now able to individualize their offerings toward increased
personalization, thus connecting more personally with their audiences. This has
further led to more demanding and aware consumers, which equally calls for
more creative brand innovations that can survive in the market.

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2. Technology’s Influence on the Consumer Decision-Making Process

• Transformation of the Decision-Making Stages:

o Problem Recognition:
▪ Digital advertising and social media have transformed how consumers
recohnize their needs and wants. Social media platforms (e.g. Facebook,
TikTok, …) recently integrate shopping features, directing users to a
constant stream of tailored advertisements and product recommendations.
This target approach ensures that ads are relevant and attractive, helping
and increasing the likelihood of consumers identifying new needs or
desires. Moreover, social media influencers and KOLs and KOCs play a
vital role in shaping consumer awareness. Their reviews and opinions
introduce products to followers, creating a sense of trust and authenticity.
Because, nowadays, this virtual world-of-mouth marketing is so powerful
that a majority of consumers rely on recommendations from social media
influencers when maling purchasing decisions (Kowalewicz, 2022).

o Information Search:
▪ Search Engines: Among the many search engines available, complex
algorithms are utilized whereby sources of relevance and authority
guarantee users quality information in minimum time. They need just to
type in their query and relevant articles and product reviews may pop up
in a single second.
Review Sites: Consumers now access in-depth reviews and ratings written
by other users over various review sites like Yelp, TripAdvisor, and
Amazon. In turn, these platforms actually collate user-generated content to
give the details of other people's experiences concerning a particular
product or service; this helps consumers make informed choices per
others' feedback to save time and reduce poor decisions.
Social Media: Social media sites have enabled consumers to obtain
information through their network of friends and followers, and today, this
would include sites such as Facebook, Twitter, TikTok, and Instagram.
Users will see what their friends and others they follow recommend,

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 review, or discuss a product or service in real time and can interact to ask
questions and receive immediate answers. (Bartschat, Cziehso, & Hennig-
Thurau, 2022)

o Evaluation of Alternatives:
▪ Consumers have started to use comparison sites and reviews from peers
increasingly as an influencer before making choices. Comparisons are
facilitated, through various sources on one site for price, features, and
specification comparisons of various products. In this way, it will be easier
for them to make an educated decision, having a good overview of what is
available, highlighting the best offers, and finding which one suits their
needs best. The peers' reviews represent the actual life experiences faced
by other clients. Websites like Yelp, TripAdvisor, and Amazon host
numerous user reviews and ratings to assist a prospective buyer in
determining whether to buy or not to buy the product. These reviews will
normally discuss detailed descriptions of an experience, personal tales of
stories, and even ratings regarding such aspects as quality, ease of use, and
value for money. The consumer will get a good idea from reading
numerous reviews about the general level of satisfaction and repeated
issues or benefits associated with a product. Taken together, comparison
websites and peer reviews allow consumers to make fully informed
decisions more rapidly and more effectively.

o Purchase Decision:
▪ The development of e-commerce, one-click shopping and mobile
payments has been made buying easily by technology. E-commerce
platforms have totally changed customise by offering customers the
convenience of shopping anywhere and anytime. One-click shopping,
pioneered by Amazon, makes the checkout process easier by allowing
customers to make a purchase with just one click, reducing risks and
encouraging impulse buying (Echoes of Efficiency: How Amazon’s One-
Click Checkout Resonates with Consumers, 2024). And it is even easier

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 and more convenient as mobile payments allow consumers to buy
products directly from their smartphones via services such as Apple Pay or
Google Wallet. These innovations together result in an effective shopping
experience, satisfying to modern consumers' demands for speed and
simplicity.

o Post-Purchase Behavior:
▪ Such post-purchase activities as reviews and communications with
customer service bots are really of great value in terms of new customers
that can be attracted. Regarding the market, reviews are the means
whereby consumers give expression to their experience about the product
and provide relevant data to enable future buyers to make their choice.
Positive reviews tend to help a product gain trust and credibility, while
negative reviews show where the areas of improvement are. The after-
sales experience can also be amplified through customer service bots since
they are able to quickly solve problems and offer support. The process,
being the perfect way to enhance customer satisfaction, may act as
evidence of the company's promise of the best quality service and hence
could be one of the reasons for new customers to join. Overall, such post-
purchase activities viewed as transparently responsive, which are main
ingredients in giving birth to a better shopping climate and will very much
yield subsequent purchases on the part of customers (Loughran, 2024).

