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Consumer Behavior and Insight

1. Introduction:

            The success of an individual firm is entirely depended upon the consumer behaviour and the market trends which also influence the consumer behaviour as well. The measure of the consumer behaviour can be used to strengthen the insight of the company. The marketers get valuable data that is needed to generate insights from the blend of the attitudinal and behavioural data of the consumers. These insights can be proven to be very useful as they paint a more profound and more precise concept of consumers across the market. These behavioural data helps the firms understand their position in the global market. The behavioural data of the consumers are also tracked to generate the suitable and personalised advertisements online for the customers. In cases of online purchases, the companies keep track of the products or the services that a customer is looking for (Wanninayake 2014). They generate advertisements to promote similar products according to the points of interest of the customers.As an advisor for the company Ensoft, a networking software development company, a thorough research on the consumer decision making process has been conducted in the below report. The entire report is to advise the manager of Ensoft about the consumer decision making process and what measures should be taken to properly understand the method.

2. Consumer Decision Making:

            The consumer decision making process is a method through which the customers identify their requirements through collecting information about the various products and services. In the decision making process, one also explores and evaluates the choices before deciding on purchasing an item.  The consumer decision making process is de ........

d to strengthen the insight of the company. The marketers get valuable data that is needed to generate insights from the blend of the attitudinal and behavioural data of the consumers. These insights can be proven to be very useful as they paint a more profound and more precise concept of consumers across the market. These behavioural data helps the firms understand their position in the global market. The behavioural data of the consumers are also tracked to generate the suitable and personalised advertisements online for the customers. In cases of online purchases, the companies keep track of the products or the services that a customer is looking for (Wanninayake 2014). They generate advertisements to promote similar products according to the points of interest of the customers.As an advisor for the company Ensoft, a networking software development company, a thorough research on the consumer decision making process has been conducted in the below report. The entire report is to advise the manager of Ensoft about the consumer decision making process and what measures should be taken to properly understand the method.

2. Consumer Decision Making:

            The consumer decision making process is a method through which the customers identify their requirements through collecting information about the various products and services. In the decision making process, one also explores and evaluates the choices before deciding on purchasing an item.  The consumer decision making process is determined by the various psychological and economic factors. Various environmental factors and social values or ethical groups influence this decision making process (Wanninayake 2014).In other words, the consumer decision making process is a method used by the customers regarding the transaction in the market. The decision process comes into play in all three cases, before, during and after the purchase of a product or service. Through a particular form of cost-benefit analysis, the decision making process of the customers can be elaborated and explained as well (Rosenbloom et al. 2012). Typical examples of the consumer decision making can include deciding the perfect product to buy or identifying one's perfect need while shopping. Hence, it can also be said that the consumer decision making is a psychological construct. This process consists of several steps by step processes(Zhang et al. 2014). The method is divided into several levels, from problem recognition to post-purchase activities. The decision making constraints differ from customer to customer. This is because every consumer has their unique requirement in their daily lives which lead them to make different decisions while purchasing a product or service (Karimiet al. 2015).

 

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Fig 01: Consumer Decision Making Model

(Source: Zhang et al. 2014)

            The decisions that are made by the consumers can often be quite complex as it depends upon the opinion of the consumer regarding a certain product. The various analyses before the purchasing, like evaluating the product, comparing the product with choices, selecting and purchasing among different types of other products set the constraints of decision making (Alaviet al. 2016). Hence identifying the core issue of the process by understanding and realising the different constraints of decision making is important for both the consumer and the firm. Through utilising the various constructive models to analyse the factors is quite necessary for the companies to get insight into their business. It is also widely accepted that the consumer purchasing theory or the consumer decision making process consists of several stages (Gainsburyet al. 2015). Depending upon the various constraints of different factors and findings regarding the consumer decision making, various researchers have developed some theories and models to understand the process better. The five staged model was the most efficient of them all and was accepted by maximum researchers. The five stages that were proposed in the model are, recognising the need, searching for sufficient information, exploring alternatives, purchase and last but not least, the post-purchase evaluation (Lo and Harvey 2012).

