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Theories of Consumer Decision Making

Keywords: consumer behaviour theory marketing, consumer decision

The idea of consumer buying behavior is not new, it has been discovered ages before. The current marketing strategies focuses on consumers buying behaviour. The marketing aim is to expand and make best use of their market share. Consumer's decision making process is highly sensitive and is dependant on their learning and experience. The paper points out about the consumer's subconscious factor particularly learning and its own influence on buying design. Learning has been discussed with the aid of theories, using dark-colored field and stimuli response theory. The black box clarifies the consumer's decision making process and factors that affect buying decision. Furthermore this model also illustrates the marketplace stimuli, market environment, potential buyers' stimuli and the potential buyers' response. These internal and external factors aim to effect the purchasing style of every solo consumer.

Buyers are highly sensitive while making decisions and marketing stimuli provide necessary information and understanding of the product or service. Consumers are also inspired by sociable and internal elements like population, family, personal, motivation and learning. In useful consumer use personal thinking or experience to response recurring buying. The self learning really helps to decrease the buying options and narrow down the substitutes available for sale. Today modern companies have implemented the custom-made marketing techniques to understand the thinking and decision making requirements. The cognitive learning helps the customer to remember the prior purchase each and every time when similar arise buyer will use own experience to make decision. Satisfied consumer will not go for information search which employs problem recognition as well as others steps in decision making. Marketers can effect post purchase decision by positive learning.

Provided examples show the importance of shopping for behaviour and lot of money 500 companies have used these elements to increase their retention rate. E. g; Dettol marketing clarifies the buyer's response and trust which they are suffering from by using subconscious marketing and positive cognitive learning.

To enhance the learning process Professional used education and awareness program to build up the learning of each single consumer. E. g. Toyota Lexus on other hand also target experience as their marketing strategy. By understanding the need and market trust they released Lexus (High grade product) which leads the market from years. Marketing techniques plus extra value added service enable them to enhance the client experience. Toyota consumers were happy and content with original strap. By constructive experience Toyota succeeded to develop new market for luxury cars. While discovering consumer learning it was seen that customer retention has a direct relation with positive learning. It is also recommended that marketers must use buyer behaviour and need as the primary research of market review.

Financial products and services require more understanding of consumers. In addition, it must develop conceptual construction as well as service marketing to cope with individual consumer. As explained it's become more challenging for the marketers to understand, satisfy and impact the consumer to use financial services. By concentrating customer experience, strong understanding, service quality and trust marketers can effect the decision making and company choice. Parasuraman's, A. , Zeithaml, V. A. and Berry, L. L. (1985) says that it's very difficult for a consumer to choose financial loans and supplier as a result of intangibility of product, and supplier reputation. Together with Ansoff's model and focus existing product and existing market marketers can increase buyer behaviour through focus on marketing.

Outcome shows that companies must stress on the elements that impinge on the buyer's behavior as well as decision making. Learning can be deployed to judge individual response which includes been demonstrated by instances in the books. Significantly, the outcome suggests that learning can be use as communication and conversation tactic to see specific response especially financial loans.

Table of contents

1. 0 Introduction

Business success can be obtained through the appropriate study of consumer patterns. Consumer buying action is a multi step process, which involves buying, paying, using and reconsidering the same product once more. To understand the buying structure or activities is very essential as it immediately influence the business enterprise success. As stated by Caslione, John A, (2009) the marketing strategies must meet consumer tastes in recession time in order to get competitive edge. Mostly buying activities displays the strategy use by the companies for marketing and satisfying the marketplace needs. So consumers are considers to be the admittance and exit to an effective business. To comprehend the consumer's decision so that it is is important to understand the cognitive factors impacting their needs, choice, choice and last and post purchase experience or learning (5 W's of marketing).

Research done on buyer habit helps to understand the deciding process in two ways i. e. collectively and separately. Both individual and collective buying process is damaged by other factors like demographics, environment and understanding. (Foxall, Gordon R, 1987) stated through the behavioral research companies can forecast the buying consistency and product choices.

