Analysis of Consumer Psychology and Decision-Making Process Report

This report delves into the field of consumer psychology, exploring the factors that influence consumer purchasing decisions. It begins by defining consumer psychology and its importance for marketing managers, emphasizing the role of understanding consumer behavior in increasing sales and building customer relationships. The report examines the range of purchase situations, considering both internal and external factors such as brand awareness, economic conditions, mood, and environmental variables like crowding and time. It then analyzes the decision-making process, including psychological forces like attitudes, values, and beliefs, and how these impact consumer behavior. The report also discusses the influence of the retail environment, including store design, location, and the use of virtual merchandising. It also details the importance of consumer perception, selective attention, and the impact of physical factors on purchasing behavior.

Consumer Psychology

Table of Contents
INTRODUCTION...........................................................................................................................1
SECTION 1......................................................................................................................................1
1. Range of purchase situation....................................................................................................1
SECTION 2......................................................................................................................................4
2. Purchasing Situations..............................................................................................................4
3. a) Discussing the two situations related to the Physiological factors.....................................5
3 b) Demographic factors............................................................................................................7
SECTION 3 .....................................................................................................................................8
4 Decision making process..........................................................................................................8
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Consumer psychology is defined as the study for identifying the reason for purchase of
products and services by consumers. Consumer psychology includes the way shopper or
consumer decide to purchase certain goods ignoring the rule. It is more concerned with
examining the way customers react to advertising campaign. Consumer behaviour is defines as
the selection, purchase and consumption of goods as well as services by individual for
satisfaction of wants. It is very essential for marketing manager in organisation to develop
understanding about consumer as this activity will help business entity in increase sales volume
and profitability. This activity will also enable enterprise to identify the customer need and
develop as well as maintain healthy relationship with clients. The knowledge about the consumer
behaviour assist marketing manager in formulating effective marketing strategies and predicting
or analysing the future trend.
The report has focus on analysing the decision making process and identifying the factor
that motivate people to buy particular good or service. In present research, has facilitated
investigation to determine underlying cognitive procedure that defines the choice of customers
and the manner they provide response to influence of marketing. The project on consumer
psychology also emphasizes on determining the way external environmental factors influence or
impact consumer decision making process.
SECTION 1
1. Range of purchase situation.
When the consumer have to make selection among the two or more products or services
the various elements that a been considered by consumers includes various aspects of brand such
as brand awareness, brand identity perception, organisational performance etc. The other factors
that attract consumer to buy particular product or services include product placement, packaging
etc. External macro environmental variables that influence shopper buying decision are
Demographic, Economic, Situational, social and technological forces.
Mood is the important as well as temporary element that impact spending pattern. As
some people may enjoy purchasing goods and services. It may be fun for some individual. A
sour mood is the variable that can spoil the customer desire to buy particular item. Economic
elements has great influence on the buying decision of the consumer. It has been analysed that
economic Crisis in the country has great impact on the spending by client. Economical factor
1

such as economic crisis, income of individual, inflation also have great influence on consumer
buying behaviour. The organisation is required to introduce mid price or wide range of products
as this will assist firm in attracting more number of consumers. Due economic factors it has been
analysed that due to increase in prices of goods or services there is decrease in rate of client that
facilitated the shopping for entertainment. It has been analysed that glum mood of consumer is
also beneficial for organisation. The various elements such as sales, discounts and offers, festival
or celebration mood attract or encourage people to facilitate shopping of clothes and other
acesosaries.
Personal factors that affect consumer buying decision of behaviour includes Personality
as well as Self concept, Gender, age, stage of life, lifestyle etc. Personality is the thing that
defines the individual dispositions that help person in differentiating themselves from other and
encourage them to develop unique characteristics. The big five personality attributes are
openness that describes the intention of people to gain experiences. It also includes
conscientiousness the level of diligence that individual posses, extraversion, agreeableness that
indicates the way individual get agree with other person or influenced by other, Neuroticism is
defined the way individual is prone to negative mental state (Oyserman and Schwarz, 2017)
Environmental variables may be beneficial for the firm or retail store that are selling
seasonal products such as umbrella during rainy season, Due to this element the company may
has to face customer complain regarding the quality and late delivery of the products and
services. The business unit may face challenge regarding the delivery of goods or services at
certain places. In order to deal with these environmental factors by offering attractive or special
or innovative products. The other method that will help business entity in attracting more number
of customer is using online platform for selling goods and services.
Crowding is the another elements that has great influence or impact on consumer buying
behaviour. Some approaches have demonstrated that customer feel comfortable shopping in the
retail store which is less crowded. Client appreciates the organisation that takes efforts to prevent
overcrowding in their retail stores. While it also have been identified that overcrowding is
another factors that may also attract consumer to buy product or services that has been purchased
by other people. In other words the overcrowding may also have positive effect on customer
behaviour. This process is also known as herd behaviour. Due to the overcrowding in the store
2

