Consumer Behaviour and Insight

This document provides an analysis of the consumer decision-making journey and its importance for marketers. It also explores the differences in the decision-making process in B2C and B2B business contexts. The report is based on The Furniture Practice Ltd., a furniture company in London, UK.

Consumer Behaviour and
Insight
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Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Analysis and explanation of consumer decision-making journey..........................................3
P2 Importance of mapping a path and understanding consumer decision-making for marketers.
.....................................................................................................................................................6
TASK 2............................................................................................................................................7
P3 Differences in process of decision-making under B2C and B2B business context...............7
P4 Different approaches of market research under B2C and B2B business context...................9
TASK 3..........................................................................................................................................10
P5 Process of influencing different stages of consumer decision-making in B2B and B2C by
marketers....................................................................................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
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INTRODUCTION
Consumer behaviour can be termed as the conduct of an individual in the due process of
purchasing, consuming and disposing a product or an service (Solomon and et. al., 2017). The
Furniture Practice Ltd. was established in the year 1997 and is one of the largest independent
furniture company in London, United Kingdom (Company profile, 2019). In the following report
based on The Furniture Practice Ltd., an attempt has been made to analyse the consumer
decision-making journey and its importance for marketers. The report also evaluated the
decision-making process in different business models and the different tools used for market
research. The last section of the report deals with evaluation of the tools and techniques used by
marketers to influence the various stages of consumer decision-making process.
TASK 1
P1 Analysis and explanation of consumer decision-making journey.
Consumer decision-making can be termed as the process which helps a consumer to
evaluate the different product and service alternatives and select a product or service which he
thinks has the ability to satisfy his needs or requirements (Stankevich, 2017). Increasing
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production and consumption activities globally have increased the number of alternative and
choices which are available for consumer in today’s era and this underpins the importance of
examining consumer decision-making journey. Process of consumer decision-making for the
management of The Furniture Practice Ltd. is being examined as follows:
Need recognition: First step in the process of consumer decision-making initiates with
identification of a need or requirement or a problem and attempts are made by an individual to
satisfy and fulfil those needs. Primarily, two major factors collectively function to trigger the
need or requirement in an individual which are external and internal stimulation. Internal
stimulation or need identification relates with physical requirements such as food for satisfaction
of hunger (Maity and Dass, 2014). On the contrary, external stimulus in an outcome of marketing
and promotional strategy implemented by a business organisation to promote its products and
services and increase revenue. For example, an individual shifting to a new accommodation
might look for furniture or the marketing strategy adopted by The Furniture Practice to promote
its newly launched product may influence an individual to buy that product.
Information search: As soon as the need or requirement has been identified by an
individual, the second stage or phase of information research begins where the individual makes
effort to collect as much information as he can about different products in the similar category
which are being offered by different business organisations. It is a very important step which
enables an individual to make a well-informed purchase decision. Internet and expansion of
digital technology has provided many tools such as company website, different merchants, e-
commerce applications, friends and family, newspaper and print media etcetera for consumer to
collect information. For example, by accessing the website of The Furniture Practice, an
individual can obtain important information about the different products, their quality, price
segments, additional offers, customer reviews etcetera which can assist the process of purchase
decision-making.
Evaluation of alternatives: Information which has been collected by the consumer during
the previous stage is evaluated by the consumer at this stage to make a purchase decision. A
consumer conducts a critical evaluation of the different products from different brands, compares
and contrasts the prices, compares the quality of product and additional benefits etcetera to
evaluate all the available alternatives and choices (Pachauri, 2001). Enthusiasm of the customer
influences the extent of evaluation where a consumer might decide to undertake critical
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evaluation of every possible alternative to purchase a product with best potential of satisfaction
of his requirements. For example, an individual looking to buy home furniture can evaluate the
different products and compare the prices of The Furniture Practice with other competitors for an
effective evaluation of alternatives.