Theory of Consumer behaviour and decision making

The decision making theory was evaluated and altered by Nicholas Bernoulli and Oskar Morgenstern but it originate about 300 years ago. The idea was predicated on the expectation of decision results which was a cognitive process. Later the theory was modified with the addition of value and satisfaction. In addition Allen Shocker points out the complexity and steps which entail in decision making. (Michael Richarme, 2005) Degree of participation is another important factor while looking and making decision. Analysts also turned out that the marketing activities have huge effect on consumer's mindset which helps to take decision.

Consumer behavior is a emotional function that involves the customer to endure the identification with their needs, searching methods to fulfill the needs and make purchase decisions consequently. The process can even be referred to as collecting, interpreting, making plans and performing it for effectively buying the desired product (Lars Perner, 2008). The behavioral procedure of the buyer is highly dominated by their mindset.

The first style of consumer decision of earning process originated in 1963 by Howard and later edited in 1969 which has become the current "theory of consumer behavior". The updated model has an integration among the number of psychological, communal, and market strain on the buyer's choice and information (Howard and Sheth, 1969).

Source: http://eprints. bournemouth. ac. uk/10107/1/Consumer_Behaviour_Theory_ _Strategies_%26_Models. pdf)

1. 2 Consumer Decision Making Process

Consumers cannot make their decision by itself, rather they have to interact and appearance up for the info from various sources like their own theory, reference organizations, environment, other potential buyers and vendors etc.

(Source: http://eprints. bournemouth. ac. uk/10107/1/Consumer_Behaviour_Theory_ _Approaches_%26_Models. pdf)

The consumer decision making process is relationship between the stimulus for the purchase, the characteristics or need of the consumer and their corresponding response. The stimuli can either be intra or inter personal from the consumer. This may further be described by the Dark colored Container MODEL which stresses on the bond between the response and the stimulus of the buyer. (Cindy Dietrich, 2010) The companies plan and process their marketing stimuli, whereas on the other side sociable factors like politics, economic and ethnical, impact environmentally friendly stimuli.

Fig# 5 the Dark colored Box Model

(Source:http://marketing5. net/Buying-behaviour-and-decision-making-criteria-of-Base-of-the download-w11405. pdf)

The field encloses the characteristics of buyer and their decision making process which helps the buyer to decide and response. Internal and external factors have been displayed in the model as buyer characteristics and environmental stimuli respectively. These factors together influence your choice process and buyer response as defined in the figure above.

From the identification of problem till the post evaluation of the decision each step is very crucial for the customer which directly influences the marketing strategies. Positive learning reduce the steps in decision making where consumer small down the decision, information search, different, here consumer behavior to buy the specific product. All these process relate with buyer subconscious factors, determination, learning, personality etc. on the basis of information gathered the buyer tries to select the best available option while making the purchase.

(A) How the selected factor influences the behavior theoretically?

Origination and affect of learning on buyers behaviour

The cognitive method is vast majority of mental psychology which founded by early Marketers again (360 B. C). The storage or learning theory was developed by Aristotle who associated learning and knowledge as a mental process. In 1950 Hubb developed a model called Stimlus- organism- response which was dominated by behaviorism strategy. (Trust J. Hartman, 2001)

Consumer decisions are affected by specific uniqueness like get older, life style, personal concept, personality, occupation and economical condition. The purchase decision also affected by specific learning and earlier experience. (Kotler, 2006) Learning identifies activities performed or information received. It comes from experience and interplay of wishes, stimuli, response and encouragement.

Once the buyer has learned from their experience they try to discriminate and discover the difference between similar buying stimuli and adjust their response to it subsequently. Learning ideas are also important to marketers to be able to produce the demand for something using the buyer's knowledge, motivating reasons for purchase and also support them up with positive support (Frans Giele, 2009).

Learning evolves on the time frame and helps the buyer to boost their knowledge. There's a continuous effect on the tendencies of the buyer and their purchasing activities in future. The information compiled using different learning operations help the consumers to make a guide and mental framework because of their purchasing pattern, tendencies and decision.

