Consumer Purchase Analysis: Factors Affecting Decision Making Process

Consumer

Discuss about the Consumer Purchase Analysis.

Consumer purchasing behavior is complicated and multi layered process. Several cognitive factors are controlling the consumers’ choice, preference and need that lead to the purchasing decision. The consumers are engaged in purchasing and decision making process every day. He applies certain methods every time he buys a product or acquires some service consciously or not. The psychology of the consumer plays the most important role in the decision making process. Consumer psychology affects each steps of selecting, identifying, searching, collecting, interpreting and purchasing. Consumers take help from many external mediums in order to make the decision. The peer groups, own idea, other sellers and the internet help him in the process.

Age- 25

Gender –Male

Marital Status – Single

Education Level – university

Occupation – student

Generational Cohort – Generation Y

Value Segment – “Look at me”

Wants to enjoy life at its fullest

Spends time with friends

Always visits some places

Believes in spending

Enjoys shopping

Prefers television, mobile phones, laptops

Loves his / her friends

Does not care about the family

Self cantered

Does not respect other or rules

Involved in fun activities

The value segment developed by Roy Morgan focuses on the segments of people who represent the consumer and act as the drivers for choice and change (Collie and Escorcia, 2016). The consumer in this report can be categorized in the segment of ‘look at me’. According to Roy Morgan’s value segment, this segment can be identified as peer driven, unsophisticated, active and self centered (Dawes, 2015). Family is not the deciding factor to measure them. They represents the ‘decibel generation’ (Schiffman et al., 2013). The international products control most of their consumption habit. The particular generation can be defined as McDonalds, Pepsi living generation who spend lot of money. They are always busy watching something entertaining or visiting somewhere. This segment covers almost 12% of Australia’s population (Kotler et al., 2015).

Maslow need-hierarchy and consumer behavior

According to Maslow the need-hierarchy is based on human’s need for physiology, safety, self esteem, social, and actualization (Taormina & Gao, 2013).To understand the consumer behavior the theory of need, developed by Abraham Maslow (1954) can be helpful. According to Maslow, human need can be categorized in five sections. Human need related to psychology, safety, affection, esteem and self actualization form the hierarchy model from lower level of need to the higher level of need. However to reach the higher level of need the consumer must meet the lower level of needs. The lower level of needs mostly consists of the basic needs such as food, water or safety. The feeling of accomplishments and need for love are the psychological needs and finally the consumer feels the need to achieve his full potential (Caruana & Chatzidakis, 2014).

Psychographics

There are several factors which act as the drivers for maintaining the continuity of the process. The current companies engage in applying marketing strategies which are mainly focused on consumer buying habit. All the companies aim to increase their business in the market and revenue by increasing the consumers.  The behavior of the consumers is a complicated process and the decision regarding buying a specific product or from a specific vendor depends on his or her learning and experience. Consumers are selective and influenced by factors like family, peers, society, motivation and personal (Solomon, 2014). Their practice of repurchasing is also depends on previous experience and psychological factors. Customized techniques related to marketing have been adopted by the large companies in order to understand the consumers’ decision making process. The customer goes through the steps such as the problem recognition in the initial stage of purchasing, selection before deciding upon a specific product (Rani, 2014).

Figure: Consumer Buying decision making process

(Source: Made by Author)

However which products are successful in building the customer loyalty will not face such challenges easily as the customer will repeat their purchase habit similarly with the same product. Satisfied customer will not look for substitute products. It is examined that the most successful companies have achieved such success by giving importance to the consumer behavior. The cognitive learning and the psychological learning helping the company to gain customer trust (Boush, Friestad & Wright, 2015).

The consumer not only acquires the products with greater brand value but also the products that are offering additional services. The data shows that the consumer visits the Woolworth supermarket for a coke or meat frequently. The Woolworth supermarket is popular for its offers and discounts. The stores often offer many value added services, which attract the consumer to visit the place at a regular basis. The consumer sometimes purchases the necessary products through internet by using the Woolworth app. They give holiday tickets or discount coupons to its customers. As the consumer is a regular customer at the supermarket, he gets some special discounts. He has an account at the online transaction and benefits of ‘Everyday money credit card’. The consumer’s behavior can also be analyzed by dividing them into two categories such as the collective deciding process and individual deciding process (Anderson, 2013). The environment, demography and perception also play important role in these two types of deciding processes.

Personality traits

Morgenstern and Bernoulli developed the decision making theory based on the customer’s cognitive expectation and satisfaction. How the products are marketing and promoting themselves in the market is also a significant factor in the customer decision making process (Ribeiro, 2014). Example- The consumer’s purchasing of Coca-Cola almost seems to be routine response. Selecting or purchasing this product does not involve much cognitive process from the consumer. The brand is so recognized and influential to the consumer that he does not even consider other soft drinks while making decision. The promotion of the US based world renowned company is so well advertised in all visual and audio medium turned the consumer into a loyal customer.