Purchase decision: After foundation and establishment of a belief in the product’s ability
to satisfy the wants and requirements, an individual makes the purchase decision where
important aspects such as platform for purchase, price at which he is going to buy the product,
the brand, the vendor etcetera are decided. For example, after extensive evaluation, an individual
might decide to purchase furniture from the website of The Furniture Practice due to better offers
and discounts on online platform as the company’s promotional tool.
Post-purchase behaviour: Once the product has been purchased and used for some time
by the consumer, comparison between expectations formed on the basis of market research and
the actual experience is conducted which can have two different outcomes. If the product
satisfies the requirements and meets the expectations, a consumer can demonstrate loyalty to
brand and might engage in future purchase behaviour and give a positive feedback. On the
contrary, dissatisfaction of customer can result into loss of brand trust and a negative feedback
hampering the potential of long-term relationship management for the company. For example, a
client with high level of satisfaction with the quality of product and service provided by The
Furniture Practice might leave a positive feedback on company’s website and increase public
goodwill and goodwill by word of mouth.
Different views of consumer behaviour can be interpreted by the markets of The Furniture
Practice Ltd to comprehend the purchase decision-making process and the rationale behind
consumer decision-making. A brief summarisation of different views of consumer behaviour is
as follows:
Economic View: In a perfect competition environment, consumer is often portrayed as
economic and an individual who makes rational decision based on his personal evaluation of all
the alternatives. However, this view lacks application in real world where lack of information to
make the best decision is evident. Due to limitation in understanding and the information
accessible to consumers, it is often observed that a consumer settles on products instead of
maximising value for money.
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Passive View: As per this model, decision of an individual to purchase any product or
service is inspired by the promotional and marketing efforts by the organisation and the chances
of a consumer buying a product or service is largely determined by how well the product is
positioned in the minds of the customer (De Mooij, 2019). Passive view of consumer behaviour
suggests that consumer lacks the ability to make a rationale decision based on his personal
evaluation of different alternative product and services.
Cognitive View: This model regards the consumer as a creative-thinker and problem-solver
who makes attempt to mitigate the risk associated with purchase of different products and
services by critical thinking and collecting information.
Emotional View: As per this view, purchase decisions of a consumer are largely influenced
by the positive or negative emotions attached with a particular product or brand. Hence, the
importance of emotional marketing increases and the positive stimulation of emotions attached
with a product is attempted by the marketers (Golinelli and Parigi, 2004).
P2 Importance of mapping a path and understanding consumer decision-making for marketers.
The importance of mapping and understanding the path of consumer decision-making
journey for the marketers of The Furniture Practice Ltd. can’t be overstated and can be explained
with the help of following points:
Marketing alignment: Understanding and comprehending the process of consumer
decision-making plays an important role in integration of the company’s marketing strategy and
efforts with the factors which determine the selection and choice of a product or service made by
an individual (East and et. al., 2016). With the help of road mapping the journey of a consumer
decision-making process, the marketers of The Furniture Practice can identify the stages and
steps where external stimulation can influence the final purchase decision of the consumer and as
a result, effectiveness of marketing strategy can be enhanced.
Product designing: Process of comprehending consumer decision-making journey involves
market research which helps in determination of the features and the specifications which are
expected by a consumer in a product or service for satisfaction of his wants or requirements.
Hence, understanding consumer decision-making process will help the marketers of The
Furniture Practice to obtain and provide important information to the production department of
the company to design products with specifications as per the needs and customer’s
requirements.
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Pricing strategy: Analysis of the behaviour of consumer helps in determination of market
price trend and the anticipated demand at a certain level of price. It helps to identify the price a
consumer is willing to pay for a particular product or service that he expects to satisfy his wants
and requirements. It improves pricing strategy and helps in determination of a price level where
the business objectives can be met along with maximisation of revenue (Ahmetoglu, Furnham
and Fagan, 2014). Pricing strategy is central to the market favourability and profitable business
operations of The Furniture Practice Ltd. which can be improved by understanding the consumer
behaviour and decision-making process.