the individual may feel angry or may not prefer to purchase goods or services from such stores
(Mikeska, Harrison and Carlson,2017.)
Price elements is the another element that have great influence on shopper. The herd
behaviour of consumers assist organisation in rising the prices of their goods and services.
However, the overcrowding may further lead to uncertain happening or situation such as death of
people. It may become difficult for the management or employees to manage situation and
people. Social situation or trend is the another factor that may have influence on customer buying
behaviour. Some social element may restrict individual to buy particular product or services. The
consumption of the goods or services may get much impacted by the situation or condition in
society.
Time is the significant element that is considered by consumer and have great effect on
customer buying behaviour. It also has great impact on buying pattern. Money or financial
resource is the important variables that have great influence on the consumer buying behaviour.
As these are the resources that allow consumer to fulfil their need and demands.
The object of the shopping is another factors that have effect on consumer buying
decision. The client may purchase goods for fulfil frequent needs, for gifting other person, for
personal use etc.
Marketing influence Psychological Buying procedure Influence of
environmental
influence
Product programs
Distribution
Advertisement
Price
Personality
Affect
Perception
Motivation
Recognition of
problem
Objective of buying
Types of Purchase
Decision making
Consumption
experience
Post buying procedure
Physical environment
influence
Affect of social,
cultural and
demographic factors.
3

SECTION 2
2. Purchasing Situations
The consumer behaviours is influence by various psychological as well as personal
factors, external elements such as market trend, culture, family background etc. The organisation
have focus on identifying the current market trend so that they can influence or encourage
customers to buy company products and services. The enterprise always plans to attract
consumer through the things that business entity can control such as music, availability of goods,
pricing, advertising technique, structure etc. These elements have great effect on consumer
buying behaviour. The marketing personnel in an enterprise Considered various things such as
design of the store and layout when introducing and planning to provide additional facilities to
consumer. As some approachers related to consumer believe that the additional facilities
provided to the customer influence them to spend more and buys several products or services.
For instance Grocery stores always positioned food items like bread and milk items on the
opposite ends of the outlets as it is the products that are required by consumer. It also provides
customer an ease to access and buy the product (Mandel, Rucker, Levav and Galinsky,2017)
The another factor that influence consumer buying behaviour is store location. The
business unit is required to locate their stores at central place as this will assist business entity in
attracting more number of customer and proving them ease in buying company products and
services. There are many physical Things that can be controlled by retail stores these are design
as well as structure of the store, music, lighting, environment etc. as these variables have great
effect on consumer buying decision. For instance, If the individual has visited the store that is
attractive and have maintained hygiene, manager of the store has taken initiative to make
customer comfortable in environment and has provided effective services as well as facilities to
consumer this activity of the store manager will influence and encourage individual to visit the
store again ans make frequent purchases. It will also allow business entity an opportunity to
develop and maintain healthy relationship with client. The research report demonstrate that
strategic fragrance lead to consumer stay in store for longer period, purchasing more products. It
also allows retail store to leave positive impression on customers. There are some physical or
external environmental elements that have great influence on shopper but are uncontrolled by
organisation. These variables have great impact on firm sales and profitability. The marketing
manager in organisation is required to facilitate market research as it will assist them in
4

