Consumer Decision Making Process: Purchase of a Car - Essay Example

number Consumer Decision Making Process: Purchase of a car Module leader Module of Submission Introduction: Consumer behavior essentially describes the process through which consumers having different personality traits, characteristics and needs, select, consume and dispose of the products and services they require (Hoyer et al, 2012). Understanding this process allows business to anticipate and influence the consumer needs and react accordingly, affording them a competitive advantage over their competitors in the market. The UK auto market is dominated by key players like Nissan, Honda and Toyota (SMMT, 2013), with smaller firms competing over the rest of the market. With a 10.6% increase in overall auto purchase in first half of 2014 (Monaghan, 2014), it is important for the firms to understand their target customers and develop specific marketing plans directed towards them in order to persuade them away from other bands and towards the home brands. The key customer for this purchase cycle is a female white-collar worker in her late 20s. The consumer has either recently joined her 2nd job or has received a promotion which has increased the disposable income available to her, hence now she can think about purchasing a personal car for commuting to work and for occasional out of the city travelling. Her educational background is at least university graduate and she has a suitably active social land family life. This type of consumer is someone who can plan ahead for a long term financial investment and can become a loyal customer if provided with efficient and pleasing customer service. The following parts of the report will discuss in turn the characteristics influencing her purchase decisions for a high involvement purchase such as this and then identify a marketing plan which can be adopted to cater to her specific needs. Characteristics Affecting Consumer Behaviour Consumers don’t make purchases in isolation; their buying decisions are influenced by two distinct set of internal and external factors which motivate customer purchases. These factors are categorized as cultural, social, personal and psychological characteristics of a consumer and are unique for each consumer depending on current stage of their life (Schiffman et al, 2007). Culture refers to the holistic environment the consumer belongs to, the trends followed by the wider society will also affect the individuals’ ideas, values and identity, within the culture there could be further sub cultures or cultural trends are relevant to the individual. Social factors are also externally induced but instead of the society as a whole it refers to the personal relationships the person has and how these relationships shape the needs and motivations of the person as consumer, the social factors constitute of family, reference groups and social status and roles (Hoyer et al, 2012). Personal factors such as the age, income, gender etc of the consumer undoubtedly play a major role in defining their needs; in fact a lot of marketing efforts are specially geared towards fulfilling these personal needs e.g female targeted product, age appropriate clothing etc. For the target customer, her personal factors are the most important factor for this purchase. The need for a vehicle is directly caused by her need for transport for her job as well as the extra income that she now has because of her long term employment- it is possible that in her younger ages the latent motivation was there but the lack of affordability meant there was no action was taken (Lin, 2012). However, the final decision will also be influenced by Psychological factors such as her overall motivation ( e.g. is the car purchase a necessity for her or a luxury?) and her perceptions, leanings and beliefs towards the available car brands in the market. The perceptions developed over a lifetime of receiving, selecting and organizing information about the major car brands and their unique attributes may have already inclined her towards a certain brand or she may be learning more about the car market in the current period to make a choice which will provide her with the greatest level of satisfaction (Schiffman et al, 2007). Cultural trends like green technology and increasing awareness of environmental safety could motive the customer to look for more green-friendly options like hybrids or electric cars; this could also be the guidance provided by her reference group of similarly aged white collar workers (social factor). It is quite possible that because purchase of a car is a significant investment, the consumer will seek advice and suggestions from her social group. Types of Consumer Buying Decisions A car purchase falls under the complex-buying behavior’ for any consumer. Academics categorize buying behaviours into four categories: complex buying behavior, dissonance-reducing buying behavior, habitual buying behavior, and /or variety-seeking buying behavior (Schiffman et al, 2007). Each category presents its own challenges for marketers in terms of how to differentiate and advertise their products and services so it best portrays to the consumer the value they will gain from buying that particular brand. Habitual buying behavior is utilized in the purchase of inexpensive, regular use objects which hare often undifferentiated. Consumers are not bothered about differences in brands or features for habitual purchases. In contrast to this behavior are complex purchases which involve rare purchases of expensive, high involvement products which require a lot of information seeking on the consumer’s part and there is a lot of significance of the brand identity. Complex buying behavior can also be attributed for purchases which are highly self-expressive and impact a consumer‘s sense of identity. A car neatly belongs in this category as it is a rare purchase intended to last long term, and many consumers feel a strong attachment to their vehicles as well as the brand they chose to consumer. Many car consumers are long term loyal of particular brands either because of their prior experience with that particular firm or through social influence e.g. a daughter may choose the same brand that her father used to drive. A car purchase is a basic example of a ‘High Involvement’ product which requires increased interest and attention from the consumer as the risk of purchase is higher. The risk can either be economical risk referring to a large financial investment which would fail if the product is not up to the mark, or it can be a personal or social risk that the purchase could impact the consumer’s own self image or standing among the peer or reference group (Schiffman et al, 2007). Apart from automobiles, Examples could include luxury items, fashion accessories, electronic gadgets or devices/. Unlike, low involvement product a lot of