Decision Making and Consumer Behaviour Assignment
The consumer behaviour can be defined as the study of an individual or a group of customers regarding their activities and opinions at the time of product purchasing. Not only may the purchasing of the product but also usage and disposal of the goods and services include in the consumer behaviour (Solomon et al. 2012). Moreover, the emotional, behavioural and mental responses regarding the product purchasing or decision making activities also can be involved in the consumer behaviours. In other words, it can be said that the consumer behaviour is an interdisciplinary social science that brings together elements from sociology, psychology, marketing and many other sectors. These elements together evaluate the response of a certain consumer regarding the purchase activity (Horner and Swarbrooke 2016).The consumer behaviour is evaluated by examining the impact of emotions, attitudes and conflicts of preferences affect the buying behaviour of the customer. In this case, each attribute and characteristics of each customer differ from one another depending on their demographics, personalities, behavioural variables. Apart from that, each person has their own set of ideas and perspectives, which also affects in deciding the different nature in the development of the consumer behaviour (Solomon et al. 2014). In this study, as per the direction of the manager of Ensoft, another thorough evaluation of the consumer behaviour has been conducted to identify the wider issues of the consumer behaviour and consumer decision making. Moreover, the detailed study of consumer behaviour also includes the various aspects of the purchasing behaviour. The study is concerned about the various aspects of the consumer behaviour along with the consumer decision-making process. Along with that, the various issues regarding consum ........
According to Schütte and Ciarlante (2016), the Business to Business or B2B and the Business to Consumer or B2C decision making techniques have the primary aim to grab the attention of two distinct as well as different audiences. Although there are several factors which are common to both of the decision making process, however, there are several factors like driving prospects, communicational approaches etc. are different in the processes. Apart from these, the primary differences between the Business to Business and Business to Consumer decision making processes are described as follows;
2.1. Size of Markets:One of the most significant differences between the B2B and B2C decision making and marketing is the size of the markets involved in both the cases. The markets related to the consumers are much bigger than that of the business markets. However, it is also true that the size of the market related to consumers always depends upon the product (Akehurstet al. 2012). Depending upon the product, the consumer market can have mass marketing or sometimes even have a product related market which is as small as or smaller than the Business to Business markets. Hence, it can be said that, in general, the B2B markets are small and focused target market, whereas the B2C markets are bigger and tend to be a large target market.
2.2. Brand Value:In case of the business to business marketing and decision making, the brand value is developed through consultative business and personal relationships. However, in case of the Business to Consumer, the brand value or the brand identity is a factor created through the development of reputation and imagery and social media presence (Gunter and Furnham 2014).
2.3. Sales Process:The sales process in B2B or the Business to Business requires more of a selling that is based on understanding the needs of the client and development of a relationship with the customer. This is also called the development of consultative selling (Cohen et al. 2014). However, in case of B2C or Business to Consumer, the selling process is more focused on the consumer as the sales are always direct to the client or might involve a retailer.
2.4. Buying Process:The buying process in B2B tends to be more complex than that of the B2C. The buying process in B2B is complicated as the number of people involved is quite high for the case of B2B. Also, nature or the product or service that is being purchased influences the complexity of the buying process (East et al. 2016). On the other hand, the marketing and the decision making efforts in B2C are mostly directed at the individuals or the general population who are the final decision makers.
2.5. Purchase Decision:The decision of purchase in case B2B is generally influenced by the budgets and requirements. This makes the decisions taken in B2B decision making are mostly rational. On the contrary, the decisions that are made in case of B2C are more based on what the consumer wants rather than what is required. Hence, regarding B2C the purchase decisions can be called as the emotional decisions (Lockshin and Corsi 2012). In brief, it can be said that the decision made in B2B is more product influenced, while B2C purchase decisions are more relationship driven.
2.6. Purchasing Process:The purchasing process associated with the B2B or Business to Business marketing is defined regarding months. The sale process in B2B is quite complex that often take months for a transaction to complete (Biswas and Roy 2015). The purchasing process in case of B2C is comparatively quite short as it has a short purchasing period that lasts from a few minutes to a few days.