3. Models of Consumer Decision Making:

            The different models of consumer decision making process that is widely used and accepted and explains the process most efficiently as follows;

3.1. Economic Model:

            This model of consumer decision making assumes the consumer to be a rational person and the decisions are taken by him/her is a rational one. According to this model, the purchasing behaviour of this person would involve comparison, evaluation and purchasing (Sema 2013). In other words, in this model, the consumer is expected to compare between various products, evaluate their advantages and disadvantages and then make the purchase decision based on the collected information (Alaviet al. 2016). However, it is also true that this model is quite unrealistic as people are often limited by individual habits, skills, morals, perceptions and they are not always rational while shopping (Karimiet al. 2015).

3.2. Passive model:

            This model assumes that an individual makes his/her purchase decision according to the promotional offers of the companies and make a direct response to the advertisements and the sales appeals offered by the companies. It is quite contrary to what economic model explains as it assumes the promotional advertisements to be a crucial factor that influences the purchasing and decision making behaviour of the consumer (Lo and Harvey 2012). Needless to say that this theory or model is also quite unrealistic as the consumers are capable of collecting and evaluating the product data and explore alternatives and then make purchases accordingly (Sema 2013).

3.3 Cognitive Model:

            Among the four models that are derived and utilised to understand the purchasing and decision making behaviour of the consumers, the cognitive model is the best and most effective. According to Betsch and Haberstroh (2014), this model describes the decision making behaviour of the consumer as a factor of their own free will. The assumption of this theory or model states that the customers make their purchasing decisions based on their interests and requirements. The purchasing behaviour is influenced by the understanding of the market demand and not by any rational means or promotional offers. Moreover, according to this model, it is the responsibility of every marketer or the firm to help the clients with the development of a short and precise decision rule that would shorten the decision making process and lead to instant and efficient purchases (Sema 2013).

3.4. Emotional Model:

            The emotional model of consumer decision making state, that the behaviour of purchase of clients is influenced by their emotions. As per Fang (2012), this model assumes that the consumers make their choices in products based on their emotions. According to the model, the clients or the consumers tend to make more impulsive purchases if they become able to relate themselves emotionally to a product or service. In these cases, the customers tend to take lesser time to decide the necessity of the product or whether to buy it or not. Products depending on their impact on the consumers leave a positive or negative impact on the client (Carpenter and Yoon 2015).  Hence, the products or services with negative emotions are mostly avoided, and on the contrary, the products with positive emotions are bought by the consumer.

4. Mapping out the Decision Making Process:

            The consumer decision making process is a method through which the customers choose the most required product among all the alternatives. The decision making process differs from person to person (Betsch and Haberstroh 2014). This is because each person has their specific preferences. However, one factor has been constant for each person's decision making, and that is the entire process follows five stages through which the process can be mapped. The same goes for the sales of the Malware Defender software developed by Ensoft and monitoring the consumer purchasing behaviour towards the product. The consumer decision making process regarding the purchase of Malware Defender would also consist of five stages, such as;

4.1. Recognising the need or the issue:

            The purchase of a particular product starts off with the recognising the need or the requirement for the product to the customer. This stage consists of recognising the motive of the customer in buying the intended product. In this stage, the consumer maps out the specific reason or issues for choosing the product. Any internal or external factors may or may not influence the decision of the consumer in purchasing the Malware Defender. Also, the consumer may be driven by various internal or external stimuli to believe that the product lacks what the consumer needs and can motivate him/her to look for something else which would likely satisfy his/her problem (Fang 2012).

4.2. Searching for the necessary Information:

 

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            After recognising the problem or issue that is to be solved by the consumer, he/she pays high attention towards and becomes more receptive to gathering related information that can solve the problem. Hence the consumer starts gathering relevant data about other products or services similar to the Malware Defender, that possess the potential to solve his/her issues or satisfy his/her needs. The consumer can use the various means of resources that include both personal and commercial sources, to gather relevant and useful information. Personal sources include friends, family, peer and so on, whereas the commercial sources include television, radio, newspapers and internet (Zionts 2012). Through this various means, the consumers gather information about other more relevant product that can be more effective in solving the issue or in meeting the requirements of the customer.

