Consumer Behaviour: Decision-Making Process for Luxury Cars

This report delves into the intricate world of consumer behavior, specifically focusing on the decision-making process within the luxury car market. It begins by outlining the five key stages of this process: need recognition, information search, evaluation of alternatives, purchase decision, and post-purchase evaluation. The report then examines how marketers strategically respond to these stages, incorporating economic, passive, cognitive, and emotional views to influence consumer choices. Furthermore, it emphasizes the critical importance of mapping the consumer's path to purchase, highlighting how this understanding allows marketers to tailor their strategies and communication effectively. The report then provides a comparative analysis of the decision-making processes in both B2C (business-to-consumer) and B2B (business-to-business) contexts, illustrating the key differences with specific examples. Finally, the report evaluates various market research approaches and methods used to understand the consumer decision-making process in both B2C and B2B environments, supporting the analysis with relevant examples.

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Introduction
According to Kotler et al. (2008), understanding consumer behaviour is very critical
in marketing management. This is because the consumer is the most important player
in the supply chain. The behaviour of consumer has an impact on any aspect of a
business such as production, profitability as well as on shareholder value
(Adnan,2014). It is therefore very critical for every business to research and
understand the behaviour of its customers.
While studying the behaviour of consumers, it is critical to understand the
characteristics that impact the behaviour of the consumer. This document evaluates
the stages of consumer decision making the journey for a luxury car. This helps in
understanding the process that a consumer undergoes before making a final decision.
This paper also discusses how marketers are reacting to the decision making the
process.
Additionally, the report discusses the importance of mapping consumer decision
making map and understanding the process that consumers follow when making
purchase decisions. The differences in the consumer decision-making process
between B2B and B2C as well as methods used by consumers to influence the
different stages of the process are discussed.
q.1.Explain and analyse the stages of the consumer decision-
making journey for a given product/service (P1)
According to one model of consumer behaviour I have selected..
There are five stages of the consumer decision-making process for a luxury car
customer as discussed below;
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Need recognition- this stage involves a customer realizing that they are missing
something (Aguirre-Rodriguez, Bosnjak and Sirgy, 2012). With time, this becomes a
need, and hence consumers begin to think of how they can fulfil the need. Therefore,
for example, a young footballer who has signed for a big club and signs a
multimillion-dollar contract may begin the process of buying a new luxury car. If the
footballer was driving a Toyota Corolla car before the contract, the vehicle might no
longer befit his new found social and financial status. After signing the deal, he, then
recognizes the need to own a luxury car that befits his status.
Information Search-This stage involves the buyer seeking information on a product
that can satisfy the customer (Bashar, Ahmad, and Wasiq, 2013). After recognizing
their need for a new luxury car, the footballer will begin searching for information
from different sources. He can get information from fellow footballers who own
luxury cars. The footballer can also go to the internet and search for luxury cars, and I
can read all the information he wants about the product.
Evaluation of alternatives- After obtaining information from different sources about
the luxury vehicles that are available, the footballer should then compare the various
alternatives that are available (Domina, Lee, and MacGillivray, 2012). Some of the
most popular luxury car brands include; Ashton Martin, Bugatti, Rolls Royce, Range
Rover Sports, and Mercedes Benz. The footballer can compare different aspects of the
various brands such as speed, quality, reputation as well as cost.
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Purchase decision-After evaluating all available alternatives, the footballer will then
finally decide on the choice of a car he wants. At this point, the consumer has
evaluated all available facts and arrived at a logical conclusion (Darley,Blankson, and
Luethge, 2010). The footballer can, therefore, go ahead and purchase the brand of
their choice.
Post-Purchase-Post purchase evaluation involves the consumer realizing whether the
product has met their expectations or not. Given the information that the footballer
had about the chosen car, he may feel as either satisfied or highly satisfied after using
the vehicle.
Question 2 - Evaluate how marketers are responding to the decision-
making process, applying relevant concepts and models
(M1, D1)
After understanding the consumer decision-making process, marketers have to design
their strategies to meet the behaviour of customers (Xu, Luo, Carroll, and Rosson,
2011). Marketers must react to the consumer decision-making process to design
strategies that are aligned with the process. Marketers react to the consumer buying
process through the four views of consumer decision making models. They
include;economic model, passive view, cognitive view and emotional view. The
marketers of luxury vehicles should investigate to understand the factors that affect
the buying behaviour of the customer in order to react accordingly.
