What Affects Decision Making Process in Consumers of Sony Led Televisions - Case Study Example

TABLE OF CONTENTS Particulars Page No 1.0 Executive Summary 2 2.0 Introduction 3 3.0 Consumer Behaviour 4 4.0 External Factors Affecting Consumer Decision Making Process 4 4.1 Culture 5 4.2 Sub-Culture 5 4.3 Social class 6 4.4 Reference Groups 7 4.5 Family and Family Life Cycle 8 5.0 Other Specific External Factors 9 5.1 Role of Opinion Leaders 9 5.2 Diffusion of Innovation 10 5.3 Public Policy, Legislation Consumer Protection 11 6.0 Conclusion 11 7.0 References 12 1.0 Executive Summary The report has been drafted to discuss on the topic external factors affecting consumer decision making process where Sony Led Televisions have been taken as a specific product to ensure easy and better understanding. The discussion is divided into two parts where initially the reports discusses the societal external factors in terms of culture, sub-culture, social class, reference groups, family and family life cycle with real life examples affecting consumer decision making process. In the later part of the report specific factors such as opinion leadership role along with role of diffusion of innovation and public policies, consumer protection affecting consumer decision making process has been explained in detail. The report further looks to draw conclusions and marketing theories of how certain specific factors are more important than others. Finally a conclusion is provided to ensure both practical and theoretical understanding of the entire topic under study. 2.0 Introduction The report has been prepared with clear objective to identify and explain the various external factors affecting consumer decision making process. Further to ensure that the report provides a more clear and easy understanding the report explains the external factors affecting consumer decision making process in context to Sony Led Televisions in specific and other products and services in general. Sony is a multinational company with its products ranging in consumer goods segments from televisions to mobile phones, washing machines, refrigerators, cameras etc. It is a name trusted and preferred all across the globe and its business operations in parts of the globe. The report here looks to specifically identify the external factors affecting consumer decision making process of Sony Led Televisions in specific and other consumer products in general. The report is segmented into two major categories which include societal external factors and other specific factors affecting consumer buying pattern. Societal external factors further makes a clear discussion in terms of other sub-factors like culture, sub-culture, family life cycle, reference groups and social class whereas the other specific factors includes a discussion on specific factors such as role of opinion leaders and diffusion of innovation along with how public policies, consumer protection, ethics and legislation have an impact on the consumer decision making process. Finally a conclusion is provided to ensure a theoretical and practical understanding of the entire topic under study. 3.0 Consumer Behavior The topic revolves around the objective of external factors affecting consumer decision making process. Before looking into the same it is important to understand the concept and meaning of consumer behavior which has been discussed as under. Consumer behavior is a unique characteristic of consumers which may vary differently among different consumers however the same usually follows a series of five different stages which includes need recognition, choice or selection, actual purchase, consumption of desired goods and satisfaction derived from the same (Daniel, Charls & Joseph, 2003). The entire process of consumer decision making process is affected by various internal and external factors which are constantly eyed upon by marketers to ensure their products or services gain competitive edge over their rivals. Let us now look at the external factors affecting consumer decision making process in context to Sony Led Televisions. 4.0 External Factors Affecting Consumer Decision Making Process Unlike internal factors which have a direct influence on the consumer decision making process there are many external factors which equally have a deeper impact on the consumer decision making process. The external factors here has been subdivided into two categories which includes societal external factors and other specific external factors influencing consumer buying pattern which in context to Sony Led Televisions have been explained as under. Let us first have a look at the societal external factors affecting consumer decision making process explained as under. 4.1Culture Culture is one of the strongest societal external factors affecting consumer decision making process. Culture in context to marketing refers to similar beliefs, taboos, values and attitude of a group of individuals towards a specific product or services. Culture is not developed overnight and is imbibed in an individual through a very tender age and is negligently invisible in daily life (Daniels, Radebaugh & Sullivan, 2007). Culture acts as an important influencing factor in context to consumer buying pattern, for instance, in Asian countries particularly in India there is a culture of having more than one television set in a particular house for different children belonging to the same family. Culture can further be largely reviewed in food habits, dressing styles, languages, religion etc. For example, the general tendency of consumers is to ensure future savings and security directly impacting the propensity to save and consumer. Sony Led Televisions looks to offer different sizes and variants with price range among the same so as to ensure that products are developed as per consumer requirement and fulfill their cultural beliefs and requirements. Logos and Symbols have been extensively used to draw inferences from Culture, for instance, Honda uses the symbol “H” in the Asian countries as they represent Heena which is largely used in Indian as a tattoo on hands during festivals and wedding ceremony thus directly targeting the cultural aspect of consumers (Doole and Lowe, 2001). Sony for its Led Televisions looks to offer discounts during festive seasons so as to target upon the cultural beliefs of consumers and persuade them towards their products than losing the customers to their near rivals. 