1.Marketers commonly use the theory of planned behaviour to predict consumer behaviour. Do you agree with the underlying principles of these theories? Explain and provide support for your response.
2.Develop strategic recommendations based on consumer behaviour theories.
Consumers are very normal human beings to get engaged in activities that are related to the buying of any product or service does the psychology of the consumer gets associated with issues of same kind as in psychology: emotion, memory, cognition, judgement, group dynamics, and several others in the domain of psychology. Consumer behaviour is referred to as the act of purchasing any specific product or service. It is not the only behaviour of interest for consumer psychology. Consumer psychology deals with different aspects of consumer buying decision. However, in any particular examination one should make sure the focus remains limited (Ajzen 1991). Nevertheless, it becomes useful if there is a distinction maintained between behaviours that are focusing on any single option and the behaviours that are involving a choice between two or more alternatives.
Years and years of emotion research have managed to demonstrate the special kind of influences of different types of emotions on consumer behaviours. Multiple effects of emotion makes it harder for understanding the role played by emotions in consumer behaviour. Purchasing decision is head-on with the consumer with a lot of potential hurdles about them, the most important perhaps is structuring the problem that takes place before making any decisions; like becoming aware of the requirement, or of the availability of any product or service, along with collection of information regarding the alternatives for identification of possible future situations, or any other situations that might be relevant to the causes and decision, and along with that considering any potential outcome that is dependent on the decision (Ajzen 2011). After the problem is structured the consumer requires processing the collected information using any preferred course of action and implementing the decision at any proper opportunity. In the end, the consumers can make use of the feedback that is resulting from any purchase for re-evaluating the decision, maybe for reversing it by means of returning any bought products to the store. This kind of information can prove to be important in case of future buying decisions.
An intention of adopting any particular course of action logically comes before the actual performance of that specific behaviour. Remaining constant with this kind of reasoning social psychologists have a tendency of viewing intentions as a mediator between attitudes and actions (Ajzen and Fishbein 1977). Researches that rely on the revealed preferences for inferring decision making processes generally confront the participants with different unreal choices among-st products or services that have been defined in terms of any specific set of attributes dimensions. Hence very little amount of information can be gained about the specific that actually help in guiding the consumers behaviour. The most popular models in understanding the consumer decision making are the theory of reasoned action and its successor, the theory of planned behaviour (TPB). As per the theory of planned behaviour, intentions regarding performing in particular behaviour get influenced by three main factors: one favourable or unfavourable assessment of the behaviour, discerned social pressure for performing or not performing that behaviour, and the self-efficiency related to that behaviour. This theory is mainly focused on the particular consumer behaviour that is of interest. The goal of this theory is providing a comprehensive framework for the understanding of the determinants of consumer behaviour (Ajzen 1991).
The theory of planned behaviour actually proposes a framework regarding the way human actions get guided so that it could be put to use for predicting the occurrence of any specific kind of behaviour by the linking of four different components. These four components are: attitudes toward behaviour, subjective norms, intention, and perceived behavioral control (Ahmad et al. 2014). Different meta-analyses of existential literature has managed to provide evidence that shows that consumer intentions is possible to be predicted with a fair amount of accuracy from measuring of attitudes towards the behaviour, perceived behavioral control and subjective norms. Hence it can be understood that human attitudes their perceptions of behavioral control and their subjective norms follow reasonably and spontaneously the beliefs of people, all the while producing a corresponding behavioral intention which can in the end result in behaviour that remains constant with the whole tenor of the belief. With a fair amount of repetition, behaviour can become a routine and hence get performed without much amount of conscious consideration. Thus, the theory of planned behaviour can be blindly used for predicting consumer behaviour.
As per the diffusion of innovation theory, an innovation can be considered to be an idea or an object of practice that can be perceived as new by any individual or any group, and diffusion is same as the process by which any innovation gets communicated over time among-st the different members of any social system (Weigel et al. 2014). Even though this idea can be used for explaining the dispersal of any new idea, or object, or practice, this theory gets frequently used for explaining technology diffusion. The theory was first proposed by Rogers in 1962.
Rogers (2004), while clarifying his model further, characterize adoption as a decision for completely using an innovation. There are different stages of processing that the decision makers go through at the time of evaluation whether or not they should adopt in innovation. What Rogers (2004) refers to as the innovation-decision process is the progression starting from initial knowledge regarding an innovation towards the confirmation of the adoption decision. Inside this process is found the five perceived elements of innovation, which among-st other variables, Tornatzky and Klein (1982), put to use as the base for their meta-analysis. These five elements of innovation that are considered to be having an impact on the adoption decisions are complexity, compatibility, relative advantage, observability and trialability.