The black box model highlights the relationship between the stimulus of the consumers and their response. The characteristics of the black box guide the consumers to response and take decision (McFadden, 2014). The consumer affects the organizational marketing strategies by actively participating from the identification to post purchase evaluation. Once the learning appears positive for the consumer he narrows down the search for alternatives and focuses on the current product.

The consumer’s age, personality, occupation, life style and financial condition influence the consumer behavior as well. In this report the subject is a young adult male consumer, who is engaged in studies and fun activities. He purchasing is dominated by fresh vegetables and meat from the supermarket, ready to eat food products, snacks and soft drinks. The electronics goods also take significant part in his consumer behavior.

From previous buying experience the consumer gain knowledge and learning (Glowik, Slawomir, Smyczek 2011). The consumer is a regular loyal customer of the Woolworth super market. Their effective advertisement of fresh food and healthy life developed a great impact on the consumer. The brand value and image is very positive. Though other multiple supermarket or grocery stores are available for the consumer, Woolworth is still his first choice. The data shows if he is visiting some other stores of similar kind like Cole, he is more focusing on some specific branded products. However when he is visiting Woolworth, a pattern is visible in consumption behavior. So in other stores he is more focusing on products which are not the store specific but when he is in Woolworth he prefers the products made by the store itself.

For electronic products or accessories the consumer shows more dependency on internet. The purchase data shows that apart from grocery or food he has purchased two electronic products and accessories in the last week. The laptop can be considered as a high involvement product.  However in both the purchasing he used the online site Kogan (Kogan.com, 2017). The consumer invested much time and thoughts before purchasing the laptop. So the service that the company delivered to him was satisfactory. He received the product on time, and the product was exactly what he expected it to be. However the post purchasing evaluation made him decide to buy another product from the same site. Though this was  just a slipping mask , but the company has succeeded to gain his loyalty and the consumer is likely to visit and buy from the site again.

Roy Morgan’s value segment

Woolworth is one of biggest grocery sales market of Australia. Approximately 29 million customers every week get service from Woolworth (Woolworths.com.au, 2017).. In its initial years it was just a food retailer, but now it covers majority of the Australian grocery market. The organization is achieving customer acceptance and loyalty by applying marketing strategies that are largely focused on product quality, customer convenience, diverse range, heath and taste conscious and lower price. The annual report (2016) shows that they continuously offer customers with rewards, offers, benefits in order to maintain customer sustainability. The meat product by the super market is praised for its freshness. The company claims that the 100% of meat is collected from authentic Australian growers and farmers (Woolworths.com.au, 2017). Their slogan of transforming Australians into ‘fresh food people’ appeals to a lot of citizens. They are dedicated to offer the consumers the most comfortable and simple ways to shop. The customers can order the service from their home by using the app or by visiting the local store. The company makes sure that the products are getting delivered to the customer’s house fast. Woolworth offers hundreds of products to its customers in order to satisfy the target consumers. They evaluate and analyze the consumer behavior and design the ranges accordingly . The Woolworth is there in 961 locations across Australia. Above that it is available online. The traveling cost is minimized for the consumer that encourages him to visit the store often. The pricing strategy of market penetration has been adopted by the company which helps the company to stay ahead of its competitors. The offers like ‘half price offers’ or birthday offers’ successfully attract and retain the customers for longer period.

As we have experienced many internal and external factors influenced the consumer’s purchasing habit. In most cases the consumer was able to make buying decision quickly but in few cases the action was delayed. He used his learning, knowledge and experience in each decision making. In most cases this consumer was not involved in the decision making process for long. This can be analyzed both ways. In one hand the involvement level demonstrates how much the consumer was interested in buying a specific product. On the other hand the consumer was possessed adequate knowledge about the specific product, so he did not require a higher level of involvement. The consumer’s frequent purchasing from a specific supermarket reflects his routine while his purchasing certain products from different restaurants required greater level of involvement. In those cases he took much time or others influence to make the decision made it a longer process. It is always the customer who decides the involvement, not the product or service.  At times the consumer has looked for various products but opted for one or none; however sometimes he wanted one or two products but ended up searching or purchasing more than that.

Consumer behavior

The consumer’s routine response behavior can be linked to his purchasing the low involvement products. In buying the low involvement products the consumer was involved in automatic buying decision. This automatic buying decision is built upon the information he has been gathering for long. The consumers purchasing the soft drink can be defined as the routine behavior. While the consumer was making the decision regarding buying a specific branded soft drink, he might not even considered other drink options than the specific brand. Whenever he needed the soft drink, he only searched for that one. It has been noticed that he bought same soft drink from different stores.

