The consumer's decision making model deals with the procedure of consumer decision making. This model involves three phases the Input stage; the Process stage and the out put level.
The input level can be broadly categorized into Businesses initiatives and Socio-cultural Environment. The firm's efforts relate with the organizations marketing combine, i. e. Product, Advertising, Price, Channels of Distribution, People and Physical facts. This stage requires the activities the company undergoes to sell their products. Socio-cultural environment on the other palm is the environment of friends, family, modern culture, culture and sub culture that encompass a consumer.
The input level influences a consumer's decision making. The decision-making is the next stage called process. On this stage the buyer does him pre-purchase research and analysis predicated on the firms work and socio-cultural environment. The firm's attempts and socio-cultural environment affect a consumer's psychological field. The mental health field includes Motivation, Understanding, Learning, Frame of mind and Personality of the consumer. This level also evaluates days gone by experience of the consumer.
The final level in the consumer decision-making is the End result stage. This stage is concerned with the real purchase, repurchase and the purchase evauation.
Cognitive View explains decision making from the thinking problem solver's perspective. Corresponding to Cognitive view, decision-making can be an mental or reasoning process, which can be rational or irrational and can be predicated on explicit assumptions or tacit assumptions. The main characteristic of the view is the fact, a consumer is in pursuit of information until a reasonable solution is found. Once the sufficient solution is found, the process of collecting information is terminated.
Problem solving view defines a consumer who lays between your two extremes of passive and economical view. It really is believed that a consumer cannot have all the knowledge of all solution products. Hence the consumer's decisions are not perfect. But nevertheless the consumer positively looks for information and makes an attempt to make adequate decision.
In a cognitive view, the buyer has a predefined goal. The next step is action plan or way to attain the goal. The third step is execution of this action plan and controlling it. The final step is attainment or inability of Goal.
Consumer Decision Making and Cognitive Learning.
As defined previously, the first step in virtually any decision-making is a need reorganization or goal. A consumer's cognitive learning relates to pre-purchase search and analysis of alternatives.
For example, if a person is looking to buy a car he will first make a decision what features will he want in his vehicle. Whether his first choice is safety or performance. Based on this evaluation he will assess various car models available in the market.
The consumer's subconscious field should come into play once he has recognized his goal. The cognitive learning coupled with frame of mind, personality and recently will form a perception in a consumer's brain. This belief will thus motivate a consumer make a purchase decision.
A firm's marketing initiatives play a very important role in influencing cognitive learning process. Over time the marketers has provided the consumers with information to make sure they are believe that they may have sufficient knowledge and thus spur the decision making process.
The best example of this can be seen as the "Free" or "Sale" adverts. These adverts communicate that something is free or there is a sale on. This "Free" or "Sale" sticker on the home window display of store will do to attract the consumers inside the store.
Marketers have used Promotional Model and Diffusion of Innovation to affect the consumer's cognitive learning. The promotional model targets Attention, Interest, Desire and Action.
The "Sale" sign is to get the costumer's attention. "Up to 50% off" written under the sales sign is to generate interest. Store design and reduced prices to instigate the desire and marketing campaign to cause Action. There is certainly silent need of an consumer to buy clothes. As soon as the consumer results in the "Sale" sign, the final little bit of information is received that instigates action.
The marketer's over time bring in new technology and new products, using the Innovation Diffusion, to impact the person's cognitive learning and therefore drive sales.
Various automotive companies use the cognitive model to comprehend their customer and hence sell their automobiles. The buys such as cars, which are costly, are generally well thought out. The customers generally execute a through pre-purchase research and examine their alternatives prior to making the purchase. Hence to catch the attention of these customers, the marketers promote their products with test drives, and other adverts that emphasis mainly on the features of the vehicles.
Hierarchy of Needs
It can be argued that individuals looking to satisfying self-actualization need might need complete information in regards to a product. Their cognitive learning process can vary greatly from that of those aiming to satisfying physiological, safety, communal and esteem needs. But still, cognitive learning is perfect for fulfilling every need on Maslow's Hierarchy of Needs. The amount of information obtained might differ, but learning and information handling will be regular at each level.