2.7. Decision making process:The buying decisions that are made in case of B2B are often influenced by the business value. The buyer in Business to business decision making process often tends to be sophisticated and understanding. It also relies on needs to buy products or services to keep their company stay profitable, successful and competitive(Foxall 2014). The buyers of the B2B market are more rational while selecting a product or service for their company. However, the buyers of B2C are more concerned about what they want rather than what they need. Hence, the products bought by them are often not thought out and buying decisions are made often based on comfort, security, status or quality.
2.8. Cost of a sale: The sales involved in B2B are more of a "higher ticket" purchases. Usually, the products from B2B cost from a few thousand dollars to tens of millions of dollars (Pérez et al. 2013). However, the sales of B2C can range in much lesser cost and the products of B2C cost from lesser than a dollar to a few thousand dollars.
According to Bakshi (2012), the market researches of the two disciplines B2B and B2C includes many of similar research techniques and tools. However, both of these marketing researches have different traits, requirements and skill sets. As per the researches of Spurlinget al. (2013), the differences in both the market research have been described below;
3.1. Different skill set:Unlike the B2C marketing research, the B2B marketing requires different skill sets at every level of responsibilities. Hence, it can also be said that one of the key areas of success to many B2B research projects is the skill sets of the telephone interviewer. This cannot be seen in the marketing research of B2C, as in B2C the business is direct with the consumers (Shepherd and Thomas 2012). However, it is also true that the telephone interviewers in B2B marketing research face a variety of problems as well.
3.2. Sample Size:In various numbers of cases, the sample sizes are smaller in B2B marketing research than that for the B2C marketing research. The sampling size in B2B marketing is often limited by the overall available sample. Because of the smaller size of the sample, the B2B research is also less common to utilise a dataset to ensure the representativeness onto and the overall sample (Luchs and Mooradian 2012).
3.3. Geographical respondent spread:In the business to business or B2B market research, the target respondents are often spread around world sparsely. This means it can often become quite impossible for B2B marketing research to conduct face to face focus groups (Mihart 2012). Unlike, B2B, the marketing research of B2C can conduct face to face focus groups as their consumers are directly connected to the business.
3.4. Importance of Tele-depth interview:As per the article by Biswas nd Roy (2015), the telephone is the most utilised tool in the business to business marketing. Moreover, as discussed earlier, respondents of B2B are globally dispersed. Hence, the Tele-depth interview works better for B2B than face to face depth interviews like B2C. However Foxall (2014) said that the Tele-depth interviews are also quite costly due to the equipment required to establish (Wikströmet al. 2014). Moreover, the Tele-depth interviews of B2B marketing research are more focused than the face to face interviews regarding the gathered information.
Fig 01: Marketing Funnel: B2C vs. B2B
(Source: Luchs and Mooradian 2012)
3.5. Addressing the Strategic need:The market research concerning B2B often addresses a strategic business need while its comparison with the B2C research projects (Rani 2014). The inclination towards the strategic business research is the symptom for the projects that are often taken to the boardroom level.
3.6. Research Methods:Various consumer research projects are focused on a specific method as their approach to research technique. This in turn also implicates that there are various agencies concerning B2C market research that focus on a certain method as their approach or technique. In case of the researches of B2B, the objectives are often set quite wide-reaching and various tools and methodologies are employed to address the research objective (Parumasuret al. 2014).
3.7. Complexity of the decision making process:One of the most significant differences between the marketing researches of B2B and B2C is the complexity that arises while the decision making processes. In case of the market researches concerning the B2C, the decisions that are made are often quite straightforward as in most of the casesonly one party is involved (Fall Diallo et al. 2013). However, in case of the B2B researches, the decision making process has to be understood from some different angles and perspectives of the different parties that are involved.
