Consumer Decision-Making Processes: A Marketing Report

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CONSUMER BEHAVIOUR AND INSIGHTS

Table of Contents
ASSIGNMENT 1.............................................................................................................................. 3
1.1 AN INTRODUCTION TO THE REPORT....................................................................................3
1.2 EXPLAIN THE CONSUMER DECISION-MAKING.....................................................................3
1.3 MODEL OF CONSUMER DECISION-MAKING.........................................................................4
1.4 MAPPING OUT THE DECISION-MAKING PROCESS FOR A PARTICULAR PRODUCT OR
SERVICE OF YOUR CHOICE......................................................................................................... 5
1.5 IMPORTANCE OF MAPPING A PATH TO PURCHASE AND UNDERSTAND CONSUMER
DECISION-MAKING.....................................................................................................................6
1.6 LEVELS OF CONSUMER DECISION-MAKING.........................................................................7
1.7 FACTORS THAT INFLUENCE DECISION-MAKING...................................................................8
1.8 CONCLUDING STATEMENT...................................................................................................9
ASSIGNMENT 2............................................................................................................................ 10
2.1 AN INTRODUCTION TO THE REPORT..................................................................................10
2.2 COMPARE AND CONTRAST THE KEY DIFFERENCES BETWEEN B2C AND B2B DECISION-
MAKING PROCESSES................................................................................................................ 10
2.3 EVALUATE HOW MARKET RESEARCH DIFFERS BETWEEN B2B AND B2C............................11
2.4 EVALUATE BEHAVIOURAL AND COGNITIVE APPROACHES TO CONSUMER LEARNING......12
2.5 IDENTIFY HOW CULTURE AND OTHER RELEVANT FACTORS IMPACT ON CONSUMER
BEHAVIOUR..............................................................................................................................13
2.6 ILLUSTRATE HOW ORGANISATIONS USE AN UNDERSTANDING OF BUYER BEHAVIOUR TO
INFLUENCE THE DECISION-MAKING PROCESS WITHIN BOTH A B2C AND B2B CONTEXT........14
2.8 EVALUATE THE USE OF DIGITAL AUDIENCE RESEARCH DEVELOPMENTS TO UNDERSTAND
AND INFLUENCE CONSUMER BEHAVIOUR...............................................................................14
2.7 CONCLUDING STATEMENT.................................................................................................15
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REFERENCES.................................................................................................................................16
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ASSIGNMENT 1
1.1 AN INTRODUCTION TO THE REPORT
Voucher Codes is an online discount company which aims to make the general products more
affordable to the consumers. The company works with over 500 retailers in the UK and
maintains a positive relationship with the biggest brands which helps in securing exclusive
offers which are only available at VoucherCodes.com. The customers can purchase clothes,
electronic items, Furniture, Food items, health and beauty and gifts at this online marketplace.
This report will focus on understanding the consumer decision-making process when they
purchase a certain product online.
1.2 EXPLAIN THE CONSUMER DECISION-MAKING
Consumer decision making is a process through which the customer evaluates different
alternatives available and finally make the decision to purchase the desired article. The
decisions of the consumers get affected by a number of factors which may be psychological,
economic or social (Javornik, 2016). By understanding the process of decision making, Voucher
codes can design its services better so that the maximum number of customer can be attracted
towards the business.
The consumer decision-making process follows certain steps, analysing these steps may help in
positioning the products of Voucher Codes Company better. The first stage is of problem
recognition in which the customer feels a need which is to be satisfied. In the next stage, he
searches for different options available in the market (Schütte and Ciarlante, 2016). The
Internet has come up as a strong means of searching for the consumer where he compares the
products and services of different companies. After gathering a set of alternatives he evaluates
all these alternatives. the final stage is of selection in which consumer makes the final decision
to buy the product. the performance of the product will decide his post-purchase behaviour.
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1.3 MODEL OF CONSUMER DECISION-MAKING
Figure 1: Consumer decision-making model
[Source: Darley, 2010]
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The figure shown above shows a simple model of consumer decision making. The whole model
is divided into three parts; the part of the model is ‘Input’ in which the elements of marketing
mix such as product, place, price and promotion are considered (Jacob, et al. 2011). The
product quality and its features, pricing of the product, place of the physical store and the
marketing techniques used are an important factor in the decision-making process. In addition,
the sociocultural influences such as views of the family members, friends and society are also
an important factor to consider. The communication sources used such as TV, newspaper or
social media platforms are also capable of influence the consumer choice.