Learning is also tightly to notion as it assists to be the organic input for the buyer knowledge which they have gained from past buying occasions. (Mario Glowik, Slawomir Smyczek, 2011). Belief can better be discussed as an activity that your consumer uses to select, coordinate, receive and interpret their buying need and enrich their learning for a better purchase decision. (William j. Mcguire, 1976) said that conception is more important and has high impact than other stimulus. In this manner the buyer evaluates the many brands and products which come to their mind. Often the compared facet of the product relates mainly to the internal and efficient benefits proposed by the products or brands.

(Thomas M. Aslin, Michael L. Rothschild, 1987) Marketers must understand the value of learning/ experience as "first impression is the previous impression" and it is important for the business to wthhold the existing customer as it is always cheaper and consecutively make new faithful customers. Other market factor like service quality and seller's eminence are also a part of individuals cognitive process which immediately influences the buying pattern. (Kau, Daleen and Serene, 1995) New marketing strategies should concentrate to enrich customers experience by improving their learning/ experience and benchmarking those procedures to increase market segment and share.

Mental learning establishes that for how much time does indeed particular information keeps in human brain. This process will involve different activities that a consumer relates while purchasing the particular service or product and then these details becomes the data for future guide. Consumer retrieves the info from the memory if the same or similar product or service is observed.

Effective marketing strategies and tools help to create a sustained effect on the cognitive learning of the consumers. (Make D. Uncles, Grahame R. Dowling, Kathy Hammond and Angelo Manaresi, 1998) Marketers can use behavioral understanding how to improve the consumer's experience associated to their products as a sizable market segment wants to follow the current market tendency and feel satisfied with their decision.

Example 1: Dettol antiseptic has excellent ad which has made a long lasting effect on consumers head by utilizing their marketing slogan of "Be 100% sure". This advertisements has created an extended and positive image on consumers head since age range. Even following the kick off of other brands of antiseptic fluids like Savlon by J&J, consumers still look for Dettol as their first choice while making a purchase decision as Dettol has made a solid brand image.

Example 2: Allen bought Mercedes Benz S-class and advised his boss and the boss respected the comfort, security and vitality while driving, he will be pleased to listen to positive response and feel content with the buying decision and feel pleased to relate with the brand.

Service products require more concentrated and custom-made service and experience. As they have an impact on each customer in various manner and singularly. Consumer's degree of involvement influences their buying habit decisions which is often classified into three categories: Repetitive/routine buying, limited and considerable decision. Degree of satisfactions/learning is also important to choose the nature of buying behavior in future. Consumers keep their learning activities as a catalogue and categories them as positive or negative which they use for future research.

Example 3: A Toyota customer will stay faithful to the brand if he has a good experience with his previous purchase of its models and associated services. So when the business presents new car portion like 'Lexus' which belongs to niche market, the customer will not hesitate to buy the product since his experience is affirmative.

2. 0 B: Why is customer experience important to marketers in explaining buyer behavior?

Consumer behaviour and decision making process has been one of the favourite research theme for marketers since age range. Authors like Sheth (1974) suggested that consumer decision making is largely inspired by their family, awareness, knowledge and electricity of their frame of mind for the brands available for sale. Consumers use detailed information and their past experience to reduce brand ambiguity. Therefore managers must ensure that all purchase experience leads them to higher satisfaction and positive learning about their product and brand.

Allen m. Weiss, Nicholas h. Lurie, and Deborah j. Macinnis, (2008) stated in their paper that Marketers can play with the psychology of the buyer as consumers compare each product in their brain. Companies need to identify about the consumers, what they need and which products make them happy. Bundle of money 500 companies have chosen marketing activities like advertisement, pricing, packaging and labeling to draw in their customers. Modern marketing methods have shifted to CRM, service quality which brings about strong brand image and name. Service quality has emerged as an influencing attribute in consumers learning, as a goods service quality brings about positive learning and satisfying experience for the consumer.

Example 4: Dell is well-known for their products and after sales services. In case there is any complex assistance needed, the company transmits their team to solve the challenge at the customer's house. Therefore the customer is highly encouraged to trust and buy their product. Dell used customer experience and opinions to improve their product and service quality.

