Consumer Behavior and Decision Making: A Case Study on Car Purchase

Understanding the Five Critical Stages of Consumer Decision Making

Question:

Analyse the internal and external factors influencing the consumer decision making process for a major purchase.
 

Consumer behavior is the phase that the consumers undergo while making a major purchase and this behavior is constantly influenced by external and internal factors of usage and decision. Based on the real-life situations, the buying behavior of the consumers are in a constant stage of evolving. The process of decision-making undergoes five critical stages while buying services and goods and therefore, the marketer has to identify and understand these five steps for proper proceedings towards the product and close the selling process (Solomon, 2014).

Presently, one of the most testing situations of the marketers is the identification of the demand of the consumers and explanation for the requirement of a specific service or product. This information related to purchasing decision is crucial for the marketers to understand as it helps them to identify what have the most significance for the consumers and the factors that influence their decision making regarding a purchase. This helps them to create their marketing strategies and programs according to the need of the consumers.

The five steps of decision making by the consumer are information search, information, alternative evaluation, post-purchase behavior and purchase. These steps serve as guidelines for the marketers that help them to understand the requirements and communication of the consumers and act accordingly (Juster, 2015). It is not necessary for the consumers to move exactly as stated but it depends on the financial status, the buying stage and the type of the product.

The present report is about the decision making of a consumer while purchasing a car. Since it is a major purchase, therefore the internal and external factors influencing the consumer decision making will be critically analyzed. This report is based on the decision making of Mr. David Jones, who happens to be one of my acquaintance while he was about to purchase a new Toyota Corolla. 

The internal influence that affects the decision making of the consumers regarding a major purchase depends on the way of thinking and lifestyle of the consumers. These are also known as the psychological influences and depicts several stages of decision making like identification of feelings, examination and collection of information, development of beliefs and ideas and taking the specific action (Solomon, Russell-Bennett & Previte, 2013).

Mr. Jones is a banker in Melbourne with a descent income and he decides to buy a new car as per his needs. He has a family of two children and they have their preferences while making the decision for purchasing the new car. Several recommendations came up and was finalized with Toyota Corolla. This finalization was influenced by several internal factors that have been summarized below.

1. Perception: It is a psychological variable that is involved in the decision making of purchasing a car and influences the behavior of the consumer. The individuals perceive their requirements through the media messages and disregard the remaining (Butkevičienė, Stravinskienė & Rūtelionienė, 2015). Perception is of two types that include the low-level one called as perceptual vigilance and the high level one called as perceptual defense and these are shaped by expectations, memory and learning.

Mr. Jones before buying the car went through an extensive research process and estimated several other cars in the same category according to his need and budget. However, he went on information from different media sources and finally shortlisted a few names according to his perception that stressed mostly on the safety and security of his family.

2. Learning: Learning is a change in the organization or content of behavior or long-term memory. It enables the consumers to acquire the consumption and purchase knowledge and the experience regarding the behavior that is related to the future. Learning can be acquired by thorough information search from different sources or may be through incidental learning. Learning provides useful direction towards the motive of purchasing (Lysonski & Durvasula, 2013).

Internal Factors Influencing Mr. Jones' Decision to Purchase a New Toyota Corolla

After a thorough investigation from the various resources, Mr. Jones learned much about the cars that are the best fit for his requirements. He needed a car that could help him to go to his office daily and go for family outings as well. Therefore, a sedan would best fit his requirements and so he learned much about the sedans from everywhere.

3. Motivation: It is related to the desire of having the expected outcome and is closely associated with the involvement of the consumer in decision-making. Consumers that are highly motivated will get actively involved physically and mentally in the process of purchasing (Betsch & Haberstroh, 2014). Marketers can make the consumers motivated by providing them with opportunities for learning more about their product and allowing them to experience the services of the product.

Mr. Jones collected information about the sedans from several websites and other media articles actively and went through the video previews. While conducting the research, he analyzed several situations related to his financial position, overall value, time constraints and perceived risk. To all his questions, an answer pointed towards the sedans. Moreover, Toyota was offering a free test drive offer for their sedans at his city that motivated him to go for a sedan by Toyota.

4. Personality: It signifies the psychological characteristics that state the reaction of a person to his surrounding environment. Personality reflects the choice of the consumers for a particular brand or product and helps the marketer to promote the products. Personality is categorized based on the traits, likes and dislikes of the individuals (Lee et al., 2014).

Since Mr. Jones is a banker and aged about 30 years, therefore he would prefer a brand that would suit his personality and occupation. Toyota is a reputed brand in Australia and has been awarded for on-road performance of its vehicles, especially its sedans (Vohs et al., 2014). Mr. Jones will be using his car for multiple uses like daily transport to his workplace and family outings, therefore, sedans by Toyota will suit his personality the most according to the looks, features, comfort and safety.