Customer differentiation: Distinguishment of consumers with similar behaviour and
requirements from the other customers can be done easily with the help of analysing consumer
decision-making process. It helps in formation of a target market which can be used for
launching similar promotional strategies to foster increased sales. It helps in tailoring the
strategies and products offered by the organsiation as per the dynamic demands and behaviours
of different group of target customers (Hjort and et. al., 2013). With the help of effective
customer differentiation, the management of The Furniture Practice Ltd. can serve a wider group
of customers and the width of product and services can be expanded to meet varying customer
needs.
Eliminating competition: Extent of competition in every industry has increased the
importance of mapping the consumer purchase journey that can provide valuable information
about the behaviour of customer and the reason why a customer may prefer to choose a
competitor’s brand over the firm’s product and services. Identification of gaps as compared to
the products offered by competitor that influences a consumer to purchase other products in
market can be done more effectively (Kontsas and Lazarides, 2012). With the help of developing
an understanding of the consumer behaviour, the management of The Furniture Practice Ltd. can
face competition in a more effective manner and sources of competitive advantage for the
organisation can be determined.
Delivering on promises: In an attempt to increase sales and promote products and services,
every organsiation makes promises through product marketing and information manuals which
form the basis of customer expectations. Extent of customer satisfaction level is influenced by
the level at which demands and expectations of customers are being met. The management of
The Furniture Practice Ltd. can gather information about customer satisfaction levels through
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customer journey mapping and feedback mechanism and gap analysis can be conducted to
ensure delivering on promises as a benchmark for future endeavours.
Increased sales: Every benefit on mapping the consumer purchase decision-making journey
has a direct impact on the organisation’s sales and revenue and with the help of understanding
the process and analysing consumer behaviour, the marketers of The Furniture Practice can
increase sales and provide a platform for accomplishment of organisational objectives. For
example, with the help of improving marketing strategy and target customer promotions, the
sales of the organsiation can be increased to a significant extent.
TASK 2
P3 Differences in process of decision-making under B2C and B2B business context.
B2B can be termed as a type of transaction which is conducted between businesses such as
wholesaler and retailer whereas B2C is a type of transaction which is conducted between a
business organisation and a consumer. Comparison of the differences in the process of decision-
making in B2B and B2C business models is being done in the following manner:
Time and people involved: One of the primary difference in the process of purchase
decision-making in B2B and B2C business context is the amount of time and the number of
people involved in the process of decision-making. In B2C business models, an individual is able
to take a decision regarding purchase of any product or service in a very short period of time
with minimum people involved in the process. For example, an end user looking for furniture
can make the evaluation of different products offered by The Furniture Practice and select the
product according to his requirements in a very short period of time. On the other hand, many
people are involved in the process of decision-making in B2B business models which increased
the amount of time required to make the decision substantially (Chlupsa, 2014). For example, the
management of The Furniture Practice Ltd. might consider suggestions of different members and
stakeholders of the organisation before making any procurement reforms or purchase decisions.
Emotion of buyer: Buyer emotions influence the process of decision-making in the case of
B2C business models where an individual customer may decide to purchase a particular product
or avail any service due its emotional offering. For example, a particular brand such as The
Furniture Practice might have positive emotional value for a customer due to its association with
happy memories of the consumer which is enough reason for the individual to buy its products.
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Comparatively, buyer emotions have no significant value or influence in the process of decision-
making in B2B business models and the entire decision is evaluated based on the rationale and
cost-benefit analysis conducted by the business consumer (Pandey and Mookerjee, 2018).
Size of purchases: Purchases in the context of B2B business models are usually large in
size and a huge amount of investment is involved in every decision which makes it imperative
for the management of The Furniture Practice Ltd. to evaluate any purchase decision of the
company with respect to its long-term benefits and cost-benefit analysis. Attention to detail is
essential in case of large purchases involved capital expenditure for business organisations. In
B2C business models, size of purchases are relatively very smaller which determines the
enthusiasm and the passion of the consumer to engage into extensive evaluation.