4.2 Sub-culture Sub-culture is the smaller fragment or division of the dominant culture with individuals having the same beliefs and attitude towards a specific product or service however they differ from their primary culture. It is however to be noted that individuals to similar sub-culture have many attributes common to the dominant culture like geographical locations, ethnic backgrounds, similar religious beliefs etc. Age, gender and household of a sub-culture are other prominent factors which are eyed upon by the marketers. For instance, Sony Led Televisions are offered with bulky discounts during sports seasons particularly during Cricket World Cup in India to attract more of younger generation towards the product. Furthermore, Sony for its Led Televisions looks to equally target both genders with advanced features like games and sports views for men and bright, vivid and soothing sound for women (Brassington and Pettitt, 2001). 4.3 Social Class Social Class in a nutshell refers to similar or homogenous groups or segments within a society carrying similar beliefs, attributes and societal status. Segmentation or identification of social class is generally categorized on basis of income levels however the same is to strictly noted it is not the only means of identifying a social class and consumption pattern in such a case may vary greatly (Cook & Dave, 2004). Social class is closely eyed upon by marketers as different marketing strategies and products are developed as per specific target and identification of different social class. For a better understanding of the same let us have a look at the marketing strategy of Sony in context to its televisions. Social Class Marketing Strategy of Sony Televisions (LED) Upper Income Level Group or Social Class Sony develops its special category of HD Bravia LED televisions which comes with advance features like motion sensors, sound adaptability and other innovative features. Middle Income Level Group or Social Class Lesser advanced features in comparison to the upper income group designed features. Features such as gaming experience, sound adaptability etc forms a part of these products (Canhoto, Clark & Fennemore, 2013) Lower Income Level Group or Social Class Sony here designs basic televisions which fall under the category of LCD or simple television boxes with no HD features or advance features like sound or picture adaptability. 4.4 Reference Groups Reference Groups acts as important persuaders in the consumer decision making process particularly in context to consumer goods segment. Reference Groups are groups of people who exert some common values or attributes and persuade or influence others towards a specific decision. Reference Groups can be generally categorized into two major segments comprising of the Primary Reference Groups (Friends and Family) and Secondary Reference Groups (colleagues, close acquaintances, batch mates and other formal and informal groups or individuals). The role of Reference Groups gains dominance in situations where the ultimate buyer or consumer is in a confused or conspicuous frame of mind and seeks for advice towards a choice of the product which is more acceptable to the reference groups with whom the buyer is most closely associated. In context to Sony Led Televisions the product can be categorized as necessity goods for lower and middle income level groups however the same constitutes as luxury item from the upper-middle and upper income level groups due to advanced features and upgraded technology which makes the television a real time fun experience. Televisions in general to all segments of social class fall under the category of conspicuous goods and are generally linked or compared their rivals in terms of brand recognition and superior quality along with consumer feedbacks and after-sales services (Drummond and Ensor, 2001). It is to be however noted that Sony generally does not looks to target or develop strategies for a particular reference group but however looks to build upon its superior quality and brand recognition so as to influence all reference groups. 4.5 Family and Family Life Cycle Family is one of the strongest influential reference groups as a consumers buying pattern and behavior is strictly guided by beliefs, thoughts, values, attitudes and existing consumption pattern of its specific family. Interaction between family members along with age and size of the family also acts as subsidiary factors while making a purchase decision for instance a nucleated family may look towards mid-range Sony Led Televisions than towards automatic and highly advanced HD televisions because of its limited use in comparison to a larger sized joint family. A family consists of different members who act as supporting members to the final decision maker. In context to Televisions it is difficult to identify the ultimate final decision maker however surveys in the past reflects more of male members acting as final decision maker to the purchase of Televisions than female members (Duncan, 2008). Thus, advertisements are generally developed to target both genders of humans. Furthermore it is to noted that family generally tends to follow a sequential family life cycle which consists of varying stages of life starting with small children, young bachelors, newly married couples, couples with dependent children and later couple with independent children to finally the old age group (Chen, 2003). Sony Led Televisions are largely targeted towards young bachelors who look towards upgraded and innovative features like real gaming experience etc along with couples with dependent and independent children who mostly acts decision makers to the final purchase of the product in their family. 