4. Impact of personality, self-motivation and customer perception over the decision making within both B2B and B2C context:
4.1. Impact of personality over the consumer behaviour:
The personality of an individual is driven by various factors which include both psychological and physiological elements. The article by Gao and Bai (2014), indicates that the personality of an individual can be defined as the characteristics that one shows while conducting an action. Personality directly influences the preferences, choices, needs and wants of a consumer. According to Furaijiet al. (2012), Personality can also be derived from the consistency of one's behaviour or reaction towards certain product or service offering. Needless to say as the personality of each consumer is unique and hence the ambitiousness, conservatism degree, competitiveness and many other elemental factors also differ from each other. Hence, in both cases of business to business and business to consumer marketing, the unique personality of the consumers leads them to take unique decisions.
4.2. Impact of self-motivation:
Motivation is the attribute that drives an individual to achieve a certain personalised goal. In the context of customer behaviour regarding decision making the self-motivation acts as a catalyst that invokes the desire for a product, experience or service. In order to accomplish a certain activity or to achieve a certain goal the self-motivation drives the needs and wants of a consumer through the purchase of necessary products and services. Motivation towards a certain objective also sets the preferences of the customer according to his/her immediate requirement (Gao and Bai 2014). Therefore, as the motivating factors and the motivation differ between the consumers, the consumer behaviours vary among the consumers as well.
Fig 02: Consumer Behaviour influencing factors
(Source: Furaijiet al. 2012)
4.3. Impactof customer perception:
The success and the failure of a company are greatly influenced by the consumer perception towards the products or the service that the company offers. The perception that a certain consumer has is based on his/her personal experience with the service or the product. Perception of a consumer decides his/her purchase decisions, which in turn influences the consumer behaviour. Both the positive and negative perception affects the decision making of a client. Positive perception leads the consumer to buy the product again, and the negative perception makes the consumer try alternatives for the product (Zabkar and Hosta 2013).
Hence from the above analysis, it can be said that the purchase of the Malware Defender would only be done by the people who have the absolute need for it. Hence, the primary target for the company should be making the software without any drawbacks so that the consumers grow a positive perception about the product.
There are two general approaches to Consumer Learning, viz., the behavioural approach to learning and the cognitive approach to learning (Zabkar and Hosta 2013).Both the learning approaches have been described below;
5.1. Behavioural Approach of Consumer Learning:
The behavioural approach of consumer learning defines the learning as a culmination of the response and the stimulus. The response can be defined as the behaviour of a certain person that occurs as a reaction towards an object, person or a situation (Muñoz-Leivaet al. 2012). On the other hand, the stimulus can be referred to as an external object, situation or person that an individual senses and perceives. The theory of behavioural approach is established on the assumption that;
- People can correlate the attributes of stimulus and response.
- People learn to combine and relate the stimulus, and the response to the relationship between the two is generalised across situations.
Predictable and observable response to specific stimuli indicates that learning has taken place (Batt and Liu 2012).
Fig 03: Cognitive learning process
(Source: Muñoz-Leivaet al. 2012)
Thus, the behavioural approach is also referred to as the stimulus-response theory. In this theory, the dynamics of the process of learning is not much concentrated on by the theorists. The major concern and focus of the theory are to view the process of learning as the response to the occurrences in the external environment of an individual. However, many also argue that the theory is not entirely accurate in the sense that the process of learning is not just a process based on reflexes (Bakshi 2012). The behavioural approach to consumer learning is often considered as inadequate as the Element of recognition has a huge contribution to the learning ability of an individual.
5.2. Cognitive Approach of Consumer Learning:
In case of the cognitive approach to consumer learning, the learning process is defined as a complex mental process. The theory states that the learning is the result of the processing of information and storage of data in a conscious mind of a living being. With the active use of the creativity, information processing, insight an individual usually solves various issues and problems (Javornik 2016). The focus of the cognitive approach is more over the thinking process rather than doing without any sense of consequence.
According to the cognitive approach to consumer learning, any activity that includes comprehensive problem solving can be considered as the cognitive approach to learning. This includes collecting, handling and deciphering information, storing in memory and retrieving at the time of need. According to the cognitive theory or learning, the response towards stimuli is not always based upon reflexes or done automatically. An individual perceives an event or an object or a situation in particular manner or perception. According to the perception, specific data and responses corresponding to the stimuli get generated, which is stored in the memory of the individual (Batt and Liu 2012). Hence in similar situationsthe stored data and responses are retrieved from the memory, and the individual takes appropriate measures. This is the same way hoe a consumer generate expectations or knowledge about products. Due to the cognitive approach to learning, consumers can make rational decisions while purchasing a product.
