Factors Affecting Consumer's Purchasing Decision - Essay Example

?Research: Factors Affection Consumers Purchasing Decision Research: Factors Affection Consumers Purchasing Decision It is worth noting that the purchasing decisions of most customers are mostly likely to be based on risk. According to Woodside and Delozier (1976), behaviors of consumers that are related to purchase usually correspond to the perceived risk levels in a particular purchase. Therefore, understanding the perceived purchase risks among customers forms a vital factor for marketers and product manufacturers especially for goods that are associated with high risk or the high risk products. Nonetheless, technological products have in certain ways altered the purchase behavior with incorporation of performance of these intended goods to be purchased (Mohr, Sengupta, and Slater, 2010; pg. 152). Therefore, this study aims at indentifying buying preferences of customers towards sustainable technological goods which in this case will be different brands of cars. Moreover, the study aims at exploring technological elements that make some brands of cars to be highly purchased as opposed to others. Sample size of 1764 was used for the study. The result indicated that consumers purchase technological goods based on the quality, safety, value, performance, design, innovation, and environmental friendliness/green factors. Introduction Numerous factors usually affect the purchase decision of the consumer and most of these factors have been used in understanding market for specific goods and or services. Nonetheless, satisfaction of the consumer is usually pegged on the consumer’s cognitive and effective evaluation of the past experience on certain purchases. Additionally, the consumer’s purchase decision may be analyzed based on perceived risks. Therefore, understanding these elements are quite beneficial to the new or technological good manufacturers especially those who intend to introduce new goods into the market (Mohr, Sengupta, and Slater, 2010; pg. 101). However, purchasing new technological goods will require more than the risk perception on the good, but will also require limited theoretical assessment of the entire purchase process that is defined within six risk dimension that include the assessments of the performance risk, financial risk, physical risk, convenience risk, social risk, and psychological risk (Pride and Ferrell, 2012; pg. 144). Each of these dimension of purchase risks usually have different significance on product or purchase risk or context; therefore, they must be considered independently by the consumer in determining their purchase decisions (Shaw, 2003; pg. 62). Therefore, these aspects or purchase risks will be considered independently in analyzing the factors influencing the purchase decisions of consumers to purchase technological cars. Literature Review The choice of customer is usually governed by the microeconomic theory that connects the preferences to consume goods and services in relation to the consumption expenditure. Therefore, choice of the customer usually affects the consumer demand curves. The relationship or the link between consumption, personal preferences, and demand curves is usually considered business economics since it helps in analyzing how the customer often achieves the equilibrium between expenditure and preferences (Crane and Mayer, 2003; pg. 179). This analysis is usually done by considering how the consumer maximizes utility as subject of budget constraints. Preference often presents the desire of an individual to consume a good and service thereby translating to consumer choices. Notably, these choices are usually based on wealth or personal income combined with the available time the consumer has to define consumption activities. Thus, it is worth noting that consumption is distinctive of production since there are two different actors that are involved. In other words, consumption is the primary aspect of production. A manufacturer may produce a good that would never be consumed; therefore, different abilities and motivations are involved in production and consumption (Mohr, Sengupta, and Slater, 2010; pg. 172). Models that constitute consumer theory are the same ones used to present observable patterns of demand for an individual buyer based on constrain optimization hypothesis. Additionally, prominent variables form the basis of explaining the rate at which goods are purchased or demanded including the price per unit of such goods and the price related to the good as well as the wealth of the consumer. Therefore, the same principles and assumptions shall be utilized in explaining the purchase of different brands of cars. Additionally, it is worth noting the effect of substitution effect where the demand fundamental theorem governs that the consumption rate usually falls as the prices of goods increase. Therefore, no one can ever purchase an item, goods, or services that they cannot afford, despite their desire towards that good or service (Shaw, 2003; pg. 122). Therefore, an increase in price will compel the