This low involvement products required little to no planning. This practice of the buyer can be defined as the ‘impulse buying’ (Muruganantham & Bhakat, 2013). While the consumer was waiting at the counter to pay for the specific product or when he was reaching to the definite spot, where the drink is available some other product might have caught his attraction. These were bag of chips or a packet of instant noodles or another bottle of cold drink, which he bought just based on his impulse. These products generally require low involvement as well. The products with high price often led to higher decision involvement. The high involvement products are not bought frequently but it was necessary and relevant for the consumer. the consumer did not engage in the discussed routine response  while buying the high involvement products. However, here the consumer engages in the process of ‘extended problem solving’. He invested more time, energy and thoughts before making the decision. Before buying the laptop from Kogan, he not only thoroughly analyzed the description of the desired product but also compared features and prices of other products. The consumer suffered from ‘post buying dissonance’ (Sharma, 2014). as he was skeptic between two products. The companies are aware that selling high involvement products can be risky for them. In order to resolve this issue, the company provides the consumer with as much information related to the product as possible.  

 

Figure: Comparison between low and high involvement product

(Source: Made by Author)

Conclusion

The studying of a specific consumer’s purchasing behavior actually helped to explore and examine the determinants of the buying decision. Consumer behavior and marketing theories have been referred and explained in order to justify the consumer behavioral pattern. During the analysing it has been observed that consumer psychology, life style and marketing stimuli pay significant role in the decision making process. The customer goes back to the vendors who he was happy with. The positive impression is extremely necessary as it leads the customer to repurchasing. The practical analysis of the world famous industrial products highlights a successful business’ policies and strategies in relationship with the consumers. Their understanding of consumer behavior and taking necessary actions to satisfy them has made them frontrunners in the world market.  The consumer in discussion is an explorer and tries various things. However for certain products he only takes service from the same vendors. The service there, fulfill his preference, need and satisfaction.

References

Anderson, L., Ostrom, A. L., Corus, C., Fisk, R. P., Gallan, A. S., Giraldo, M., … & Shirahada, K. (2013). Transformative service research: An agenda for the future. Journal of Business Research, 66(8), 1203-1210.

Boush, D. M., Friestad, M., & Wright, P. (2015). Deception in the marketplace: The psychology of deceptive persuasion and consumer self-protection. Routledge.

Caruana, R., & Chatzidakis, A. (2014). Consumer social responsibility (CnSR): Toward a multi-level, multi-agent conceptualization of the “other CSR”. Journal of Business Ethics, 121(4), 577-592.

Collie, A., & Escorcia, F. (2016, September). Breaking Habits, an application of Cognitive Behavioral Therapy for online learning and behavior change. In International Social Marketing Conference 2016 Societal Wellbeing (p. 126).

Dawes, J. G. (2015). Customers: What You Need to Know, and How You Find It. Browser Download This Paper.

Fresh Food. (2017). Woolworths.com.au. Retrieved 14 August 2017, from https://www.woolworths.com.au/Shop/Discover/fresh/fresh-food-guide?name=meat-guide&cardId=2

 Kogan.com.,(2017) | Australia’s Premier Shopping Destination. Kogan Australia. Retrieved 14 August 2017, from https://www.kogan.com/au/

Kotler, P., Burton, ‎., Deans, ‎., Brown, L., & Armstrong, G. (2015). Marketing. Pearson Higher Education AU.

McFadden, D. (2014). The new science of pleasure: consumer choice behavior and the measurement of well-being. Handbook of Choice Modeling, 7-48.

Muruganantham, G., & Bhakat, R. S. (2013). A review of impulse buying behavior. International Journal of Marketing Studies, 5(3), 149.

Rani, P. (2014). Factors influencing consumer behaviour. International journal of current research and academic review, 2(9), 52-61.

Ribeiro, R. D. C., Flores Filho, E. G. J., & De Freitas, A. C. V. (2014). Consumer Behavior and Regulation Biases: An Analysis of the Effect of Information on Food Consumption. International Journal of Business and Social Science, 5(6).

Schiffman, L., O’Cass, A., Paladino, A., & Carlson, J. (2013). Consumer behaviour. Pearson Higher Education AU.

Sharma, M. K. (2014). The Impact on Consumer Buying Behaviour: Cognitive Dissonance. Global Journal of Finance and Management, 6(9), 833-840.

Solomon, M. R. (2014). Consumer behavior: Buying, having, and being (Vol. 10). Upper Saddle River, NJ: Prentice Hall.