Duration of relationship: When a purchase transaction takes place between two business
organisations, emphasis is laid on management of a long-term relationship which influences the
process of decision-making and instant incentives have very little impact on the decisions. For
example, the management of The Furniture Practice Ltd. attempts to develop long-term positive
relationship with the suppliers to ensure sustainable business performance in future and
fulfilment of requirements. Comparatively, purchase transactions involving a business
organisation and end consumer has no aim of development of a long-term relationship and
hence, incentives such as instant discounts, cash-backs etc. There are adequate to influence the
decision-making process of consumers (Kolis and Jirinova, 2013). For example, a consumer of
The Furniture Practice Ltd. may switch to rival or competitor of the firm due to better offers and
discount being offered by the competitor.
Similarities between B2B and B2C
There is need of proper excellent experience and customer services.
There is need of credibility and engagement requisites for enhancing the services and p-product
exchange in case of both B2B and B2C services.
There is presence of contemporary buyers both in case of B2B and B2C markets that is helping
in enhancement of knowledge as compared to other customer generations.
There is always presence of multi channel matters both in B2B and B2C business. Buyers are
willing to spend on similar channels,. The instances are different but both parties are belonging
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to same location.
Both B2B and B2C business are focussed on building of meaningful and excellent customer
experiences at different stages of sales cycle. It helps in building of a emotional connection
related to products and product functionalities that can help in enhancing relevance of brand for
core audiences and enabling higher customer engagement.
B2B and B2C business both require a situation of robust alignment with marketing strategies. If
the marketing communications are weak then it may lead to loosing of potential customers.
There is need of effective sales process that stars from generation of enhancement and higher
nurturing in case of both types of sales that is B2B and B2C. For this there is need of a well
defined strategy and approach for reflecting both show grounds.
In case of furniture pvt. Ltd there is use of approaches that can help in maintaining long
term relationships so that there can be proper functioning of all aspects of increasing sales.
P4 Different approaches of market research under B2C and B2B business context.
Market research is an important element for understanding and analysing the behaviour of
consumers in both B2B and B2C business models. Similar methods of research are used in both
the business model where the sample size and other features of the research may vary. The
different approaches or methods of market research used by the management of The Furniture
Practice Ltd. are being evaluated as follows:
Personal Interviews: Personal interview is an approach of conducting qualitative research
where an individual customer is provided with a certain set of questions with an objective of
determining and analyse the behaviour of consumers. It is a very critical tool which is used in
both B2B and B2C business models. The management of The Furniture Practice conducts
personal interview with business clients of the company as well as individual customers for
increasing the effectiveness of product placement and marketing strategies. With the help of
personal interview, an in-depth analysis and critical-thinking for solving a problem is possible
and quality of data and results can be ensured. However, personal interview is a very lengthy and
time-consuming process and it can only be conducted if the organisation has access to a large
pool of financial and other resources (Moisander, Valtonen and Hirsto, 2009). Effectiveness of
personal interview as a method of conducting qualitative research is determined by the attention
of the individual interviewee.
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Surveys: In a survey for quantitative market research, a questionnaire is prepared to analyse
the responses of a sample group which can represent the target market for an organisation. Rapid
innovations and development in technology have extended the scope of surveys beyond market
and field surveys to surveys being conducted digitally using mails, telephones, social media
networking websites, company website etcetera. Application of survey method for conducting
market research is similar in both B2B and B2C business models but due to large purchases and
limited number of buyers in B2B business models, sample size is usually smaller (Brace, 2018).
For example, online survey is conducted by the marketers of The Furniture Practice Ltd. using e-
mail to obtain information about the market and consumer behaviour. Surveys are time and cost-
effective method of conducting market research with a large scope but the quality of survey
depends on the quality of sample size and its similarity with the target market of the
organisation.
Field trials: Field trial as a method of market research is usually concerned with placement
of a new product or service into a very short-market with limited stores to obtain consumer
feedback and response in real-market conditions which can help in taking important decisions
related to product innovation and modification, pricing strategy reforms or attractive packaging.