consumer to substitute the higher priced service or good with a lesser expensive alternative. Subsequently, increased income or wealth usually lead to increase in demands thereby shifting the demand curve higher towards the rate of consumption (Pride and Ferrell, 2012; pg. 193). This phenomenon usually constitutes to income effect that states, increase in wealth will make consumers to choose higher priced goods and or services but not lower priced alternatives. Could they be pegging price with quality? Nonetheless, this researched also aimed at determine the understanding of customer on the relationship of price and quality as well as the relationship between the technological goods and the prices of these goods. Preference are usually are assumed to be fairly constant; however, they changes with time (Shaw, 2003; pg. 282). Therefore, such changes are well analyzed against change in technological goods as in this case, technological cars. In fact, changes in preference usually changes the quantity demanded at a given price and this effect usually leads to a shift in the demand curve with the direction of change depending on preference change. Research Methodology This study collected data randomly through a telephone survey that targeted adults only. A total of 2,034 adults were involved; however, effective data was collected from 1,764 adults in households with at least a car. The perception of the brand is an index that was calculated as the total number a particular make was listed or mentioned as exemplar across the 7 categories. The result obtained was weighed using category importance and the result divided the total unaided brand awareness. The participants were asked the brands that exemplified the trait as opposed to being read the list of brands. This approach compensated the awareness level thereby ensuring all brands were equally presented with a chance of leading category as opposed to the well known bran or the bestselling brand (Mohr, Sengupta, and Slater, 2010; pg. 233). Therefore, the score per category reflected the number of times a particular make was mentioned to be leading based on a particular attribute; this also corrected the chances to list according to awareness. To ensure effective analysis, 20 brands of cars were targeted for the research work. The research meets the validity threshold since different car brands have adopted new technologies in manufacturing their cars; therefore, choosing of technological cars would help in understanding the purchase decision of the consumers based regarding the technological goods. Results and Discussion The most significant factors that seemed vital in this study included quality, safety, value, performance, design, and environmental friendliness/green factors as well as technology or innovation. From the raw data, working out the percentages of these factors clearly depicted the order through which they affected purchase decision of consumers when they want to buy new cars. Factor 2013 (%) 2013 (%) Quality 90 89 Safety 88 90 Value 83 85 Performance 82 83 Design style 65 65 Technology/innovation 65 68 Environmentally friendly/green 62 65 From the above statistics, it is apparent that quality and safety are the vital aspects that consumers in this region consider to be vital factors to consider before they purchase new cars. The factors are closely followed by performance and value. However, it should be noted that quality and value usually put a natural cordial consideration on the checkbook issues. Notably, technology/innovation is never a vital factor in general factors to consider for the purchase of a car. Therefore, it may be noted that consumers usually have high expectation for new cars, but they do not value this factor as key differentiator for their purchase activities. Nonetheless, narrowing down to factors considered when it comes to technology/innovation, consumer pegged their purchase of technological cars on the above factors including price. Hence, it may be concluded that keeping the income or wealth of the consumer constant, the purchasing decision of consumers usually vary in unpredicted way; nonetheless, such decision depend largely on the available factors specifically including quality, safety, value, performance, design, and environmental friendliness/green. List of References Top of Form Bottom of Form Top of Form Bottom of Form Top of Form Bottom of Form Top of Form Bottom of Form Top of Form CRANE, D. B., & MAYER, M. (2003). Executive accountability: creating the environment for business value from technology. Westport, Conn, Praeger. MOHR, J. J., SENGUPTA, S., & SLATER, S. F. (2010). Marketing of high-technology products and innovations. Upper Saddle River, NJ, Prentice Hall. PRIDE, W. M., & FERRELL, O. C. (2012). Marketing. Mason, Ohio, South-Western Cengage Learning. SHAW, M. J. (2003). E-business management: integration of web technologies with business models. Boston, Kluwer Academic. WOODSIDE, A.G. and Delozier, M.W. (1976). Effects of Word of Mouth Advertising on Consumer Risk Taking. Journal of Advertising, 5(4):12-19. Bottom of Form Read More