2. 1 Explanatory cases (Marketing and Managerial Implications)

2. 1. 1 Dettol (Reckitt Benckiser)

Strong marketing and brand image is behind the success of Dettol. Marketers have transported extensive research, advertising campaign and learning campaigns. The business has focused to educate and make each and every consumer aware of personal health and germ free environment. The marketing slogan of "Be 100%" sure has generated a positive image and brand in consumers brain. The cognitive learning has helped the company to effect the buying behavior and decision making of the consumers. Dettol has used several marketing strategies that have been designed to affect the learning of consumers to ensure that whenever they think of antiseptic liquid they need to think of the sole brand i. e. Dettol. By using learning and awareness programs, the business has successfully expanded their business and product categories from personal treatment to total good care. E. g. : They first launched their antiseptic liquid followed by toilet soap, hands wash, shower gels and bars, shaving lotions etc. Dettol has used marketing knowledge and communication to build up the need of the merchandise which was reinforced by various marketing and advertisement programs.

Sayantani Kar, (2009) brought up that Individuals are highly inspired with learning approach followed by Reckitt Benckiser hence they may be loyal to the brand. Dettol marketers have chosen psychographic and behavioral segment to target the decided on consumer and then permeate by the use of marketing channels. Competitive marketing and advert is the powerful USP (unique offering proposition) which helped those to develop and develop strong image which directly influenced the buyer behaviour. By using cognitive and behavioral learning factor company is quickly engaged in research and development to extend its product line. (Prerna Raturi, 2006) Several business competitors like P&G, Unilever have attempted to give attention to consumer learning and been successful to break the market somewhat but being truly a pioneer and strong brand, Dettol remains as their first inclination.

2. 1. 2 Lexus (Toyota Motor unit Corporation)

Being a car market leader the company has changed itself into quality conscious company. Toyota established fact for its sturdiness, performance, luxury and features. Consumers have discovered the superior quality and performance by experiencing Toyota automobiles. Company has a wide portion market which begins from middle income to high income categories. Toyota has transformed top quality market with brilliant marketing and using consumer experience. (Bill Vlasic, 2012) Through motivating experience they have entered in to niche market where traditional rivals like, BMW, Benz and Volvo dominate the marketplace. By understanding the necessity of the existing customers they required impressive steps and broke the marketplace share and effectively launched" LEXUS". Lexus is reduced car and also one of the largest selling brands on the globe. Carl Howe (2007) described that Lexus used immediate and focus on marketing where they targeted loyal customers who have been pleased with Toyota models, while they transported massive marketing programs to focus and inform the consumers that Lexus belongs to Toyota but it is a far more value added product. They used words like "same family" but different child strategy to create Lexus.

The new strategy was 'high value leading to high price' which affected buyers to experience the new product. Consumers have responded greatly to the new model which resulted in greater sale for the business, since the cognitive learning was affirmative which insisted those to try the new model 'Lexus' hence upgraded their behavioral learning. Alan Ohnsman and Makiko Kitamura (2011) stated that the after sales service was one of the key marketing features together with the product that allowed the marketers to develop lasting impact on consumer psychology plus they succeeded to affect buyer's behaviour.

(C) Best product category and its implications.

3. 0 Financial Services (Banking companies)

Financial services are the most discussed matter in today's current economic climate. By narrowing to financial products like, Personal bank and Investment bank especially, service marketing has created many models to understand and package with the problems. Consumer behavior is one of the primary issues which differentiate these two marketplaces (product, service). Services will vary from goods for their heterogeneity, inseparability, intangibility, perishability and customization which make it problematic for marketers to recognize and practice the service criteria. Major Finance institutions and financial institutions have realized the importance of consumer psychology toward financial loans which influence the final decision. (McKechnie, Sally, 1992) To make a purchase decision for a financial product the consumers are not completely aware of the energy and consequences, the learning is developed all together with the product use and Therefore it's highly crucial for the marketers to acquaint with personality, consumer thinking, marriage, service quality etc. which straight affect the customer preference.