In terms of the innovation-decision process, the perceived characteristics of innovation is the concern of the diffusion of innovation model, while the theory of planned behaviour concerns itself with the variables that have an impact on the decision makers’ intention and behaviour. Both these ideas concerns itself with the perceptions of the decision maker. Hence we can understand and infer that the aspects of the theory of planned behaviour is complementary to the characteristics that get presented by the diffusion of innovations for offering additional explanatory power in regards to the decision for adopting an innovation (Moore and Benbasat 1996). Tornatzky and Klein’s (1982) seminal meta-analysis suggest that three innovation characteristics, complexity relative advantage, and perceived compatibility is crucial in providing the most constantly important associations with innovation adoption. These variables are three of the five perceived aspects of innovation that are considered to be having an impact on decision makers’ propensity for adopting, as proposed by Rogers (1962, 2004) in his diffusion of innovations model. Majority of the studies actually comprised of a mixture of the aspects from both diffusion of innovations and the theory of planned behaviour. Studies have researched the relation between the two and field testing have shown that the model is effective for use in understanding the utilization of IT.
Conclusion
These models complement each other in the fact that they are both suggesting the antecedents to innovation adoption. Diffusion of innovations is concerned with the perceived elements of innovation. On the other hand, theory of planned behaviour concerns itself with variables that are affecting the attitude of the adoption decision maker. Therefore examining both these models is crucial in providing an opportunity for better understanding the decision for adopting an innovation.
In the 21st century, marketing plays a huge part in the success of any business. Behind every successful marketing strategy there are areas that are grounded sociology in economics, psychology, and human behaviour. At the heart of all these are the key insights related to consumer behaviour or why consumers buy anything or act the way they do. Theories of consumer behaviour concerns themselves with important issues, like how consumers by as an individual in comparison to how they buy in groups, the role of emotions in buying decisions, post purchase behaviour, and the role of object utility. Having a comprehension of these issues is helpful in any assuring any marketing campaigns’ efficiency and the impact it has on consumers. For determining consumer behaviour marketers make use of several consumer behaviour theories or models (Solomon, Russell-Bennett and Previte 2012). In the present scenario with McDonalds’ new line of organic food, two theories would be used for analyzing the strategic option chosen for the organization: Open up a new Mc-Organic restaurant franchise that specializes on organic food.
Theory 1:
The first theory in this discussion is Abraham Maslow’s hierarchy of needs theory. Under this theory people behave in order to fulfil their needs that are based on a five-section priority system. these needs include safety, love, physiological, esteem, and self actualization. under this theory consumers are motivated in to prioritizing their purchases towards the base of the hierarchy. therefore it is vital that different organizations draft a kind of message that would help instill a sense of urgency or need among-st the customers. This theory has been successfully used by many marketers to create artificial needs for their customers has consumer goods most of the time serve in satisfying each of the need levels in the theory. The theory can be adapted in two ways: first, the marketers can focus on the marketing appeals that can be shared with a huge segment of the target market and secondly, provide valuable input to the positioning and re-positioning of the product. This theory is relevant when a consumer is required to move on to the higher levels, where the marketers must acknowledge that their customers have different needs and different times (Kaur 2013).
In the current scenario with McDonalds, consumers nowadays mostly prefer organic food in comparison with fast food, as they have become more health conscious. Thus, it is important that the consumers get an option of a restaurant where they can avail organic foods and do not have to worry about their health anymore. Customers prefer food that is free of chemicals, hormones, antibiotics and drugs. Nowadays they are looking for more nutrients – vitamins, minerals, enzymes, and micronutrients – which they can only find in organic food. Organic food generally tastes better as they are made from products that are nourished and well balanced. Additionally, organic food supports organic farming, which in turn supports eco-sustenance, in which farmland are kept healthy, and the whole ecology plays their role in the tapestry of ecology. Organic farming also supports reduction in pollution and protects the natural resources. So, it can be said that there is a global need for organic food among the consumers, for the welfare of the environment and their own good (Paul and Rana 2012).
It has been found by many studies that organic food consumers are more motivated than non organic food consumers. The comparison has been done taking into consideration aspects like health, animal welfare, weight control, natural content of food, environmental protection, fitness, mood and political values. Health and natural content of food are the main motivators behind the consumption of organic food. For organic food consumers price may be an important factor, but natural food and health is more important than anything. It is not just the high earning consumers who are interested in organic food, but a broad cross-section of the society are also drawn towards this kind of food and that provides an impact on the organic consumption levels all over the world . Since organic food consumers express stronger views and motivations in relation to consumption of organic food, McDonald’s must focus on diversification of their product and franchise a new Mc-Organic restaurant for such consumers. It would help the organization tap into a large part of the current market.