 

 

 

 

 

 

 

 

Fig 02: Stages of Consumer Decision making process

(Source: Fang 2012)

4.3. Exploring and evaluating alternative choices:

            As the consumer collects the information about multiple products from different sources that can solve his/her issue, the consumer would come across several alternatives for the intended product. Through a thorough analysis of the alternative products, the consumer can decide the different advantages and disadvantages of the alternative products. Moreover, the customer can also develop a set of choices according to the attributes and characteristics of the products. After evaluating all the alternative products regarding their brand, price, store, quality and many other factors, the consumer can decide and purchase the product which suits his/her requirements, preferences, lifestyle, personality and other attributes (Kumar and Raju 2013).

4.4. Purchase or Selection and trial of the chosen product or service:

            The customer makes his/her first product trial after choosing a certain product or a variant of the product depending upon the various constraints and keeping his/her choices in mind. However, the consumer can also purchase different products in small quantities to try out the selected product before purchasing (Hwang and Masud 2012). In this way, the customer can form an opinion about the product, and from next time he/she would buy that particular variant of the product if he/she likes it. If it is the other way around, the customer would be able to avoid the product, to begin with as he/she already has an opinion about that.

4.5. Post purchase evaluation:

            After obtaining a strong opinion about a certain variant of a product that suits the various needs of the customer, he/she makes the actual purchase. In other words, it can be said that, if the consumer identifies the most suitable product that satisfies his/her every need, he/she buys the product. This includes decision making regarding the product choice, brand choice along with the price of the product (Huang and Kuo 2012).

            From the above analysis it can be said that the product Malware Defender needs to be unique at its effectivity and utility so that no other alternative anti-virus software can become its match. Only that way the sale of the product would be profited as Malware Defender would be the only most effective product for the customers above all the other alternatives.

5. Importance in mapping a path to understand the consumer decision making:

            The path to purchase or the consumer decision making process, in general, revolves around five key stage s as mentioned earlier. However, there are also some key elements that change the constraints of the decision making process. These can be the physical or psychological attribute of the consumer. In current days there are various devices through which the consumers can learn, compare, consume and share purchasing decisions. However, along with this the consumers also expect consistency from the firms. In other words, it can be said that the consumers expect the companies to recognise them and to know the information regarding their purchasing behaviour (Maniatis 2016). Hence, it is quite important for the companies to keep track of and understand the consumer decision making through mapping a certain path. The marketer can develop more efficient and tailored experience through mapping all the potential interactions that a customer might have with the firm. This also helps the company get a better measurement of the decision making process of the consumers. Moreover, the mapping of the decision making and understanding the consumer behaviour puts focus on building empathy. Through understanding the mindsets, the perceptions and the motivations of the customer, the company would be able to predict their future behaviour as well. Last but not least, another importance of the mapping is that it drives and guides the potential customers towards purchase through identifying the crucial touch points (Vohset al. 2014). In order to effectively understand the consumer behaviour towards the product Malware Defender by Ensoft, the strategy advised above must be utilised and the results must be noted down for further study.

6. Levels of Consumer Decision making:

                        Consumer Decision making can be defined as the selection of an alternative product to solve one's problem (Mihart 2012). Three levels of problem solving can be associated with the consumer decision making. These three levels of the decision making process have been described below.

6.1. Extensive Problem Solving:

            In case of the Extensive problem solving or EPS, the customer is often not familiar with the service or product genre. In this case of problem solving, the customer is not provided with any information regarding the offering of the service. Due to this reason, the customer has to conduct extensive information research and evaluation. In this extensive problem solving, the customer is not aware of the various decision criteria that are used analyse the product or service offered. Along with that, the customers are not also made aware of the availability of different brands or from which they have to evaluate the product (Maity and Dass 2014).