The financial services aren't a one- time purchase but there are several two- way orders for long time. These services need the trust, assurance and common rapport of the buyer in the finance institutions. Lunt, Peter, (2005) points out that Marketers invests plenty of time to facilitates and establish a mutual romance to print positive image in the consumers cognitive learning that they consider to determine the creditability of the organization repeatedly. In addition, it benefits the organization in long-term business with individual consumer. Trials aren't available for these products and services, most of consumers use their experience to make decision every time. So customer experience, trust and brand image are the key wisdom individuals which influences the buyer to select from available financial facilitators.

4. 0 Conclusion

The object to study the consumer behaviour and decision making is to look at the role of determinates that effect the final decision of consumer. The justifications and description was predicated on available consumer decision making theories, buying behavior model and profound study of determined determinant learning. While exploring the determinants it was witnessed that marketing stimuli, an external and inner factor plays a critical role in consumer mindset which influence individual response. These elements influence the final purchase of each single product or service. Therefore it's highly critical for the marketers to identify and effort to filter down the difference between consumer and dealer interest. Analysis also reveals the major difference between product and service and also implies addressing them with an increase of concentrated marketing. As something based product buyers are more mindful about the price and end result of the specific product because of intangibility of the product it is difficult to talk to the buyer. Learning encourages the customer to understand and provide a clear responses of any particular product. If the consumer is happy with the product or service the feedback will be highly positive which also impact the customer to direct rebuy without considering other choices. In financial loans consumers are always scare with the outcome of your choice and highly rely upon their past learning.

Marketers have used this factor to comprehend the needs and want to maximize the satisfaction level, which is actually developing good attitude to rebuy the same product. Marketers may use modern solutions to reduce the degree of negative out come across spending more on growing consumer learning and experience. The right use of service quality, customer relation and satisfaction helps to create permanent business with every customer which also reduces the brand turning. It is also noticed that companies and marketers cannot exclusively depend on learning determinant. While looking into the determinants it sometimes appears that marketing stimuli also have an effect on the buyer behaviour. The choice of marketing combine product, place, price, campaign) significantly changes the flavor and choice of buyer. Marketers must design the strategies to reduce the flaws and ensure that the right message is conveyed to the consumers. The primary goal of marketing is to build up the need, catch the attention of, educate and affect consumers to buy the product. Therefore proper market analysis, product design, segmentation and targeting should be guaranteed by the internet marketer.

5. 0 Learning from the assignment

Consumers require in buying and decision making process every day. The training and decision making affects whenever one use the product or service. Being continuous process it's important for the customer and the professional to understand the procedure behind your choice process and what factors affect the buyer on each purchase.

Being a marketing pupil the assignment really helps to understand the available theories in details. Exploratory task "determinants of shopping for behaviour" really helps to comprehend the useful implication of every determinant like Marketing stimuli, exterior and inner factors. Through the use of exploratory research on chosen factor it was witnessed that it is very critical for the business and the professional to understand the buyer need, preference, satisfaction and commitment. Companies cannot rely on each determinant which influences buyer decision because consumer makes changing their buying decisions. Strong marketing is also one of the key successes for every company that involves more concentrated, targeted and progressive communicative tools to address the necessity of the buyer with offered solution.

Assignment also helps to investigate the sensible illustration from the globally renowned companies. While checking out their marketing strategies especially which helps to study from their practices. Critical analysis help to understand the professionals and cons of every option which the marketers use address the condition. The assignment also encourages home learning, theories and their implications.

Being a future director it is quite beneficial to discuss and addresses the condition in details. The positive outcome is to handle the problems with solutions which help to groom the thinking and brainstorming process being truly a decision machine and director.

Strong marketing is the key of today's competitive business, it was an chance to learn and measure the possible alternatives while understanding consumer decision making process which will help to consider positive decisions in future time.

6. 0 Appendix

Fig#1

"Theory of customer buying behavior"

(Source : http://eprints. bournemouth. ac. uk/10107/1/Consumer_Behaviour_Theory_ _Techniques_%26_Models. pdf)

Fig #2 Decision making through information search

(Source: http://www. consumerpsychologist. com/cb_Decision_Making. html)

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