analysing the needs and demands of customer. This activity will also allow firm to provide
satisfaction to customers and gain client loyalty (Oyserman and Schwarz, 2017)
Perception is the another major elements that has great effect on purchasing decision of
customer. It is the process through which a consumer select enterprise and interprets information
inputs to develop meaningful picture of the world. For instance, individual may perceive a fast
talking sales man or marketing personnel as aggressive while other person may consider
salesman as intelligent. This perception is being developed by the customer through the
advertisement or messages that has been communicated by business entity through newspaper,
magazines, television, internet etc. The information that has been gained by customer through
various sources about the firm or particular brand has great effect on their buying decision and it
has great impact on the perception of customer about particular company. Selective attention,
retention, distortion are the three different perceptual procedure. Marketing personnel adopt
selective attention approach for attracting consumer attention. The organisation is required to
introduce after sales services and need to focus on provide good quality product or services to
customer as this activity help the firm in gaining consumer loyalty and developing as well as
maintaining healthy relationship with client (Kirmani and Ferraro,2017)
The business Entity can adopt Virtual merchandising as the marketing strategy. As this
plan that will allows enterprise to provide education to customer or shopper. It also provides firm
an opportunity to create desire and attract more numbers of buyers as well as increase sales
volume.
Product grouping will enable consumer to get ease in buying and making the best choice
of product. It also provides them a chance to compare the price of one item with other and make
suitable decision. This activity of the retail store assist business entity in motivating the customer
to purchase more products or services. Positioning the confectionery goods or item very close to
the kids wear helps enterprise in attracting children (Chen, Wan and Levy, 2017)
3. a) Discussing the two situations related to the Physiological factors.
Psychological forces include Attitudes, values and beliefs. Attitude may be positive ,
unfavourable or neutral of person towards an object. The forces that influence consumer buying
decision include motivation, Perception and beliefs and attitude. Beliefs are considered as strong
perception or opinion (Mick, 2017) Values is referred to as the belief or opinion that is based on
5

principle or idea. Consumer Psychology is used by organisation for developing understanding
about the way customer relate to the goods they purchase and consumes. Perception is refers to
as selecting, organizing and interpreting data or information in a manner to produce a meaningful
experience for the customers. Other than this the social situation have great impact on Purchase
decision or behaviour of customer. The social situation for instance the child under the age of 14
years instead of going to school working in retail outlet. This situation can make customer less
willingness to purchase goods from such shop or retail outlet. The various buying approaches
that can be adopted by the consumer in such situation these are fair trade, boycott and simply
purchasing less goods or services from such firm that employ child labour. The buyer may feel
to boycott such brands or companies product those who facilitate unethical business practices.
This factor also have great impact on the physiology or the mentality of the consumer. Unethical
practices have great impact on the customer loyalty. It also has great effect on the relationship
between the client and organisation. Some enterprise takes support of community. As the child
labour is considered as the form of child abuse (Kamaruddin and Kamaruddin,2017)
The domestic economic situation may be critical to interfere whether the customer action
can enhance or improve the welfare of working children. It is required by customer to develop
understanding in order to identify the reason due to which children are working in particular
organisations, the condition of the market in case lack of child labour in the target sector or
industry and other options that are available to prevent or protect the children that has been
greatly impacted by customer actions. When the consumer take such actions to destitution
children from their job, preventing the employment of children may driver them and their
families towards poverty (Aras, Syam, Jasruddin,Akib and Haris, 2017) There are many cases
where with the support of complete as well as detail information its is easy to provide
justification with regards to consumer actions in order to provide welfare to children and
improving their condition. In the situation when children are bonded or somehow are facing
difficulty in changing their jobs that its is easier for consumer to support such children on the
basis of their preference. When the decision is made by the agent or employer regarding time
allocation then it should be base on consideration the best thing for the child that person taking
the action, the subject matter of Consumer action is much stronger as it has focus on child
welfare and have great impact on organisation policy as well as procedures related to
employment. There are few cases which demonstrate that increase in child labour may have great
6

as well as negative effect on the labour market. It may lead to depression in the market, Decrease
in adult wage the promotion of this factor will help in eliminating the child labour supply in
clothing as well as other industries. The consumer actions if taken without making essential
consideration may lead to punishment to poor people in the world for being poor.
The organisation can take various initiative that will assist firm in gaining customer
loyalty. It can also firm to develop and maintain healthy relationship with their clients. The
actions that will help business unit in increasing its sales and profitability are the business entity
should work with other social institution in order to imp[rove the condition in which the children
work rather than emphasizing on not allowing them to work. This activity will also provide firm
an opportunity to generate brand awareness and enables business entity to change consumer
perception by communicating organisation objectives. The other option that the legal authority is
required to take in order to provide better and safe working environment is to formulate or
establish some standards that may includes the various concern raised by the customer activist.
However,., These due to these regulations and the standards the organisation dealing in clothing
or any other industry may have to bear the additional cost to hire employees and providing them
with effective, healthy and safe working environment. These legislations or code of conduct will
also help an enterprise to retain employees for long term and maintain healthy relationship with
them. As this factor have great effect on the product quality as well as services which is top be
delivered to the consumer. This factor also has great influence on buying decision as well as
perception of customer towards particular brand (Jost,2017.)
3 b) Demographic factors
The demographic factors include size of population, for instance fertility, Morality and
migration. This information is very beneficial for organisation as it allows business unit to
provide basic product or other special type of information or detail to customer. The other
demographic variables that effects consumer buying behaviour and influence purchasing
decision include Income, age, geographic region etc. The consumer making the shopping mood
based on the two factors that is need and income. The income is the significant factors that is
considered by individual when planning for shopping. This is only the variables which is very
important to have in order to buy particular good or services. Rise in income level influence the
buyer to purchase more products and have positive attitude towards firm (Ashton,2017.)On the
other hand less income restrict type shopper from buying goods and encourage them to have
7