5.0 Other Specific External Factors The societal external factors affecting consumer decision making process has already been explained above. Now let us have a look at more specific external factors affecting consumer decision making process. 5.1Role of Opinion Leaders Opinion Leadership is a synchronized process consisting of two distinct individuals. One is the opinion leader who possess certain attributes and characteristics to influence the actions and decision making of other who is known as the Opinion Receiver. Opinion Leaders are generally liable source of information and are often referred upon by the ultimate buyer in context to making a choice between different alternatives available. Opinion Leaders are experienced people and are reliable and trusted source of information for the purchasers. In context to Sony Led Televisions, the salesmen at the showroom act as one of the opinion leaders who motivate, persuade and ultimately ensure sales of the products by providing valuable information to the potential consumers about the reliability, durability, price, longevity and superiority of the desired product over other competitors (Chrisan, 2001). Furthermore company official website, pamphlets, brochures, hoarding etc also act as opinion leaders in different style and formats. Internet is the latest buzzword, and Sony ensures that its official website is user-friendly and allows user to make a comparison of Sony Led Televisions with competitors and then make a final purchase decision. 5.2 Diffusion of Innovation Innovation is something which is always eyed upon by both the marketer and ultimate consumer. Innovations allow the products to be of superior quality and persuade and motivate consumers towards a specific product or service (Berkman & Gilson, 2001). However there is always an associated risk with innovation as there is a high chance of market failure or acceptance associated with it. Furthermore innovation plays a crucial role in reviving the products from declining stage to growth or introduction stage with its advanced features. For instance, Sony saw a decline in its LCD televisions which were replaced by LED and HD television sets which is much accepted by consumers. Furthermore, Sony Led Televisions are now designed with low electricity consumption with different star rating which determine the price of the products having same configurations. Thus there is an associated risk of innovation not only just to market failure of the product but the company emerging as competitor to its own varied ranges of televisions with different star ratings. 5.3 Public Policy, Legislation and Consumer Protection Public Policies, Legislations and Consumer Protection are other specific external factors which can impact the consume decision making process. For instance in context to Sony Led Televisions, different countries in which Sony operates has different tax structures, subsidies, limitation on imports and exports etc which directly affects the price of the products and ultimately the sales (Clegg & Walsh, 2004). As consumers may feel a similar product with same features made domestically is much cheaper to the price offered by Sony and may largely influence the consumer decision towards the ultimate decision of purchasing a Sony Led Televisions. Furthermore, consumer protection is equally important in today’s scenario and fair dealings are expected from all sellers which again impacts the consumer decision making process as a product which has been previously experienced by consumer as a complete failure to its guarantees and promises made shall be at higher risk of repetitive purchases. 6.0 Conclusion The report has been drafted to highlight upon the external factors affecting consumer decision making where the discussion has been divided into two parts i.e. the societal external factors and other specific factors. All such factors have been explained in context to Sony Led Televisions in specific and other consumer products in general. Furthermore the report uses marketing principles and theories to ensure both practical and theoretical understanding of the entire topic under study. 7.0 References Berkman, H. & Gilson, C. (2001). Consumer Behavior Concepts and Strategies, Kent, Boston Brassington, J. and Pettitt, M. (2001). Principles of Marketing, 2nd Edition, Prentice Hall Chrisan, P. (2001). Marketing: A Behavioral Analysis, McGraw – Hill. New York Clegg, C. & Walsh, S. (2004). Change Management: Time for a change. European Journal of Work and Organizational Psychology, 13 (2), pp. 217-239 Chen, I. (2003). Understanding Customer relationship management: people, process and technology. Business Process Management Journal, 9 (5), 672-688 Cook, D. & Dave, D. (2004). Structural element of service quality product. International Journal of Business Performance Management, 6 (2), 189-207 Canhoto, A., Clark, M. & Fennemore, P. (2013). Emerging segmentation practices in the age of the social customer. Journal of Strategic Marketing, 21 (5), 413-428. Doole, I., and Lowe, R. (2001). International Marketing Strategy. 3rd Edition, Bedford Row, London, Thomson Daniel, C., Charls, L. & Joseph H. (2003). Marketing, 5th edition, south-western. New York. Duncan, T. (2008). Principles of Advertising & IMC, 2nd ed. New York: McGraw-Hill/Irwin Drummond, G. and Ensor, J. (2001). Strategic Marketing, planning and control, 2nd Edition, Butterworth Heinemann. Daniels, J.D., Radebaugh, L.H. & Sullivan, D.P. (2007). International business: environment and operations ,11th edition. New Jersey: Pearson Education Read More