Sunday, January 8, 2012

consumer behavior

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Part 1 Executive Summary


This report explains the decision making process , the internal and external factors that have influences a ¡°high involvement ¡° purchase of Steve Wang that was made recently.


At the beginning of this report, introducing the demographic detail about Steve Wang and his lifestyle information. Then the product information like price, distribution and competitive position. In the part of analysis of the decision process, mainly give the theories of the process, using some tables and diagrams to make clear and understandable, in this part, the every stages of the process are discussed, include the internal and external factors that impact.


Part five gives the explanation of process and factors, the facts of the actual situations compare with the theories.


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An interview transcript is given in appendix of this report,


The biggest limitation is the lack of the experiences of analysis although everyone is a consumer.


Part Overview of the person interviewed and the product purchased.


.1 Demographic and life style information


Demographic characteristic such as age, income, family size, and employment status are objective descriptors of individual consumers and householders. The markets for most products are influenced by consumer demographic characteristics. A demographic characteristic such as age is relevant for both coffee and detergents. When marketers ask who their customers are, they frequency refer to the age, income, and regional make up of customer buying their product. Nevertheless, demographics are important as consumer descriptors because they want to buy ( age, education, marital status, household composition )


Steve Wang as a full-time college student, he has no income right now. All kinds of payment from his parents. Therefore, he has limited budget and sometimes has to shorten on the other parts to satisfy a particular purchasing like to purchase a pair Timberland shoes that is priced at RM5. this definitely is a high involvement purchase to him as well as almost all college students. Age is a powerful determinant of consumer behavior. A person¡¯s age affects his/her interests, tastes, purchasing ability, political preferences, and investment behavior. At 1 years old, people usually put more attention on whether himself/herself appearance looks good or not other than to care about him-/herself whether lack of Vitamin C or B. And they will shift to more qualitative than quantitative on choosing things. Like other guys, Steve does care about how people feel about his looks especially the girls, the well-known brands and mid-to high priced products become the most popular alternatives from his point of view even though there is not enough money budget. He is a second-year college student, it is the different level in one¡¯s life, therefore he wants to be identified from the teens like high school graduates or first year college students and be a mature man is the reason why does he choose brands like Timberland. His family has a very simple composition-father, mother and son, his father is a busy business man and mother just because a part time housewife due to father¡¯s business is getting better than before. And his budget is getting better too. There is more budget for him to use to purchase things that he likes, but he mentioned that a pair of Timberland still a big purchasing item for him.


Life ¨Cstyle variables as factors that more closely reflect the consumer¡¯s day to day interests and therefore are more likely to explain consumer purchases. Life-style is measured by the attitudes, interests and opinions of consumers. Steve has a positive attitude about life, although he worries about some common problems and situations that people worry at the same age. He always tells people--do not buy things depend on the price cheap or not, but to concern whether that product has the extent value for future and long term. Products that he wants to buy all depends on such a belief. He is some in principle oriented type, these individuals are guided in their choice by their beliefs and principles rather than by feeling, events or a desire for approval. He loves the outdoor activities, whether new products about outdoor activities, he¡¯ll try at the first time. So he is some in the action oriented ( experience ) type.


. Price, distribution and competitive position about the product purchased


The shoes ( Timberland ) is priced at RM5, that is a high priced product but acceptable. If the company has selected its target market and position carefully, then its marketing mix strategy, including price, will be fairly straight forward. The objective of timberland is product quality leadership. They decide the products have to achieve product quality leadership. This normally calls for charging a high price to over higher performance quality and the high cost of R&D. Timberland focus on the high quality, high price end of the leather athlete series, they set the price almost 5% higher than the competitors but there are still lot of Timberland lover all over the world. Timberland targets their athlete series mainly on the people aged 0-5 years. Due to this group of people¡¯s attitude, lifestyle and they want the high quality shoes for their activities. And the most important thing is this group of people they are easy to learn about the new information or to accept the new features about the product, that means, easy to change to the new product that the company introduce, they are also willing to pay such a high price compares with other brands. Usually, when people mentions about Timberland, the good quality comes first and then the high price. Therefore, the information about the timberland that people ready kept in mind a certain point. ¡°If I want high quality shoes. I pay for it because it worth.¡±


Steve bought the shoes in a franchised store of a big shopping center and he mentioned that the previous purchasing was in KLIA franchised store. The reason why Timberland put the stores in big shopping center and airports still because of its targeting and product positioning. They identify and analysis the segment of the market, the targeting customers are those who are in the higher standard level of living class the places they normally go for shopping things are also in the higher standard place. They use the exclusive distribution, giving a limited number of dealers the exclusive right to distribute the company¡¯s products in their territories.