negative attitude towards organisation The premium range of items are developed by
organisation in order to attract the people belonging to the upper level of the society and belong
to the high income group. It has been identified that the individual or people with lower income
are more sensitive to price of the goods. Consumer Buying preference also dependents on
geographical regions. The organisation that has high potential to fulfil this needs as well as
demands of customer can increase its sales and profitability. For instance, consumer in the
market often prefer certain food and drink flavours in certain markets. The business entity that
sell the flavours consumers desire in various areas are more likely to profit. Those who do not
offer these flavours may risk losing customers to other competitors.
The market survey or research is the effective method that can be used by organisation
for accumulating the demographic information related to the customer. This tool will help firm in
identifying and fulfilling the customer needs and demand. It also provides firm an opportunity to
maintain balance between demand and supply of product or services. Market survey provide
business entity a chance to provide quality products to customer and develop as well as maintain
healthy relationship with clients (Gabler, Landers and Reynolds., 2017)
SECTION 3
4 Decision making process
Decision making procedures- Is refers to as the decision making process that is adopted by
customer regarding transactions to be made in the market before, during or after buying of
product or services. This procedure is considered as the cost benefit analysis.
The decision making procedure by consumer include various steps such as :
Problem Recognition-In this stage the problem or need of buying particular problem is identified
by consumer. The customer has to make product choice among the various gods option available
foe consumption. At this stage the problem is recognised by consumer and the need to be
satisfied has been identified. After analysing or recognising the want the customer intends to find
effective solution to solve problem and fulfil the desire needs a swell as wants. The failure in
catering this requirement may lead to discomfort. This situation may arise due to the following
reason such as an inability to get work done on Time, unable to get desired quality or quantity of
Product etc.
8

Information search-After the selection of the item that has to be consumed, In next step, the
activity that has been conducted by consumer is Information search. This is the element that has
great influence on customer buying decision. The customer prefer to buy such pro duct or item
whose information or detail is easy available on internet or are easily accessible. Perception is
defined as interpretation of data which can be received or gathered by utilisation of six senses by
human being. The customer tendency or potential to search for information or product detail
assists marketing manager in organisation in formulating effective marketing strategies.
Customer or consumer utilises both memory, previous experience of buying particular brand
product and company or product detail fort developing perception about the firm. The customer
can get information or detail on the product from various sources such as internet, families,
friend , companies offering the goods, advertisement etc. The organisation is required to adopt or
formulate content marketing strategy as it will provide enable business unit to provide complete
detail or information about product to consumer.
Alternative evaluation :The next activity that has been facilitated by consumer is evaluation of
data. Buyer Evaluates all the alternatives that are available for buying particular product or
service. In context to this factor the market manager in an enterprise need to develop effective
consumer policy and marketing strategies that demonstrate that the business unit or company are
more concerned about fulfilling the needs and demands of their client.
Purchase Decision-Purchase decision is made by consumer after conducting the evaluation
procedure. It is not at all necessary that all buying decision made by customer may convert into
actual purchase.
Post purchase Behaviour-In this stage evaluation is made after purchasing particular product or
services. At this stage product quality, price etc. helps the customer in identifying that whether
individual has made right buying decision or not (Symmank, Mai, Hoffmann and et.al., 2017. )
Consumer Buying Decision Model
Black Box model is the effective tool that represents the interaction between two forces
such as consumer responses and environmental variables. This model has been formulated
considering the characteristics of consumer and decision making process. All together this
hypothesis represents the interaction in between the external stimuli, consumer decision making
procedure, customer responses.
Environmental Customer Black
9