information gathering is usually done before a high involvement product will be purchases. Dissonance reducing behavior also refers to high involvement purchases but in which the market is not highly differentiated so the consumer has difficulty distinguishing between brands and choices available. Variety seeking behavior can be both high or low involvement, but it primarily refers to impulse buying that does not require a lot of thinking or planning on the consumer’s part (Schiffman et al, 2007). Components of the Decision-Making Process The decision-making process is highly intricate when the purchase is of a capital intensive, high involvement product or service such as an Automobile. However, on average the decision behind every consumer purchase is made through the following steps which also applicable to the target customer profiled in above sections: Problem Recognition: the need for purchasing an object or service is recognized when there is a gap between the consumer’s actual and desired situation. In this case, the worker may feel the need for a more comfortable commute option than public transport or carpooling with someone else, or the decision may be prompted as a response to a change in address or overall lifestyle. In any of these cases the consumer now feels that it is the right time for her to purchase a fuel efficient car. This need recognition could be spontaneous personal insight or spurred on by a suggestion made by a coworker, friend or family member that resonated with the consumer. Information Search: immediately following the problem recognition; the consumer will start to research for suitable purchase options. The research could be as informal as asking a friend or as intensive as making comparison studies of the various brands, options features and prices available in the market by utilizing recourses such as car magazines, newsletters ,online reviews and websites, and direct consultancy with manufacturers and sales people. ‘Internal research’ can also play a part where the consumer uses her memory to select car brands that she likes because of prior experience with the vehicles, or their perceived value or brand image. As this is a high involvement purchase, it is expected that the research for the car can take up to a month until the consumer has gathered enough information to make a rational decision based on her needs. Evaluation of Alternatives: After the end of information collection, the consumer would need to assign weighting criteria to the different factors relating to a car purchase- these could be price range, mileage, fuel efficiency, aesthetics, car credit availability etc. Rationally moving through the options, she can then evaluate the benefits of each compared against the risk of purchase. This step should take almost the same amount of time than the overall information seeking process. Purchase Decision and purchase: Having decided on the make, model, brand, features of the car she requires as well as the showroom and locality from where she will make the purchase, the consumer can now make the actual purchase. There may be a time delay between purchase decision and the actual purchase depending on the availability of the required model, financial settlements etc. Post Purchase Evaluation: The time period after the sale of a high involvement product defines whether the customer will be completely satisfied with the purchase or not. If somehow her selected car is not performing up to her requirements or expectations the consumer will experience post purchase dissonance and may even be inclined to return or exchange the car. After sales service and customer support during and after the sales process can help reduce chances of such dissonance. Marketing Recommendations For Auto Manufacturer Innovative marketers can successfully use marketing tools to impact any one of the characteristics affecting consumer behavior, during multiple steps of the decision making process. Branding activities are the most important criteria for marketing an automobile as a recognizable and dependable brand with solid word-of-mouth reputation can go a long way towards attracting new customers to their cars. For high involvement products, it is not enough that the manufacturers can run above the line marketing campaigns in suitable mediums, while advertisements are important to creating brand awareness and ensuring all required information is conveniently available to the customers the firm also has to focus on alternative methods of branding (Kotler et al, 2011). Developing long term relationships with customers ensures that there is positive feedback available in the market as well as on the digital and traditional media when a potential customer is in the information seeking process. Aligning the brands with CSR activities and relevant social work can also generate good will and recognition among the target markets. However one of the most intelligent options for a car manufacturer is to make sure that the sales staff is properly trained in both understanding the individual customers and have all the relevant information about the products they are selling (Kotler et al, 2011). A courteous sale and informed staff can be huge motivator for a customer to select a certain brand and it can also help with reducing post purchase dissonance as the company can continue to support the consumer. Conclusion A high involvement purchase process will differ for every customer based on their personal needs, motivating factors and level information seeking; marketers have to be aware of these differences and create marketing campaigns and strategies designed to cater to individual customers especially in a high involvement products industry. The target customer described in the report will be influenced by her peer group and her personal factors in the ultimate brand decision and the manufacturer must be available to answer her queries in a satisfactory manner if they want to make her a brand loyal customer Bibliography Monaghan, A., 2014. UK new car sales rise at fastest rate for nine years. The Guardian. Retrieved from: < http://www.theguardian.com/business/2014/jul/04/uk-new-cars-sales-rise-fastest-nine-years > [17th Oct 2014] SMMT, 2013. Motor Industry Facts 2013. the society of motor manufacturers and traders, UK. Retrieved from: < http://www.smmt.co.uk/wp-content/uploads/sites/2/SMMT-2013-Motor-Industry-Facts-guide.pdf> [17th Oct 2014] Schiffman, L.G., Bednall, D.,   OCass, A., 2007. Consumer Behaviour Paperback. Pearson Education Australia; 4th Revised edition. Lin, W-B., 2012. Factors affecting high-involvement product purchasing behavior. Quality & Quantity, October 2013, Volume 47, Issue 6, pp 3113-3133. Kotler, P.,  Armstrong, G., 2011. Principles of Marketing. Prentice Hall; 14 edition. Hoyer, W.D.,   MacInnis, D.J.,  Pieters, R., 2012. Consumer Behavior. Cengage Learning, 10-Aug-2012 Read More