Various factors affect the consumer behaviour which also often influences the decision making skills of the consumer as well. Due to the influence of various factors over the consumer behaviour, different customers react to the various marketing programmes differently (Fan et al. 2012). The factors do not have the equal effect on every customer. One of the most influencing factors is the cultural variations that to some extent have the equal significance on all the consumers.
6.1. Impact of Culture on consumer behaviour:
The cultural factors have the deepest as well as the broadest impact on the consumer behaviour (Laing and Royle 2013). The set of factors that can be included in the cultural factors are as follows;
6.1.1. Broad Culture:
Culture is a quite influential, dominant and powerful factor that affects the needs and wants of an individual. Everything, including the way of living, the way how one perceives things, the way of worshipping, is determined by the culture. Therefore, every different culture has their unique set of values, ethics, customs, norms and traditions which specifically influences the perception of people, attitude towards things, interests and preferences. These elemental factors of culture determine how a consumer of a certain culture reacts towards a specific product or service offerings (Mehta and Chugan 2012). Broadly, the culture of individual influences every aspects and stage of consumer behaviour, from decision making to post-purchase scenarios. Hence, the marketer of the company must be aware of these relevant cultural aspects and the according to it the marketing programme must be conducted.
As per the research by Lamarreet al. (2012), each culture consists of smaller subcultures within it which are derived from the culture. The subcultures provide a more specific identification about its characteristics and the difference between its members and members from other subcultures. The factors which influence these subcultures have been discussed below;
- Nationality is the biggest influential factor for subcultures as it controls the behaviour of its citizens or potential consumers. Consumers from different nationalities hold different perceptions towards similar products. This difference of perception, in turn, affects the consumer behaviour (Mehta and Chugan 2012).
- Religion is and has been the most determining factor in an individual's needs and wants. Religious practices, requirements or norms sometimes even influence their food preferences, career choices, clothing sense and the overall pattern of life. Thus religious culture also affects the consumer behaviour (Baudetet al. 2014).
- In each culture, there are the different racial groups that tend to have different requirements and taste in things. This variation in preferences influences the consumers from different racial groups respond to a certain product or service offering differently.
Geographical regions affect the way of life the most, which in turn also affect the clothing, food, residence, and vehicle and so on (Mehta and Chugan 2012). Hence, as a consumer, the preferences in habits, usage rates, product usage also changes accordingly.
Fig 04: Impact of culture on Consumer Behaviour
(Source: Lamarreet al. 2012)
6.1.3. The Culture of Social classes:
Social classes are generated through the position of an individual in the society. This is often determined by what job the individual has or what financial condition is he/she in. In many cases, the social classes are also based on the caste system where members of each caste have different cultures. These differences reflect upon their income, education, occupation and their societal role (Batt and Liu 2012). Hence their choice in clothing, eating or lodging gets influenced as well. This distinct product and brand preferences affect their consumer behaviour as well.
6.2. Impact of other relevant factors over the consumer behaviour:
Apart from the cultural influence, some other relevant factors influence the consumer behavioural pattern as well. These factors are;
6.2.1. Social Factors:Social factors include the role of family, friends, and reference groups over determining the preferences of the consumer and in affecting the consumer behaviour (Fan et al. 2012).The various social factors that affect the consumer behaviour are, Family, reference groups, roles and statuses, social customs and norms and last but least, the income level of the consumer.
6.2.2. Personal Factors:The factors influencing the daily life of a consumer also affects the purchase decagons of the consumer as well (Zabkar and Hosta 2013). The various personal factors that affect the consumer behaviour are age group and stage in the life cycle, occupational differences, financial circumstances, lifestyle, personality, gender, education and so on.