Theory 2:
The revealed preference theory is an alternative to the theory of consumer behaviour. This theory does not ask for the consumer to provide with any information related to himself. Considering the taste of a consumer does not change, this theory lets us understand everything we require to know, just by the observance of the consumer market behaviour, observing what are his purchases at different prices, and making assumptions that his acquisitions and buying experiences play no role in changing his purchasing needs or preference patterns. This theory is rather based on a simple idea. A consumer would decide on to buy some specific combination of products either because he or she likes it more than the other available combinations, or because this combination is cheap. Inside this theory, the preferences of the consumers gets revealed by means of their habits. At the time when a consumer selects a combination of products, that specific combination, in comparison with others, becomes the revealed preference. If a consumer chooses a combination of two apples and three bananas, instead of a combination of three bananas and two apples, it becomes a situation of revealed preference. The first combination is considered as the revealed preference in comparison with the second. The consumer would always buy the first combination and only if it’s not available would he buy the second (Caplin and Dean 2015).
In the current scenario with McDonalds, consumers nowadays mostly prefer organic food in comparison with fast food, as they have become more health conscious. Thus, it is important that the consumers get an option of a restaurant where they can avail organic foods and do not have to worry about their health anymore. Customers prefer food that is free of chemicals, hormones, antibiotics and drugs. Nowadays they are looking for more nutrients – vitamins, minerals, enzymes, and micronutrients – which they can only find in organic food. Organic food generally tastes better as they are made from products that are nourished and well balanced. Additionally, organic food supports organic farming, which in turn supports eco-sustenance, in which farmland are kept healthy, and the whole ecology plays their role in the tapestry of ecology. Organic farming also supports reduction in pollution and protects the natural resources. Thus, we can say that given an option, consumers nowadays would prefer organic food over fast/junk food (Shafie and Rennie 2012).
Conclusion
McDonalds is a well known name in the fast food industry. It has its outlets across almost all countries in the world. It boasts of having consumers from the age of 5 to 50, tapping largely its strong brand image. For a brand like McDonalds, it would be easier for them to introduce a new line of products and create a market share for it. Thus, it would be easier for them to introduce a range of organic food products and reach out to their existing customers in the existing market, along with tapping into those customers who only prefer organic food. Having a separate Mc-Organic restaurant franchise instead of having a new line of organic food menu within McDonald’s restaurant and label it as a healthier alternative is a better option for the restaurant chain because, there is a chance that the organic range may get overlooked in front of the existing McDonalds menu. Hence, having a franchise organic restaurant would be helpful in drawing strong organic food consumers and McDonalds loyal customers at the same time.
References
Ahmad, M.H., Shahar, S., Teng, N.I.M.F., Manaf, Z.A., Sakian, N.I.M. and Omar, B., 2014. Applying theory of planned behavior to predict exercise maintenance in sarcopenic elderly. Clinical Interventions in Aging, 9, pp.1551-1561.
Ajzen, I. and Fishbein, M., 1977. Attitude-behavior relations: A theoretical analysis and review of empirical research. Psychological bulletin, 84(5), p.888.
Ajzen, I., 1991. The theory of planned behavior. Organizational behavior and human decision processes, 50(2), pp.179-211.
Ajzen, I., 2011. The theory of planned behaviour: reactions and reflections. Psychology & health, 26(9), p.1113.
Caplin, A. and Dean, M., 2015. Revealed preference, rational inattention, and costly information acquisition. American Economic Review, 105(7), pp.2183-2203.
Kaur, A., 2013. Maslow’s need hierarchy theory: Applications and criticisms. Global Journal of Management and Business Studies, 3(10), pp.1061-1064.
Moore, G.C. and Benbasat, I., 1996. Integrating diffusion of innovations and theory of reasoned action models to predict utilization of information technology by end-users. In Diffusion and adoption of information technology (pp. 132-146). Springer, Boston, MA.
Paul, J. and Rana, J., 2012. Consumer behavior and purchase intention for organic food. Journal of consumer Marketing, 29(6), pp.412-422.
Rogers, E.M., 1962. Diffusion of innovations. New York: Free Press.
Rogers, E.M., 2004. A prospective and retrospective look at the diffusion model. Journal of health communication, 9(S1), pp.13-19.
Shafie, F.A. and Rennie, D., 2012. Consumer perceptions towards organic food. Procedia-Social and Behavioral Sciences, 49, pp.360-367.
Solomon, M., Russell-Bennett, R. and Previte, J., 2012. Consumer behaviour. Pearson Higher Education AU.
Tornatzky, L.G. and Klein, K.J., 1982. Innovation characteristics and innovation adoption-implementation: A meta-analysis of findings. IEEE Transactions on engineering management, (1), pp.28-45.
Weigel, F.K., Hazen, B.T., Cegielski, C.G. and Hall, D.J., 2014. Diffusion of innovations and the theory of planned behavior in information systems research: A metaanalysis. CAIS, 34, p.31.
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