Passive view believes that may be manipulated by self-serving hobbies and promotional initiatives of the marketers. To a certain degree this model can be believed to be true. But the passive model does not recognize a consumer plays the same role to make the purchase decision. The buyer does indeed make pre-purchase search and evaluation before buying goods.
This model can be applicable in case there is B2C where the customer is completely unaware of good and the internet entrepreneur is in position to manipulate the consumers. This is mainly evident in case of tourists. Local retailers and marketers in many places often change tourists. Since the tourists have hardly any market and product knowledge, sales representatives can manipulate them.
In case of B2B software of passive model is highly debatable, as business men and companies generally proceed through a through research and background check before buying their desired products. There are of course certain extra-ordinary situations, when scheduled to lack of time or resources B2B potential buyers can also be manipulated.
Consumer Decision Making and Passive View
In the passive view model the marketers generally use their marketing mix to effect the consumers perception, personality, learning, attitude and motivate the buyer to buy the product.
Innovation Approval Model and Innovation Decision Model are being effectively used to influence the consumer's mental health field and therefore instigate the consumer to buy a particular product.
Apple Inc for example, have been using the Passive view combined with Innovation Diffusion to sale their products. They came up with Ipad this year 2010 and with comprehensive and unique marketing combination were able to sell it well, now by 24th March 2011; people already are queuing for the Ipad 2. It is nothing but belief in the passive model that is travelling the sale of various electronic innovations nowadays.
There are various other companies that produce a powerful use of passive view. The most notable among they are the high street fashion design labels. These retailer present their seasonal fashion, they popularize it utilizing their extensive marketing campaign and sell them effectively at a profit. Louis Vuitton for example have been following a concept of vintage marketing and retailing their products to the customers at a price and particular trademark design.
Economic view believes in an environment of perfect competition, where consumers make rational decisions all the time. In the true sense of the world this model is improper as there can't ever be a situation of perfect competition. Besides it is also extremely hard for the consumer to make rational decisions all the time. Because for making logical decisions a consumer will have to be aware of all the merchandise on the market, all possible alternatives and their features. Having all this information generally is impossible in the current fast changing world.
Consumer Decision Making and Economic view
The consumer's monetary decisions are mainly influenced by their needs, attitude, personality, social environment, and marketer's efforts.
The economists believe the decline in cost of a product will raise the demand. It isn't always true. The consumers consider the price as something they have to give up for the merchandise. So the decision depends upon the necessity for the merchandise. Maslow's hierarchy of needs depict the security and subconscious needs as a couple of desires which makes buyers to focus more on food, shelter, family and safety rather than price.
The frame of mind and personality also enter into action during the decision making process. This has been clearly shown in Maslow's esteem needs. The economical view of a buyer with an frame of mind of self respect and esteem concentrate on their possessions. Along with the spotlight on the product and not the purchase price influences their decisions. For example, buying high grade range clothes offers the buyer's esteem and attention from others. Consumers with this attitude may fall under the category of materialistic people.
The financial view of any buyer is determined by their personality of seeking for the potential and value of the product. Buyers gratify their actualization needs by looking at price and quality of the product with the available alternatives. The internal traits packages the
The cross-cultural research reveals the fact that the advantages of products or services consumed change from one country to another. For instance, possessing premium cars in Africa portrays ones esteem in the modern culture.
The marketers still consider that the consumer's financial vision towards something has little true to life application. It really is unlikely that the buyer will be aware of the knowledge of all alternatives. The consumer with an financial view conducts an intensive decision making through looking at. So the marketers produce tactical pricing strategies illustrating offers and discounts to motivate the stimuli of the consumers effectively. However, in B2B market it is different. The business markets have well-organized resources to achieve the knowledge and the potential of the products and services.