There are a few of competitors in the marketer, but Timberland stands on several competitive advantages. At the first, it has the much higher quality than its competitors compare under the pricing, then they give the very good and comfortable environment to their customer in every store, this is a important inference; they also give the excellent services after the buying like you can bring your Timberland shoes to any of the Timberland store to clean them for free and if something wrong with the shoes they will repair it for free, in some situation the customer may get a new pair of shoes for replacement.


After all this through a longtime period, people will remember timberland as a trusted brand.


Part Consumer decision process


As usual, the customer decision process begins with the problem recognition. A difference between an existing state and a desired one become a consumer problem, a consumer begins with a particular state of mind that represents his or her perceptions of and attitudes forward known brands. For example, consider a business school student who is thinking of purchasing a personal computer. Once the problem has been recognized, an information search is undertaken to isolate an effective solution. After the information has been gathered, allowing the consumer to determine and compare the relevant and feasible alternatives, the decision can be made. The attributes that influence store choice are examined, and related to the needs of particular consumer groups. The actual acquisition of the product is analysis, with particular attention given to retailers efforts attract and satisfy consumers in the exchange process. Post purchase processes are examined by marketing managers and she/he has to make necessary decisions on that both external and internal influences affects the consumer decision making .


.1 Situational influences


A situation ( Neal 18) is a set of factors outside of and removed from the individual consumer or the stimulus object to which the consumer is reacting. The consumption process occurs within categories the communication situation, the purchase situation and the usage situation. ( Refer to table 1)


Table 1


Comm. Situation Purchase situation Usage situation


.Information has an impact . Affect product selection .The selection of a


on consumer¡¯s behavior. . i.e. a mother is influenced product depends a


.Alone or in group, in a good by the thing that her great deal on the


and bad mood, hurry or not children interest in. situation in which


( degree) it will be consumed


. The different wine


for guest and used


by oneself.


The first class of situational influence provides a system that managers can use in determine whether a situation has an effect can a consumer¡¯s purchase behavior. ( Refer to table )


Table


Physical surroundings.


.include geographical and institutional location, d¨¦cor, sounds, aromas, lighting, whether, and visible configurations of merchandise or other material surrounding the stimulus object.


.E. g shopping in the crowed and dirty hall and in the lighting place with safe music.


Social surroundings


.Provide additional depth to a description of a situation.


.The Chinese from China would rather like to discuss business during the dining time.


Temporal perspectives


. are situational characteristics that deal with the effect of time on consumer behavior.


.E.g. consumers are less likely to visit department stores when they are time pressured than when they are not time pressured.


Task definition


.includes an intent or requirement to select, shop for or obtain information about a general or specific product.


.buying gift for wedding and personal use.


An antecedent states


.Are momentary moods or conditions rather than chronic individual traits.


.E.g. some people buy a lot of things due to the bad mood he/she was in.


. Problem recognition


As the consumer mores from a very low level of involvement with the purchase situation to a high level of involvement , decision making becomes increasingly complex. Purchase involvement is a continuum, and it is also useful to consider habitual, limited and extended decision making as general decryptions of the types of process that occur along various points on the continuum.


A consumer is committed to a certain brand ( Timberland) because he/she believes it best meets overall wells, and because an emotional attachment has been fit, formed. Therefore, he/she is brand loyal. It will be very difficult for a competitor to gain his/her patronage. Extended decision making is the response to a very high level of purchase involvement. ( shopping product).


The recognition of a problem is the result of a discrepancy between a desired state and an actual state, without if there is no need for a consumer decision. Both active and inactive problem occurs in the consumer problems. There are several factors influence the consumer¡¯s actual state meet past decisions, normal depletion, product brand performance, individual development, emotions, the efforts of consumer groups and government departments the availability of products, and the current situation.


. Information search


Consumers are continually recognizing problems an opportunities, so internal and external searches for information to solve these problems are on going processes. Information search involves mental as well as physical activity on the part of consumers. The use of information from memory is referred to as internal search. And, the search process is focused on external stimuli relevant to soloing problem is called external search. A consumer decision requires the appropriate evaluative criteria for the solution of a problem. The existence of various alternative solutions the performance level or characteristic of each alternative solution on each evaluative criteria. As consumers move into more extended decision making, the relative importance of external information search tends to increase. External information can include the opinions, attitudes , behaviors and feelings of friends, neighbors and relatives; professional information; direct experiences and marketer ¨Cgenerated information.