The second part of this model is named as ‘Process’. In this stage, the consumer recognises his
actual need and tries to gain maximum possible information regarding the product. The
personal beliefs, traits and lifestyle are the factors which make an impact on the thought
process of the customer. The final portion of the model represents the ‘Output’ in which the
customer makes the purchase (Lee, et al. 2010). The performance of the products after
purchasing decides the post-purchase decision of the customer. Better quality products and
effective after-sales service build the trust of the customers and the company can achieve
repeated sales.
1.4 MAPPING OUT THE DECISION-MAKING PROCESS FOR A PARTICULAR
PRODUCT OR SERVICE OF YOUR CHOICE
Voucher code sells a variety of articles through its website and the electronic items comprise a
major portion of its sales. Below given are the steps which in the decision making process when
a customer plans to order a laptop through Voucher code company:
Problem recognition
This is the first step in the decision-making process where the need to buy a particular product
is recognised. An undergraduate student who is given a task to write assignments to complete
his degree may in an immediate need to buy a laptop. A laptop will give him the flexibility to
work at the home as well as in the college (Ballantine, et al. 2010).
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Information search
Now he starts gathering information regarding the available brands in the market, features and
the price range. He may use the internet to get appropriate information about the available
products or he may consult with his friends or family members to explore all the possible
alternatives (De Mooij, 2010). Social media platforms are also used to gather reviews of the real
users of the products and the positive and negative reviews of these users make a strong
impact on the decision making of the consumer.
Evaluation of alternatives
After exploring all the possible alternatives of laptop companies, the customer calculates the
features of the available products against his expectations related to functionality, price,
guarantee, performance and appearance.
Product Choice
After evaluating all the alternatives for the laptop, the consumer finally takes the decision to
buy the products which match his requirements (Massara, et al. 2010).
Post-purchase behaviour
If the customer is happy with the performance of the laptop he will recommend the product to
his friends and family members, he may also post some positive reviews about the product. On
the other hand, if the customer is not satisfied with the performance of his new laptop, he can
show negative post-purchase behaviour (De Mooij, 2010). A negative review on the online
platforms can cause much harm to the reputation of the company.
1.5 IMPORTANCE OF MAPPING A PATH TO PURCHASE AND UNDERSTAND
CONSUMER DECISION-MAKING
Mapping the consumer decision-making process is an important step to understand the factors
which affect consumer choices. Out of different steps explained in the consumer decision-
making process, Voucher Code need to identify the step which is most important according to
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its target consumers. When the customer research for a particular product or services they
essentially visit the website of the company (Pham, 2013). Therefore it is important that the
website of the company contains all the necessary information related to the products. This
information needs to update regularly along with the discount and offers so that successful
conversion can be made and the visitors on the website can be encouraged to buy the product
online.
Marketers making efforts to lure the customer at the starting stage and hoping that it will
follow the other steps automatically may not give positive results (Kannan, et al. 2015). The
whole process needs to be optimised at each and every step so that customer can be attracted
at every stage. During the information searching stage, the customers can be attracted by
posting videos, blogs, guides, checklists and other interactive content on the internet so that
customers can become aware of the product offering by the Voucher code.
1.6 LEVELS OF CONSUMER DECISION-MAKING
The time taken to make a purchasing decision and the level of involvement shown by the
customers depend on the products or services they are purchasing for daily need articles such
as toothpaste and sop, the consumer decision makes is not that intense. On the other hand, for
buying a car or a home, the decision-making process is complex and involves different stages.
The three distinct levels of consumer decision making are disused below:
Extensive Problem Solving
Such customer behaviour can be seen when customers need to purchase high-cost goods. To
take the final decision a number of brands are evaluated along with the pricing of each product
(Goddard, et al. 2012). The process of decision making is time taking and the costumes show a
high level of involvement example are buying a car, Laptop or TV.
Limited problem solving
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Such behaviour can be seen in the customers when they purchase clothes and cosmetic items.
The level of involvement is moderate and the process of purchasing is completed in a short
duration because the alternative brands are only a few (Vivek, et al. 2012).
Routinized Response Behaviour
In this type of behaviour, the consumer shows very little interest in the process of selection.
The decision making process is quick and the products purchased may be the articles of daily
use such as soap, shampoo, toothpaste, Snacks, milk, food etc (Hutter, et al. 2013).