6.2.3. Psychological Factors:Themindset of a customer affects the purchasing behaviour the most. Psychological factors are the most powerful regarding determining the product choice of the customer. The different elements influencing consumer behaviour are Motivation, Perception, Learning, Beliefs and Attitudes (Gao and Bai 2014).
7. Role of understanding buyer behaviour in influencing the decision making process within both B2C and B2B context:
Studying and understanding the customer behaviour is quite important for any organisation to conduct their business efficiently (Mehta and Chugan 2012). It is important for the firms to know about their consumer base every once in a while. This helps the company irrespective of its marketing approach to gain insight into the choices of their customers depending on the feedback behaviour regarding their products. Understanding of the consumer behaviour is hence quite crucial as it helps the company to understand the response of their customer and they can position their products in the market accordingly. However, following the theory proposed by Lamarreet al. (2012), the need of understanding the consumer behaviour is more important for the companies with Business to Consumer approach, rather than Business to Business approach. This is because the companies with B2C approach have direct contact with the customers and so understanding the customer's perspective, his/her needs or wants would help the company ease their business. Moreover, mapping and understanding the consumer behaviour would directly influence the Decision making process of the consumer as well. The consumer behaviour reflects the requirements, wants and preferences of the customer towards the particular product and service offering. In case of Ensoft as well, it is needed by the manager to correctly understand and evaluate the customer behaviour to analyse the consumer decision making process (Muñoz-Leivaet al. 2012). This way the company can devise a proper mapping strategy to monitor the consumer behaviour regarding the purchase of their Malware Defender.
8. Use of digital audience research developments in understanding and influencing the consumer behaviour:
Apart from the retail business, the consumers emerge much more through the internet and other digital media. Through the emergence of the E-commerce in the business of the country, the online presence of the country has increased significantly. The diversity of the consumers is even broader in case of digital audience in the market (Baudetet al. 2014). Hence, while setting up the target market or the target audience, the company must take into account all the digital audience research development data to effectively understand the consumer behaviour. The various ways through which this can be done has been briefly described below;
- Customer Reviews: Keeping track of the customer reviews would give the company insight into the consumer behaviour and their preferences in products (Laing and Royle 2013).
- Question & Answer Forums: These sites or forums are used by the company to interact with the consumers and clarify the questions and concerns that the consumers have regarding the product.
- Surveys: Online surveys are conducted by the company to gain the feedback of the consumers relating to the particular product to understand their behaviour even further.
- Keyword Research: Keyword research is one of the most effective digital audience research development, that allows the marketer to see what consumers are interested in based on their search keywords (Bakshi 2012).
- Google Analytics: Google analytics can be used to track the source digital consumer traffic. The audience tab shows a range of demographics and the specific geography where the consumers are coming from.
- Competitor Analysis: There are various competitor analysis tools available online which can use by the marketer to gain useful data about the consumers who are shopping from their competitor companies (Javornik 2016).
- Google Trends: This is another application developed by Google, through which the marketer can keep track of the products that are trending among the digital audiences or the consumers.
From the above study, it can be concluded that various factors affect the decision making process of the consumers regarding the purchase and usage of a certain product. These factors as a whole affect the consumer behaviour as well. Consumer behaviour does not only refer to the purchase or usage of a product but also refers to the perception of the individual towards a certain product, his/her needs, wants and preferences. 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. Detailed understanding of the consumer behaviour would give the company data to modify their marketing approach to gain an advantage over other competitive companies. Upon evaluation of the various influential factors of consumer behaviour, it can be stated that the consumer behaviour can be a leading element that determines the success or failure of a firm. Moreover, the consumer behaviour differs between the business to business and business to customer type marketing. These variances come from the size of market in both the cases of B2C and B2B. Along with that there is brand value, process of sale, buying process, decisions regarding the purchase made by the customer and many other factors affect the difference. The motivation and perception of the customer about various products also affect their purchase decision and preferences regarding various products. From the data collected through the report it can also be found that the consumer behaviour is based upon two basic learning processes. The consumer learning processes include the cognitive learning and the behavioural consumer learning. Both the broad and the social culture affect the decision making and the purchase behaviour of the consumers to a point where the needs and wants and preferences are also influenced by the culture.