The information sources are from memory; personal sources, independent sources marketing sources and experiential sources. Usually different measures of external information search have been used number of stores visited; number of alternatives considered; number of personal. Sources used, overall or combination measures. Market characteristics include the number of alternatives, price, and age. Store distribution and information availability. It is the consumer¡¯s perception of, or belief about, the market characteristics influence shopping behavior. Product characteristics like price level and differentiation tend to influence external search. The consumer and situational characteristics also influence the external search.


.4 Evaluating and Selecting alternative


While consumers are gathering information about various alternative solutions to a recognized problem, and after they have done so, they evaluate the alternatives and select the course of action that seems most likely to solve the problem. Evaluative criteria are the various features a consumer looks for in response to a particular problem. They are the performance levels or characteristics consumers use to compare different brands in light of their particular consumption problem. The number type and importance of evaluative criteria used differ from consumer to consumer and across product categories.


When consumers judge alternative brands or several evaluative criteria, they must have some methods for selecting one brand from the various choices. Decision rules are used by them. A decision rule specifies how a consumer compares two or more brands. Five commonly used decision rule are the disjunctive, conjunctive, lexicographic, elimination-by-aspects, and compensatory rules.


.5 Outlet Selection & product purchase


The decision used by, consumers to select a retail outlet is the same as the selecting a brand. The store is image and the type and amount of retail advertising often exert important influences as evaluative criteria. The major dimensions of store image include merchandise, service, clientele, and physical facilities, convenience. Promotion and store atmosphere. Outlet location is an important attribute for many consumers. Larger outlets are general preferred over small outlets.


Shopping orientation refers to the general approach a consumer takes to acquiring both brands and non-purchase satisfaction from various types of retail outlets. While in a store, consumers may often purchase a brand or product that differs from their plans made before entering the store. Such purchase is referred to as impulse or unplanned purchase, and the decisions can be the result of additional information processing induced by in store stimuli. Once the outlet and brand have been selected, the consumer must acquire the rights to the item.


.6 Post Purchase Processes


Following some purchases, consumers experience doubts or anxiety about the wisdom of the purchase. Whether or not the consumer experiences dissonance, most purchases are followed by product use. That consumers use a product to fulfil certain needs. If the product does not fulfil these needs, a negative evaluation may result. Monitoring product usage can indicate new uses for existing products, needed product modifications, appropriate advertising themes, and opportunities for new products. Disposal of the product or its packaging may occur before, during or after product use. ¡®socially-conscious¡¯ consumers, are an important market segment not only because of their purchases but because of their social and political influence. Postpurchase dissonance, product usage disposal are potential influences on the purchase evaluation process. Basically, consumers develop certain expectations about the ability of the product to fulfil instrumental and symbolic needs. Taking no action, switching brands, products, or stores, and warning friends are all common reactions to a negative purchase evaluation. After the evaluation process and, where applicable, the complaint process, consumers have some degree of repurchase motivation. There may be a strong motive to avoid the brand, a willingness to repurchase it some of the time, or some level of brand loyalty, which is a willingness to repurchase coupled with a psychological commitment to the brand.


.7 Influences


.7.1 Internal influences


In this report , focusing just on several relevant area about internal influences. Perception consists of those activities by which an individual acquires and assign meaning to stimuli, begins with exposure, usually the result of ¡° self-selection¡±. Attention occurs when the stimulus activities one or more of the sensory receptors, and the resulting sensations go into the brain for processing. Interpretation is the assignment of meaning to stimuli that have been attended to consumers must learn almost everything related to being a consumer product existence, performance, availability, values, preference & so on. Learning is defined as any change in the content or organization of long-term memory. Conditioning & cognition learning are used by consumers reinforcement plays a much larger role in operant conditioning than it does in classical conditioning. The strength of learning depends on importance, reinforcement, repetition and imagery. Consumer motivations are the energizing forces that activate behavior & provide purpose for and direction to that behavior. Maslow¡¯s needs hierarchy states that basic motives must be minimally satisfied before more advanced motives are activated. It proposes five levels of motivation physiological, safety, belongingness, esteem and self-actualization. Consumers are often aware of and will admit t the motives causing their behavior. Because of the large number of motives and the many different situations that consumers face. Motivational conflict can occur, in approach-approach conflict, approach-avoidance conflict and avoidance-avoidance conflict. The personality of a consumer guides and directs the behavior chosen for accomplishing goals in different situations. The relatively long-lasting personal quality that allows individuals to respond to the world around them. Emotions are strong, relatively uncontrollable feelings that affect behavior, occur when environmental events or mental processes trigger physiological changes. Attitude-change strategies can focus on affect, behavior, cognition or some combination of these.