1.7 FACTORS THAT INFLUENCE DECISION-MAKING
Voucher codes can expand its business quickly by analysing the patterns of behaviour of the
customers when they buy a particular product. Below discussed are some of the most
important factors which make an impact on customer decision making:
Economic factors
The economic station of the buyer strongly makes an impact on the decision of the customer. In
addition, the overall economic condition of the country also influences consumer decision
making. The unstable economic position of the buyer negatively affects its buying power.
Psychological factors
These factors include the motivation, perception, attitudes and beliefs of the customer. Every
individual has a different perception about situations and this perception impacts the decision-
making process of the customer. The goal and needs of the consumer also come under
psychological factors (Prendergas, et al. 2010).
Personal factors
The age and the lifestyle of the customer are the personal factors which are important factors
in the decision are making the process. With changing age, the perception and the motives of
the customers change and understanding the pattern of these changes may be beneficial for
voucher codes.
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Social factors
The social factors also have great potential to make an impact on consumer behaviour. These
factors are associated with the groups, family and social status and may impact the buying
decision positively or negatively (Jacob, et al. 2011). For example, if larger masses in the society
develop a liking for SUV’s against utility vehicles or prefer to have fast food over home-cooked
food, it can make a strong impact on the consumer decision making.
Cultural factors
Cultures factors are the value, beliefs, customs and traditions of a particular group. These
factors have a subtle impact on the consumer buying decisions and by understanding the
peculiar aspects of the culture marketers can design better policies to attract customers (Lee, et
al. 2010).
1.8 CONCLUDING STATEMENT
To summarise, the decision making of the consumer is influenced by a number of factors, these
factors are discussed in detail in the report. By understanding different factors making an
impact on the process of consumer decision making, Voucher codes can make a better offering
for the customers by adding all the essential features which appeal to the psyche of the
customers.Internet and the social media platforms are extensively used by the customers to
research deeply about the product, their features, price and functionality (Lee, et al. 2010). A
model of consumer decision making is also discussed in the report which explains the steps
through which the customer decides to buy a product.
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ASSIGNMENT 2
2.1 AN INTRODUCTION TO THE REPORT
This report will focus on understanding the difference in consumer decision making when the
business transactions are B2B and B2C. The consumer behaviour in these businesses is different
as B2B need to need to interact with the organisations while In B2C there is a need to interact
with the retail customers (Sen, et al. 2016). The influence of the culture on the decision making
of the customer is also discussed in the report.
2.2 COMPARE AND CONTRAST THE KEY DIFFERENCES BETWEEN B2C AND B2B
DECISION-MAKING PROCESSES
B2B BUYING B2C BUYING
The B2B business transaction happens
between the producers of goods and services
and organisational customers. For example,
The business transaction between Adidas
and Voucher codes is a B2B transaction
(Schütte and Ciarlante, 2016).
The B2C business happens between the producers
and the retail customers. When a customer buys
through the website of Voucher Codes it is a B2C
business transaction.
In B2B buying, the conversion process is
generally long-term. It can generally take 6
to 12 months
The conversion process in the B2C buying does not
take much time. The retail customer can also show
impulsive behaviour in the purchasing process.
Usually, personal marketing is used to make
a communication with the customers in B2B
buying.
Companies use mass media and digital platforms
to make communication with retail customers
(Lee, et al. 2010).
The decision to start a business with a party
needs a rational analysis and may take
longer consideration time.
The sales process in this type of buying is usually
shorter and the decisions are more based on the
impulse.
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2.3 EVALUATE HOW MARKET RESEARCH DIFFERS BETWEEN B2B AND B2C
MARKETING RESEARCH PROCESS
Step1- Problem Definition
It involves defining the marketing problem related to B2B or B2C business clearly. It also
involves deciding the aims and objectives for the research and deciding the time –frame
(Ballantine, et al. 2010).
Step2- Design the research
This step involves determining the type of research which is going to be used. It may be
exploratory, descriptive or casual research.
Step3- Identifying the source of data
The source of data may be primary or secondary; the selection depends upon the nature and
the scale of the business (Sen, et al. 2016).
Step4- Design the sample
The samples can be of two types which are probability and non-probability. The size of the
sample is also decided in this step. In probability sample, every entity has equal chances of
selection while in non-probability sampling the entities are selected according to the
convenience (Schütte and Ciarlante, 2016).
Step5- Collect data
The data is collected with the help of observation, experiment or surveys. The survey includes
conducting personal interviews or questionnaire.
Step-6 Analysing the data and present findings
This is the last step in the market research where the data collected is analysed and findings are
prepared that appropriate answers to the research question can be found.
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