5. Attitude: Attitude is a conglomerate of the feelings, behavioral intentions and belief of the consumers towards an object with reference to the context of marketing. These components are interdependent and collectively represent the attitude of the consumer towards the object. It is a psychological variable that affects the decision-making process of the consumers regarding a purchase and evolves out of a negative or positive evaluation (Aguirre-Rodriguez, Bosnjak & Sirgy, 2012).

Mr. Jones, after the research work and test drive, was certain of his choice for the sedan by Toyota as it met all his expectations and requirements successfully. He developed a positive attitude towards the brand and decided to go for Toyota Corolla as it was the best in its class in terms of price and features. He decided to discuss the car with his family as his family is actively involved in the decision-making and he would like to take their viewpoints and suggestions into consideration. 

Apart from the internal influences, external influences also affect the behavior of the consumers. These influences are not individualistic but are external to the consumer. Consumers are human beings that live in a society where they are attached socially in groups. The members of the groups tend to share their common interests and influence each other, as they share their values and rules. Most of the influence is from the primary groups like the family members and the secondary groups include the organizations and clubs, which have lesser influence when compared to the primary group (Oliver, 2014). Both these groups exert the social power that influences the behavior of a consumer while decision making. Two of these external influences have been discussed below.

1. Culture: Cultural factors include the set of ideologies and values of a particular group of individuals. Cultural factors influence the decision making of an individual as every individual has different principles, beliefs and habits that he develops from his backgrounds and family status (Sørensen, 2015).

Mr. Jones is a native Australian and therefore, he likes to go for a car that is descent in looks as well as superior in performance. According to his position in office, he would like to go for a brand and model that suits well his personality and position. His car would reflect his social success and therefore, he would pay more attention towards the brand value, rather than a cheaper alternative.

2. Group Influence: Since human beings are socially inherent, various individuals in a group influence each other. The framework for the analysis of group influence on the consumers is called reference groups where the consumer uses a group as a standard reference against which, he makes the comparisons (Beach, 2014). Various degrees of influences come from the reference groups. The primary groups have a huge influence, as they are the members of a fraternity while secondary groups have lesser influence like the weekend groups.

Mr. Jones discussed his idea of buying Toyota Corolla with his friends and club associates, as it was an important decision that involves a major financial investment. Therefore, he was looking for feedbacks and loopholes that he might have missed in his research. The ideas and suggestions would help him to strengthen or reconsider his decision.

After all the decision making process, Mr. Jones purchased a new Toyota Corolla as it was a safe and affordable vehicle for his daily use. His family influenced him for safety and his age and financial status influenced him for not being too much extravagant on luxury cars. The decision making process was a lengthy one as purchasing a car turned out to be a complex process. The car satisfies his requirements and fits perfectly in his budget. Consequently, the marketers should also understand the buying decision of the consumers and their safety needs.  

References

Aguirre-Rodriguez, A., Bosnjak, M., & Sirgy, M. J. (2012). Moderators of the self-congruity effect on consumer decision-making: A meta-analysis. Journal of Business Research, 65(8), 1179-1188.

Beach, L. R. (2014). Decision making in the workplace: A unified perspective. Psychology Press.

Betsch, T., & Haberstroh, S. (Eds.). (2014). The routines of decision making. Psychology Press.

ButkevičienÄ—, V., StravinskienÄ—, J., & RÅ«telionienÄ—, A. (2015). Impact of consumer package communication on consumer decision making process.Engineering Economics, 56(1).

Juster, F. T. (2015). Anticipations and purchases: An analysis of consumer behavior. Princeton University Press.

Lee, S. W., Schwarz, N., Landau, I. M., Robinson, M. D., & Meier, B. P. (2014). Metaphor in judgment and decision making. Metaphorical thought in social life. Washington, DC: American Psychological Association.

Lysonski, S., & Durvasula, S. (2013). Consumer decision making styles in retailing: evolution of mindsets and psychological impacts. Journal of Consumer Marketing, 30(1), 75-87.

Oliver, R. L. (2014). Satisfaction: A behavioral perspective on the consumer. Routledge.

Solomon, M. R. (2014). Consumer behavior: buying, having, and being. Engelwood Cliffs, NJ: Prentice Hall.

Solomon, M. R., Russell-Bennett, R., & Previte, J. (2013). Consumer behaviour: Buying, having, being. Pearson Australia.

Sørensen, J. (2015). Understanding how culture influences emotions in consumer decision-making. In Finding Solutions for the Chanllenges of Internationalization. Aalborg Universitetsforlag.

Vohs, K. D., Baumeister, R. F., Schmeichel, B. J., Twenge, J. M., Nelson, N. M., & Tice, D. M. (2014). Making choices impairs subsequent self-control: a limited-resource account of decision making, self-regulation, and active initiative.