            The result of this extensive problem solving process is that a significant amount of effort is put onto the consumer regarding the purchase process. In this case, the consumer is required to gather information regarding the decision criteria, the availability of the brands, choosing among several brand items. The products or services which include extensive high problem solving are the goods that are of high involvement, expensive, infrequently bought or with which a considerable amount of risk is involved.

6.2. Limited Problem Solving:

            In case of the limited problem solving the consumer is often familiar with the product or service offering. However, in this case, also the customer is unaware of the various brands that are available. According to Maity and Dass (2014), it can be said that the limited problem solving or LPS is the case where the buyer is aware of the product category but unfamiliar with the brand of the product. In this case, the client is aware of some brands and also familiar with the various criteria for evaluating the product or service offering. Along with that the consumer is also unaware of the newly included brands and has not analysed the brands among the awareness set (Lysonski and Durvasula 2013). Furthermore, the consumers have also not established strong preferences amongst the brands that are available.

 

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            The result of this limited problem solving process is more related to the recurring purchase. Moreover, the process inflicts only a moderate effort on the consumer regarding problem solving. The consumer has to gather knowledge in a particular sector to add or update the existing knowledge that he/she has in the memory. Hence, a decision is needed to be made by him/her. The types of products or services that involve limited problem solving include the goods that have a low involvement, moderately priced, frequently bought or with which a lesser amount of risk is associated.

 

 

 

 

 

 

 

Fig 03: Levels of Consumer Decision making process

(Source: Maity and Dass 2014)

6.3. Routinised Problem Solving:

            In case of RPS or Routinised Problem Solving the customer is experienced and well informed about the different product and service offerings along with their various attributes. According to Frederikset al. (2015), the consumer, in this case, is aware of both the availability of the multiple brands and the different decision making criteria. This case is the depiction of the scenario that is seen in most cases in real life. The consumers are often aware of the product attributes, like its price, quality, quantity, brands and many others.

            The result of the process is that the process of the purchase involves no effort upon the consumer. The process is quite simple and is completed quickly. The purchases that are made are entirely routinised, and the consumers are habituated with the attributes of the product (Thøgersen et al. 2012). The types of product that are situated in the process are the ones that have low involvement, inexpensive, frequently bought and with which no risk is involved.

7. Influential factors of Decision making:

            The consumer decision making process can be influenced by five primary elements. Such as;

 

7.1. Marketing Campaigns: Various campaigns regarding marketing and promotional campaigns influence the purchasing behaviour and decision making process of the customers. Moreover, advertisements also play a critical role in motivating the consumers to purchase products or services (Frederikset al. 2015).

7.2. Economic Conditions:The economic condition of the consumer is one of the leading influencers of the consumer decision making process. This holds true from the perspective of cost of the product as well. As it was mentioned in the thesis of Solomon et al. (2014), positive economic condition or environment tend to influence and motivate the consumers to purchase products irrespective of their personal economic accountabilities.

7.3. Preferences: Various personal preferences in products, such as brand, type, dislikes, priorities morals and values influence the purchasing behaviour of the consumer as well (Aguirre-Rodriguez et al. 2012). These preferences differ from person to person, and hence the decision making constraints differed from person to person as well.

7.4. Influences of groups: Various influential groups that consist of family members, friends, neighbours, acquaintances tend to have a massive influence on the purchasing behaviour of the customer.

7.5. Purchasing power: The purchasing capacity of a client influences the making of the decision to purchase any product or service (Solomon et al. 2014). This is also called the purchasing power which plays a huge role in influencing the consumer behaviour.

8. Conclusion:

            In summary of the above report, it can be concluded that different attributes affect the consumer decision making process. The companies must also try and understand these factors and influences over the consumer purchasing behaviour so that they can utilise it in different processes to ensure sales. With the efficient mapping of the consumer purchasing behaviour and decision making ability the organisations can obtain a better understanding. The firms can use this knowledge and apply it to their advantage by providing the customers with relevant, brief yet sufficient information about available brands. This, in turn, would help the companies to gain sales from the consumers. Through thorough evaluation of the different stages of decision making the company can obtain insight into the decision making process and the purchasing behaviour of the consumers.