Various marketers have been using the reduced pricing and the economical view to draw in their marketplace and so increase their sales. The Pound stores in the UK and Money Stores in the United States of America are the types of use of economic model. Various and repeated sales and low prices offers by the firms to increase their sales are also examples of economic view.
Primark would be an ideal example of a company that tries to make best of the monetary view model. The company sells its merchandize at prices, which can be lowest in the market. The quality of the merchandise though, is not as good as other in the same market.
Emotional view believes in targeting emotions and impulse of the consumers. This view believes that there are certain feelings or feelings like delight, love fear fantasy etc mounted on every purchase of the consumers
A consumers is less inclined to do pre-purchase analysis and search before psychological purchase.
Consumer Decision Making and Emotional View
An mental view model handles the personality and frame of mind of the consumer. The emotions of any consumer attached to a specific product motivate the consumer to make a particular decision. Over the years the marketers have used thoughts in the their adverts and advertising campaign to influence the personality and the attitude of the consumer.
Over the years football clubs have sold their merchandize based on the emotional view. The various vacation packages use thoughts to attract the customers. My real-estate retailer promote their homes and other properties with a tag lines "Your Home" etc just to attract the mental aspect with their product. The Body Shop has been using the mental model appeal to its consumers. The company portrayed itself as more humanitarian than the others in the same industry, by campaigning against animal assessment.
Marketers have also been doing many other things with the physical evidence of their stores to appeal to the psychological feel. In Tesco, there's a scent of fresh loaf of bread in the bakery section. The All Saints have designed their stores with a display of old sewing machines and other cloths developing goods of the old times.
Hierarchy of Needs
The mental view is approximately fulfilling the self-actualization need of the customer. It really is more about doing things or buying what to feel good. But it can be argued that psychological views are also about fulfilling public and esteem needs to a certain scope.
Relevance of these views
There have been various criticisms of the monetary and the passive view models. These models are really opposite of each other. The monetary model believes in the presence of perfect competition and the notion that each consumer is completely alert to all the merchandise and their features in the markets. Whereas the passive view model believes a consumer is fully submissive to the manipulations of the marketers and hasn't dominance of his own. In true sense of the world both these believes are baseless and surreal. But their existence on earth is possible in certain scenarios.
The relevance of the cognitive and emotional models is justifiable. As consumers do makes pre-purchase analysis as well as make decisions based on impulse and feelings. Hence the marketing expert should use the combination of both cognitive and psychological views to market their products.
Freudian theory believes that an individual's personality is formed as they passes through various periods of infant and adulthood. It believes that consumers are initially unacquainted with the true known reasons for buying what they buy.
Freud proposed an individual's personality contains three interacting systems: Identification, superego and ego. Ids are the primitive or the impulsive drives and include physiological needs. Superego is the individual's inside manifestation of society's moral and honest code of conduct. Ego is the individual's self-conscience.
These factors affect an individual's personality and hence influence his / her purchase decision-making.
Neo Freudian theory believes public relationships are key to formation and development of personality.
This theory has divided the individual's personality into three categories, i. e. , compliant, intense and detached.
The people with this kind of personality have different purchasing practices and habit.
Trait is any particular and relatively long lasting way in which an individual differs from other individuals. This theory assume that a person's specific characteristics affect his decision making process. For example, a confident person is more likely to buy a recently introduced product when compared to a conservative product
Marketers have used various creative adverts to get these personality adverts. Nissan's tag series "Enjoy the ride" is targeted toward safety mindful individuals. Nike's "Just do it" is targeted toward impulsive personality, whereas Mountain Dew's "Do the Dew" advertising campaign is targeted toward the adventurous people.
There are various factors that have an effect on a consumer, while making a purchase decision. These decisions can be rational or irrational, market driven or emotion driven. But all these decisions are effect by the consumer's motivation, belief, learning, frame of mind and personality. Therefore is influenced by the research and analysis of the consumer. And all these factor's are further inspired by the marketing communication of the company.
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