.7. External influences


There are a lot of external influences on consumer decision making process, but here the relative influences will be discussed.


The reference group is a group whose presumed perspectives or values are being used by an individual as the basis for his or her current behavior. Marketers have found three classification criteria-membership, degree of contact and attraction to be particular useful. Groups that have frequent personal contact are primary groups, while those with limited interpersonal contact are called secondary groups. Group influence varies across situations. Informational influence occurs when individual conforms to group expectations to gain approval or avoid disapproval. Identification conformity is still stronger since an individual uses the group norms & identifies with them as apart of his/her self-concept and identity.


Part 4 Explanations in actual case


Steve first walked in the Timberland store in One Utama shopping center, he immediately felt that very comfortable, the layout & display made him easily choosing a pair pretty good shoes, that he bought as the first pair of Timberland shoes. The physical surrounding there is absolutely good as well as every its franchise stores. As people walk in the store the first display table is displaying the newest clothing and shoes, very comfortable seats for people to try the shoes just opposite the shoes displaying shelf and the every corner for a certain kind of product like classical shoes, jackets, shirts and pants, and athlete series, mountain clamber series. They have very high quality staff work in every store that makes consumers feel really good.


Social surroundings are also involves in here, Steve said that he would rather buy if the stores are in the big shopping center. A pair of Timberland shoes is considering as the shopping product in the problem recognition also a extended decision making. There is several factors influence Steve¡¯s actual state; at first, the most important one is the very good performance of the shoes, comfortable and durable, and a pretty high class design. That attracts people¡¯s attention; then, the shoes gives him a good feeling of wearing it, he said that the emotion is the important component when he makes a purchase; and last is individual development, he is now a 1 years old guy and a second year college student, not only the knowledge but also the mental have developed, he wants to make himself more mature that is the reason he chooses the brand like Timberland.


He did some compares ion works before he actually bought that RM5 shoes. Actually, he wanted to choose from 4 brands at the first time Nike, Adidas, Converse all stars and Timberland. But after he tried the Timberland he decided to buy it immediately, and several friends of him are wearing Timberland boots as well. He likes all kinds of timberland ads, he even feels those are the rest ads make him feel good. The disjunctive decision rule is used by him in the evaluation and selection of alternatives. He would first consider the design and quality of the salesman¡¯s introduction. Steve always follow the brand first, outlet second in store influences that alter brand choices, Steve said he will never buy things that his eyes can not contact, therefore the timberland¡¯s layout just satisfies him. The timberland shoes completely meet his expectation and performance quite well, he is very satisfied with it. As a result, he said if his budget permits he will buy an other pair of same brand shoes, and he has the big interest in Timberland shoes that are newly introduced. Therefore, until here he has no dissatisfy with the shoes, and he has a kind of loyalty to the Timberland brand.


And another thing has to mention here is the group influences also play an important part in his decision making, both from friends and family. Steve belongs to a group of people they have the similar life quality lifestyle, habits, even the quite similar budget, and the same or higher education level. He wants himself to be a mature man, in other words, he wants to be the same with others. there is an identification influence occurring.


Referencing


1. The Editors of INC. magazine. (18) the best of INC. guide to Marketing and selling Prentice hall press


. Assael. H. (1) consumer behavior. Behavioral Aspects of Marketing. BH ASIA


. Berry. L. L., (15) On Great Service a frame work for action. The free press


4. Bradmore. D., Joy. S., Kimberley. C., Walker. I., (17) Marketing Visions. ed Edition Prentice Hall


5. Hartley. R. F. (000) Marketing Mistakes and Successes. 8th Edition WILEY


6. Kotler. P., and Armstrong. G., Principles of marketing. th edition. Prentice Hall


7. Lovelock. C. (14) Product Plus. How product +Service=Competitive advantages. McGraw Hill


8. Neal. C., Quester. P., and Hawkins. D., Consumer Behavior. Implications for marketing strategy. ed edition. McGraw Hill


. Rice. C., (17) Understanding Customers. ed Edition. BH


10. Rice. C., (1) Consumer Behavior. Behavioral Aspects of Marketing. BH ASIA


11. Rickard. L and Jackson. K. (000) The financial Times. Marketing Case Book. ed edition. Prentice Hall


1. Schewe. C. D., Smith. R. M., (180) marketing concepts and applications. Graw Hill


1. Schutte. H., and Ciarlante. D., (18) Consumer Behavior In Asia. MACMILLAN Business.


14. Tront. J. and Rivkin. S., (000) Differentiate or die. Survival in our Era of Killer Competition. WIELY


Appendix


Interview transcript


The person who has been interviewed in this report is a full time college student.