• Real-World Examples:
o A perfect example of how the technology directly affects the processes of
evaluation and purchase decision is the recommendation engine of Amazon. This
intelligent tool draws on the item-to-item collaborative filtering technique to
forecast the products that might interest the customer according to his browsing or
purchasing activities. Instead of finding the similarities between customers,
Amazon can offer the most relevant recommendations which could be the
shopping experience that is most satisfying to the customer. For example, if a
customer checks out with a camera, it might recommend the use of compatible

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lenses, tripods, and memory cards. This works only in the case when customers
find products they didn't even know they wanted, and at the same time, Amazon's
revenue is going up due to more products being sold. The recommendation engine
of Amazon is one of the most important elements in its e-commerce strategy,
which it has done with precision and efficiency, contributing a lot from the
customer's perspective to make a decision to buy (Hardesty, 2019).

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3. Personalization and Consumer Experience

• Data-Driven Personalization:
o Companies use data analytics, AI, and machine learning to analyze consumer
behavior and make personalized recommendations. By gathering large volumes of
data from multiple touchpoints-purchase history, browsing patterns, and social
media interaction-companies can get deep insights into individual tastes and
preferences. AI algorithms process this information to identify trends and predict
future behavior; thus, enabling companies to offer personalized product
recommendations and targeted marketing campaigns. For instance, Starbucks
employs a digital flywheel program where food and drink items would be
suggested to a customer by their previous orders, location, and even weather. All
these personalizations enhance the customers' experience, increase engagement,
and drive sales since consumers receive the right suggestions at the right time
(Marr, 2024).

• Personalized Marketing and AI-Powered Interactions:

o AI-powered ads, product recommendations, and chatbots improve the user
experience. It therefore raises user engagement and brand loyalty. Companies
leverage AI for the analysis of huge volumes of consumer data; hence, it delivers
highly personalized ads that best resonate with individual preferences and
behaviors. For example, AI algorithms predict which products a consumer is
likely to be interested in based on their history of browsing and purchasing;
hence, more relevant product suggestions. Also, chatbots support the customer
through quick query response and issue resolution, resulting in higher customer
satisfaction. The experience is seamless and personalized in nature, building trust
for loyalty and repeat business between the consumer and the brand through such
AI touchpoints (Edelman & Abraham, 2022).

• Case Studies:
o Louis Vuitton's "My LV" line is an excellent example of a successful personalized
marketing campaign; the customers are allowed to personalize their products to
such an extent that it almost feels custom-designed for them. Louis Vuitton offers

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options for monogramming and choosing unique color-and-material
combinations, adding an exclusive touch and personal connection to the brand.
The campaign does not only help in increasing customer satisfaction but also
helps in generating user-generated content since the customer is very likely to
show off his or her customized item on social media. This approach helps Louis
Vuitton stay among the leaders in the luxury market, where tradition is mixed
with the most up-to-date personalization methods (10 Great Examples Of
Personalized Marketing Strategies, 2021).

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4. Challenges and Risks of Technology in Consumer Behavior

• Data Privacy Concerns:

o More and more consumers are aware of their data privacy and how it might be
used against them. High-profile cases, like the case of Facebook-Cambridge
Analytica, increased these kinds of fears. Cambridge Analytica had taken data
from tens of millions of Facebook users who did not give permission, then used it
for political ad targeting. Such a trend significantly impacted the 2016 U.S.
presidential election (Goswami, 2020). This breach in trust brought wider
awareness of the ways in which personal data can be exploited, thus demanding
greater regulation and greater transparency by companies. This has subsequently
made consumers aware of how their information is collected, stored and used and
thus they are demanding better protection and accountability from businesses.