Testing of a product is a very common method of market research in case of B2C business
models as it comparatively easier to get different individuals to try and give feedback on newly
launched products by the company (Georges and et. al., 2015). The management of The
Furniture Practice Ltd. uses field trial method to obtain relevant information about the new
products launched by the company and make necessary adjustments to achieve sales and revenue
targets. It is a method of obtaining qualitative research information.
TASK 3
P5 Process of influencing different stages of consumer decision-making in B2B and B2C by
marketers.
Expansion of digital technology has enabled the marketers of The Furniture Practice to
influence the different stages of consumer decision-making process in the following manner:
Phase 1 (Need recognition): At this stage, an individual identified a need or a problem
which he wishes to satisfy by making a purchase or availing any service. Promotions and
marketing strategy of an organsiation by the marketers has a very crucial role to influence the
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consumer decision-making process at this stage by stimulating a desire to purchase a product
(Maity, Hsu and Pelton, 2012). For example, promoting the new office furniture equipment and
actively displaying its posters on various business magazines by the marketers of The Furniture
Practice has the aim of stimulating a need in the individuals interacting with those channels of
communication.
Phase 2 (Information search): During this phase, attempts are made by the consumer to
collect as much information as he can for better evaluation of the alternatives. Making the
information about the various products and services offered by the organisation more accessible
to the potential customers is the job of marketers at this phase (Shareef and et. al., 2019). For
example, the marketers of The Furniture Practice Ltd. have uploaded the complete brochure of
products and services offered by the company on the website and similar information is also
being furnished to the consumers using other platforms such as Instagram and Facebook to make
the phase of collecting information more easy for consumers and influence the process.
Phase 3 (Evaluation of alternatives): Evaluation of alternatives where the consumer
compares the product and services offered by different brands and companies in the market is
also being influenced by the marketers of business organisations using comparative marketing
campaigns where information such as how the product increases the value of money for
customers, better features than other products, better quality etcetera is being provided to
facilitate the process of comparison by the consumer (Kumar and Raju, 2013). Moreover, an
effective marketing campaign in today’s competitive environment is aimed to differentiating the
products and services offered by an organisation from competitor’s product to facilitate
evaluation.
Phase 4 (Purchase decision): Marketers in both B2C and B2B business model influence the
most crucial stage of consumer decision-making process which involves actual purchase decision
by the consumer by using tools of sales promotion such as offers, discounts, cash discounts,
customer loyalty programs, cashbacks, free gifts, vouchers etcetera. In the context of The
Furniture Practice Ltd., transactions with individual customer has a major influence of tools of
sales promotion used by the marketers such as referral bonus or first-time discount to inspire
consumer decision in favour of the organisation.
Phase 5 (Post-purchase): Customer feedback mechanism and grievance handling is a tool
used by marketers in both B2C and B2B business models to influence the post-purchase
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behaviour of consumers. With the help of strategically responding to the complaints and
feedbacks of customer, marketers of The Furniture Practice Ltd. makes attempt to influence
future purchase behaviour of consumers and focus on long-term relationship management with
the customers (Ashley and Tuten, 2015). For example, company runs a free refund policy for a
few days after the purchase has been made to turn dissatisfied customers into loyal customers of
the brand.
CONCLUSION
It can be summarised on the basis of above discussion that consumer decision-making is a
series of steps which helps an individual to select a product or service out of the alternatives.
Importance of understanding and mapping the path of a consumer decision-making process can’t
be overstated for marketers as it helps in increasing sales, improving effectiveness of marketing
strategy and better product innovation. It can be compared that decision-making process in B2B
and B2C has differences such as number of people and amount of time involved, focus on
relationship and role of emotions. Different types of research approaches and methods are used
in both the business contexts. At last, it can be summarised that marketers influence the stages of
decision-making process of consumers by using different tools and techniques to make products
of the company more favourable in the market.
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Company profile. 2019. [Online]. Available thru<https://www.b.co.uk/company-profile/?
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