( lunch time)


writer of the report ( W) Steve Wang ( S)


W Hi, Steve, how are you?


S Fine, but I am very busy this two weeks.


W I am sorry for using your lunch time.


S it¡¯s OK, don¡¯t mind.


W I heard from Ben ( friend of Steve) you bought a pair of expensive shoes. What is brand?


S Yes, Timberland. That is a very good brand, and very good quality. You should buy it. They introduce the women¡¯s foot wears recently.


W Really, I will try.


S You should.


W Why you choose this brand, that is expensive.


S I know, and my budget is not enough at the same time, but I just like it when the first try.


W Do you have any alternatives before you decide to buy it?


S Yes, at the first, I wanted to buy the Nike, you know , I have several pairs of Nike. Adidas is a good brand, but I just like its classical design . The one with three zebra crossing , and last month I bough the Converse all stars leather sport shoes. So I have to look for others, Timberland really makes me satisfy.


W How do you find the Timberland at the first time?


S Ads, Ya. I like all of the ads of Timberland, these are what just fits my tastes. And Ben, Jim, David they all wearing the similar design with me. Do you notice that?


W Honestly, I do not, but I notice that you all have pretty good and similar tastes.


S oh, thanks. I tell you, do not spread out. I want to be mature, and do you know what feeling that Timberland gives me.


W What are these?


S A man, durable., comfortable, cool and the spirit of adventure. Yes, all in all, a completely mature man.


W That¡¯s cool


S Yes, thank you.


W Just now, you mentioned that you like the ads of that.


S Yak! They not only have excellent ads design, but the environment of their store. I think that makes me to decide faster to buy or not .


W You mind the surroundings of store?


S Of course. The whole store, do you notice that the store almost display the man¡¯s clothing and shoes, and all thing is within my eyes sight. When I stand in front of the store, I want to go in and take a look.


W Do you want to buy if the store is in a big shopping mall or just on the street?


S Of course the more stores the better.


W Do you satisfy with the shoes you bought , and do you want to support this brand if they have new products in the market?


S Yes. Sure , if I am not satisfy then why I buy it. If I have enough budgets, for sure I will them all ( laugh). I think that in some way the Timberland shoes not only simply a pair of shoes, but also gives the good feeling. Like some people they like the perfume, not only the fragrance , but also the emotions and moods that perfume bring to people. And I believe the new designs have the new functions that the old designs do not have.


W Do you think RM5 is expensive, does that worth for these money?


S Whatever I buy , I will care about does it have any extend value in the future, not only now , how much it is, of couse it is expensive.


W If there is a store they introduce the similar shoes with Timberland, do you still choose Timberland?


S I am a kind of brand loyalty, I will still choose Timberland, but I will compare the quality and design of them. Because I can¡¯t just tell you I refuse to buy any other alternatives.


W Do the services of store effect your purchase?


S Sure, for every consumer purchasing behavior is not only to purchase something, but also a good commercial behavior. If they have the good product and poor service, the product and the services are is equally important to me. Beside, I have several alternatives that are very good, too.


W When you satisfy with its shoes, do you interest in the other product, like T-shirts and bags?


S Not as interest as the shoes, I will choose the best and the most special product in a particular store.


W If some thing wrong with the shoes after you bought it, what will you do?


S It¡¯s a difficult question, because I am always satisfied with that brand, but if something wrong about the shoes itself or I damage it. I will bring it to the store. But that has just a little effect on me.


W Does the functions and design meet you expectation?


S Yes, almost, even exceeds my expectation in some way, I am not a professional person on shoes, and some functions are really good.


W Will you introduce it to you friend?


S Of course, I will. Because I firmly believe that is a good brand and product.


W Will you be effected by your friend who wearing the same brand of shoes?


S A little bit, but, yes, the model of the Timberland ads affects me more.


W Ok, thanks you for taking the interview.


S You are welcome.





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