• Trust Issues in the Digital Era:

o Data breaches can clearly devastate consumer trust and brand loyalty. In the event
of a data breach of any organization, sensitive customer information gets exposed,
and thus confidence in the brand to protect personal data gets lost. A similar case
happened in the Facebook Cambridge Analytica scandal, in which user trust got
seriously breached and the backlash was huge all over. Also, in 2017, there was a
breach in Equifax due to which the sensitive personal information of more than
147 million individuals got leaked, which later brought huge consumer
confidence loss and caused further damage to its brand reputation. These
incidences show the post-instances of data breach, as it really takes time for these
companies to win back consumer confidence and loyalty, which has a direct effect
on the marketplace and financial results (Makridis, 2021).

• Strategies to Address Risks:

o Businesses can also create various data privacy challenges with more
transparency in their data policy, increased cybersecurity measures, and the
development of trust with the help of various third-party verifications and
certifications. Transparent data policies ensure consumers understand everything
about the collection of information, usage, and security, therefore developing trust

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and accountability in all ways. Strengthening cybersecurity involves adopting
advanced security protocols such as encryption, multi-factor authentication and
regular security audits that are geared towards protecting sensitive information
against breaches. Moreover, ISO/IEC 27001 certification or third-party
verification will prove that an organization is seriously concerned about data
protection and adheres to industrial standards. These strategies together work to
increase consumer trust and reduce risks related to data privacy (Saeed, Altamimi,
Alkayyal, Alshehri, & Alabbad, 2023).

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5. Conclusion
The technological development has drastically empowered consumers by better informational
access, enhanced personalization and smoothing decision-making processes. The Internet,
mobile technology and AI-driven tools have revolutionized the recognition of needs, evaluation
of options and making purchasing decisions by consumers. Data analytics and machine learning-
powered personalized experiences have deepened consumer engagement and loyalty. These
developments also have their challenges, such as data privacy, trust in data handling, and the
risks of cyber-attacks.

So, to succeed in this dynamic landscape, firstly, businesses should have appropriate
cybersecurity to protect consumer data and minimize breaches. Secondly, they should use AI and
machine learning responsibly, offering personalization without intrusion of consumers' privacy.
Thridly, they should exploring innovative tools like AR, VR and blockchain to create immersive
and trustworthy consumer exeriences. And last but not least, be transparent, work out
transparent, forthright data policies that foster trust fot a long-term relationship with customers.

Virtual reality and the metaverse will continue to shape the future of consumer behavior. These
next-generation technologies will let consumers immerse themselves in digital brand experiences
that will change the way people explore products, make decisions and connect with companies.
Embracing these technologies-and finding ways to work through their challenges-will open new
pathways for companies to meet the needs of consumers and redefine the customer experience in
the digital era.

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References
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Bartschat, M., Cziehso, G., & Hennig-Thurau, T. (2022, 3). Searching for word of mouth in the
digital age: Determinants of consumers’ uses of face-to-face information, internet opinion
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Echoes of Efficiency: How Amazon’s One-Click Checkout Resonates with Consumers. (2024, 1
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efficiency-how-amazons-one-click-checkout-resonates-with-consumers/

Edelman, D. C., & Abraham, M. (2022). Customer Experience in the Age of AI. Harvard
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Goswami, S. (2020, 12 14). The Rising Concern Around Consumer Data And Privacy. Forbes.
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Hardesty, L. (2019, 11 22). The history of Amazon's recommendation algorithm. Retrieved 11

22, 2024, from https://www.amazon.science/the-history-of-amazons-recommendation-
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Kowalewicz, R. (2022, 4 28). How Social Media Impacts Consumer Buying. Forbes. Retrieved
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Saeed, S., Altamimi, S. A., Alkayyal, N. A., Alshehri, E., & Alabbad, D. A. (2023). Digital
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