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The economic view of consumer decision making reasons that a man is a rational
being and hence he evaluates all the alternatives in terms of value, features of the
product as well as cost before selecting a product or service which fully satisfies
his/her needs. One of the factors that affect consumer behaviour of a luxury car
customer is their purchasing power (Koklic, and Vida, 2009). It is therefore critical
for marketers to offer products that can be afforded by people with different
purchasing power. This can be achieved by offering substitute products which are
cheaper. For example, a Lamborgini marketer should manufacture several models of
the vehicle which vary in terms of price. This will offer customers with varying
purchasing power a wide variety to choose from. Marketers should, therefore, seek to
position themselves as unique, smart and stylish when positioning their product in the
market (Leek and Christodoulides, 2011). For example, the marketer of a BMW car
should seek to improve the physical and performance features of the car so that it can
become more attractive to buyers. The marketer can also add luxury items which are
not available in other vehicles. Marketers need to market their products as being
supreme in quality. This is one of the main considerations for customers when making
their purchase decision.
According to the Engel, Kollet and Blackwell theory of reasoned action, consumers
make decisions based on the information absorbed from marketing materials
Therefore, the information a marketer airs on television, on the internet or through the
newspapers is critical in influencing a customer to buy. At the information search
stage, research has indicated that the main consideration for customers is the quality
of the products. For example, Land Rover can market their brand as being a reliable
off road top of the range vehicle which is highly dependable. Lamborghini can market
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themselves as the fastest car on the planet. Marketers, therefore, need to ensure that
customers can readily and easily get information on their products. This can be
achieved by increased online activities as well as advertising in the right platforms.
This greatly influences the consumer decision-making process.
Marketers can also react to the buying behaviour of customers by understanding the
motivation of the customer. According to Maslow’s hierarchy of needs, marketers
must understand the motivation of a customer in buying a particular product. For
example, a modern luxury car maker focuses on the safety and security needs of
customers rather than on aesthetics. Each market segment has customers with a
different buying behaviour from the rest. It is therefore crucial for marketers to design
their message to meet the cultural needs of a particular market segment to influence
customers to purchase (Michaelidou,Siamagka, and Christodoulides, 2011).
The passive view of consumer decision making states that a customer can be
manipulated by self-serving interests and promotional efforts of the marketer. For
example, a tourist who is visiting a country for the first time can be convinced to visit
a certain place because they have little knowledge of the suitable places to visit.
The cognitive view of decision making argues that decision making is an emotional
process which involves a lot of thinking and hence can be rational or irrational. For
example when a person wants to buy a vehicle, they first evaluate the features of the
car they want. After that, they can evaluate the cars in the market which contains the
element that they want.
The emotional view explains that customers make decisions emotionally without
being rational. For example, a person with an old car can emotionally decide to buy a
new car after being mocked by another motorist.
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Question 3 - Explain why it is important for marketers to map a path
to purchase and understand consumer decision-making. (P2)
Mapping the journey to purchase is crucial to marketers because it enables them to
understand what information to feed to customers at a particular point in time (Mandl,
Felfernig, Teppan and Schubert, 2011.) Marketers can also be able to identify the
channels they will use to reach the customers. Once a marketer understands that the
first step in the buying process is needed recognition, the marketer designs a message
that provokes a potential customer to realize that they need to fill a certain gap. After
triggering the need in the consumer, the marketer should then offer various sources of
detailed information about the product which could help the customer to fulfil their
needs. Availing the right information to the customer at the right time can greatly
influence the customer to buy a product.
Understanding the decision-making process can also help the marketer understand the
behaviour of a customer at each point of their journey. This can, in turn, help the
marketer to tailor the products to achieve the needs and desires of the customer. For
example, if the marketer realizes that safety is the main consideration for a customer
before buying a luxury car, they need to ensure that the product offered to the
customer has enhanced safety features than that of competitors.
Question 4 - Compare and contrast the key differences of the
decision-making process in the context of B2C and B2B, providing
specific examples. (P3)
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There are several similarities and differences between buyer behaviour for B2B and
B2C businesses. One of the outstanding similarities is that for both models, the buyer
follows the same stages when making a buying decision (Yoon, Cole and Lee, 2009).
Another similarity between the two models is that both B2B and B2C customers, the
same sources of information gathering are used and most of the factors under
consideration are the same before settling on the right choice. For example, a
company seeking to buy a vehicle can consider factors such as fuel efficiency, cost of
the vehicle and suitability to achieve intended functions. There are however several
differences in the buyer buying behaviour for B2B and B2C. For B2B, identifying a
need cannot be influenced by an advertisement, unlike B2C where a customer can be
influenced to buy after seeing an advert. For B2B, the need must be identified in a
logical and practical procedure and hence cannot be influenced by emotions.
For most businesses, they have processes and procedures for purchasing products
(Brennan, 2014). Several people are involved in the decision-making process. For
example, when a manufacturing company intends to buy a new machine to increase
the production of tissue paper, several people from different departments and even
from outside the company are consulted before making the decision.
Another difference between business and consumer decision-making process is that
consumers can make impulse buying while businesses cannot (Jussila, Kärkkäinen
and Aramo-Immonen, 2014). For example, a consumer can walk and buy a clothing
store and admire a pair of trousers and decide to purchase it. For a business to
purchase, the purchase has to be justified to add value to the business.