factors Box
Marketing Surrounding
situations
Consumer
Characteristics
Decision making
procedure
Buyer Choices
Product
Place
Price
Promotion
Political
Economic
Social
Technological
Legal and
Environmental
Motivation
Perception
Attitudes
knowledge
lifestyle
Identifying
problem
Searching
information
related to product
Making buying
decision
Post buying
behaviour.
Goods
Brands
Dealer
Purchasing
amount or range
Time of buying
particular
product.
Rational Consumer choice theory -The purchasing capacity of consumer in order to deal with the
price of good is totally based on income of individual that is known as consumer preference.
Multi attribute model- This is the effective model that can be adopted by organisation for
evaluating the customer overall buying attitude. This framework has three components these are
behaviour, effect and cognition. The salient belief is considered as belief that individual may
gain during the evaluation of good or services. The Hierarchy of the effect of these three
component is the effective concept that assist organisation in comparing the contribution of
motivational factors in encouraging shopper to pay particular product or services (Zheng and Jin,
2017)
CONCLUSION
The study has highlighted the various factors that has great impact on consumer
behaviour and influence on customer buying decision. The report has successfully demonstrated
the way various internal as well as external factors motivates shopper to buy particular product
or services. It has been identified that there are various stages that the consumer has to undergo
through in order to make effective as well as suitable buying decision. There are various
elements such as technology, packaging , price, income, person etc. are considered by customer
before making any transaction in the market. The major factor that influence consumer to
purchase particular product or services include Psychological, environmental, marketing and
10

personal factors. It has been identified that development of understanding about consumer
behaviour assist marketing manager in development of effective marketing strategies. It also
allows firm to gain customer loyalty and analyse as well as fulfil the needs of customer. This
activity also provides marketing manager in predicting the future demands as well as trends in
the market and developing strategies accordingly.
It is suggested to manager in business entity to focus on ensuring the fair trade practices
as it will help firm in attracting more number of customers and gaining their loyalty. It has been
recommended to consumer that they should consider various things before taking actions with
regards to providing the welfare to the children who are working in factories.
11

REFERENCES
Books and Journal:
Mick, D.G., 2017. Buddhist psychology: Selected insights, benefits, and research agenda for
consumer psychology. Journal of Consumer Psychology, 27(1), pp.117-132.
Jost, J.T., 2017. The marketplace of ideology:“Elective affinities” in political psychology and
their implications for consumer behavior. Journal of Consumer Psychology, 27(4),
pp.502-520.
\Oyserman, D. and Schwarz, N., 2017. Conservatism as a situated identity: Implications for
consumer behavior. Journal of Consumer Psychology, 27(4), pp.532-536.
Mikeska, J., Harrison, R.L. and Carlson, L., 2017. A meta‐analysis of parental style and
consumer socialization of children. Journal of Consumer Psychology, 27(2), pp.245-256.
Mandel, N., Rucker, D.D., Levav, J. and Galinsky, A.D., 2017. The Compensatory Consumer
Behavior Model: How self‐discrepancies drive consumer behavior. Journal of Consumer
Psychology. 27(1). pp.133-146.
Kirmani, A. and Ferraro, R., 2017. 23 CHAPTER Social Influence in Marketing: How Other
People Influence Consumer Information Processing and Decision Making. The Oxford
Handbook of Social Influence.pp.415.
Baumeister, R.F., Clark, C.J., Kim, J. and Lau, S., 2017. Consumers (and Consumer
Researchers) Need Conscious Thinking in Addition to Unconscious Processes: A Call for
Integrative Models, A Commentary on Williams and Poehlman. Journal of Consumer
Research.
Chen, R.P., Wan, E.W. and Levy, E., 2017. The effect of social exclusion on consumer
preference for anthropomorphized brands. Journal of Consumer Psychology.27(1).
pp.23-34.
Kamaruddin, A.R. and Kamaruddin, K., 2017. Malay culture and consumer decision-making
styles: an investigation on religious and ethnic dimensions. Jurnal Kemanusiaan, 7(2).
Aras, M., Syam, H., Jasruddin, J., Akib, H. and Haris, H., 2017, July. The Effect of Service
Marketing Mix on Consumer Decision Making. In International Conference on
Education, Science, Art and Technology (pp. 108-112).
12

Ashton, A.S., 2017. An investigation of a decision making process. CAUTHE 2017: Time For
Big Ideas? Re-thinking The Field For Tomorrow. pp.73.
Gabler, C.B., Landers, V.M. and Reynolds, K.E., 2017. Purchase decision regret: Negative
consequences of the Steadily Increasing Discount strategy. Journal of Business Research,
76. pp.201-208.
Symmank, C., Mai, R., Hoffmann, S., Stok, F.M., Renner, B., Lien, N. and Rohm, H., 2017.
Predictors of food decision making: A systematic interdisciplinary mapping (SIM)
review. Appetite. 110. pp.25-35.
Zheng, W. and Jin, L., 2017. A Consumer Decision-Making Model in M-Commerce. Mobile
Commerce: Concepts, Methodologies, Tools, and Applications: Concepts,
Methodologies, Tools, and Applications. pp.107.
13