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Question 5 - Evaluate the different approaches to market research
and methods of research used for understanding the decision-
making process in both B2C and B2B contexts, supported by
examples. (P4)
The market research activities are all about capturing, analysing, interpreting and
reporting on data about the market (Glöckner and Witteman, 2010). There are major
differences in the research methods used for B2C and B2C business. All B2C market
research is conducted using a combination of methodologies whereas the B2B
research is conducted using specific methods. This is because the B2B market is very
complex and hence there is a need to capture highly accurate specific data which can
be used in decision making.
Another difference between B2B research and B2C research is that B2B is likely to
use emails and telephone as data collection tools while B2C involves tools such as
live interviews and focus groups (Iankova, Davies, Archer-Brown, Marder and Yau,
2018). For example, it is easier to arrange a telephone interview with the CEO of a
company rather than organize a live interview or involve them in a focus group.
Study samples for B2B market research are relatively smaller as compared to B2C
research. Therefore, researchers rely on the 80/20 rule which helps in placing more
weight on most influential and important respondents. For example, B2B market
research may require only seven respondents whereas B2C research may require may
than 25 respondents to come up with reliable data.
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B2B research focuses on units rather than individuals unlike B2C research (Mihart,
2012). For example, a company with 150 employees may involve eight people in the
decision process, and hence the research focuses on units such as finance unit or
procurement units.
Questions 6 - Provide a coherent and justified evaluation of how
different factors influence decision-making and buying behaviour,
supported by specific examples. (M2)
Demographic factors are some of the factors which influence the buying behaviour of
a consumer. Demographic factors include factors such as age, gender, marital status
and family background (Frederiks, Stenner and Hobman, 2015). For example, a
teenager is more likely to make an impromptu decision to buy a piece of clothing,
unlike a 50-year-old man.
Marketing campaigns also have an impact on consumer behaviour. Advertising plays
a key role in influencing the purchasing decisions of a consumer. For example, a
customer who has been used to buying brand A of coffee may decide to try brand B
after seeing an impressive advert on TV or billboard.
Financial capability of a customer also influences their behaviour and buying process.
For example, a customer who earns £300 per week cannot buy the same type of watch
as a customer who makes £5,000 each week just because of the disparity in income
meaning they cannot afford to purchase (Han and Kim, 2010)
Cultural factors also have an influence on the buying behaviour of a customer. Culture
is the most basic cause of a person`s wants and behaviour. It is combination of values,
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beliefs and customs which influence a person to buy or not to buy a product. The
other factors which influence buying behavior include; lifestyle, beliefs and attitudes,
occupation, personality, family and social class.
There are several psychological factors which impact on consumer buying behavior
include;perception, ,motivation, learning as well as attitudes and beliefs. For examples
a customer may have the perception that McDonald`s has higher quality pizza than
Dominos. This may not be true in fact but the perception will lead the customer to buy
from McDonald`s.
Political factors influence buying behavior include the political message and political
stability. For example, a customer who is loyal to a certain political party may decide
to buy a particular product because a certain leader uses or associates with that
product.
Advances in technology also impact on consumer behavior. For example a customer
who is interested in technology will always seek to buy the most technologically
sophisticated product in the market.
Question 7 - Evaluate how marketers can influence the different
stages of the decision-making process of B2C and B2B, giving
specific examples to illustrate how elements of the marketing mix
also influence the decision-making process, supported by
examples (P5, M3)
A marketer can influence the decision-making process of consumers for both B2B as
well as a B2C business. The first way in which the marketers can influence the
process is by tailoring the features of the products/services to meet the needs of
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consumers (Encyclopedia Britannica, 2019). When a product is highly differentiated
to meet the needs of a specific customer, they do not need to go through the process of
information gathering or comparing alternatives because they already know what they
want (Hoejmose, Brammer and Millington, 2012). For example, a customer who
wants to buy an electric car does not need to go through the hustle of information
searching and comparison when they already know that Tesla is the unique electric
car in the market.
Marketers can alter consumer behavior through price. For example, a customer
looking for a house may opt to buy a house based on price after considering other
factors such as quality (Hough and Kobylanski, 2009). A customer can perceive the
quality of two products to be the same and hence make the decision based on price.
Promotion can greatly be used to influence the buying behavior of the consumer. For
a customer may not have been consuming brand X of whiskey and can decide to
purchase brand Y due to the advert they might have seen.
Place can also be used by marketers to influence decision making of a customer. This
can be done by ensuring that products are available at the right place where they can
be accessed conveniently by a customer (Your Article Library, 2019).
Marketers can influence physical evidence by ensuring that a product is physically
available in many places. For example, a marketer promoting a new detergent brand
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