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Buyer Behaviour

Buyer Behaviour 1.0 Introduction The purpose of this report is to analyse and evaluate the decision-making process consumers go through when purchasing health supplements and formal clothing. The objective is to compare the differences between the two processes and identify the implications each has on marketing strategy. This has been achieved through both secondary and primary research. The secondary analysis involved research using the textbooks and articles on health supplements and formal clothing and the application of relevant consumer behaviour concepts and theories. This report will also thoroughly discuss, compare and report on the typical decision making processes likely to be followed by a selected target market for the purchase and use of health supplements and formal clothing. This will involve the primary research in which 8 people will be interview with questions regarding to consumer behaviour in the purchase of health supplements and formal clothing.

The report is structured in a way to present each aspect of the decision-making processes for formal clothing, which followed, by health supplements to enable comparison to be made in each section. 2.0 Target Market Health supplements is an industry which is growing because of intelligent, healthy people. (National Business Review, 1996, p.32). In New Zealand, the research shows that people are more and more aware of good health, its relationship to lifestyle, and how they can use health supplements to augment self heal health care. In other words, people today are looking for prevention rather than just cure. In 1994, 32% of New Zealanders took some form of supplement and in the latest study in 1997 this figure has increased to 74%. Each different product market consists of buyers, and buyers are all different in one way or another.

They may differ in their wants, resources, locations, buying attitudes and buying practices. Because buyers have unique needs and wants, each buyer is potentially a separate market. For example, in the health supplements market, the seller identifies market segments, and develops different health supplements products and marketing mixes tailored to each needs and wants. Both health supplements and formal clothing are market which its’ products appeals to many buyers. Many people once in their life would have bought both products at sometimes during their life stages. There is no single way to segment a market. In this report, students are selected under the occupation market segment as the target market.

The target market consists of students studying at universities. 3.0 Involvement Consumer involvement is the perceived personal importance and interest consumers attach to the acquisition, consumption, and disposition of a good, service, or an idea. As their involvement increases, consumers have a greater motivation to attend to, comprehend, and elaborate on information pertaining to the purchase. (Mowen & Minor, 1998, p.64). In the case of low involvement, consumer views a purchase as unimportant and regards the outcome of his or her decision as inconsequential. Because the purchase carries a minimal degree of personal relevance or identification, the individual feels there is little or nothing to be gained from attending to the details of a purchase.

(Hanna & Wozniak, 2001, p.290). For example, a purchase of health supplements requires minimal or no premeditation and planning for some consumers. High involvement purchases are those that are important to the consumer either from a financial, social, or psychological point of views. The purchase is characterised by personal relevance and identification with the outcome. (Hanna & Wozniak, 2001, p.291). An individual anticipates a potentially significant gain from expending time and effort in comparison-shopping before buying.

For example, a girl purchasing an expensive ball dress has a high degree of personal identification. Therefore, a high level of felt involvement can increase an individual’s willingness to search for, process, and transmit information about a purchase. If a consumer perceived a product, which is important or valuable to them, it is more likely that they will have a high involvement with their decision process. The most important factors influencing a consumer’s involvement level are their perceived risks. The purchase of any product involves a certain amount of risk, which may include: Product Failure – risk that the product will not perform as expected.

(e.g., will the health supplements makes me feel better and prevent me from diseases?) Financial – risk that the outcome will harm the consumer financially (e.g., will buying a formal suit cause my financial hardship?) Operational – risk that consists of alternative means of performing the operation or meeting the need (e.g., is there any maintenance required for the ball dress?) Social – risk friends or acquaintances will deride the purchase (e.g., what ill my friends think of me in this dress?) Psychological – risk that the product will lower the consumer’s self-image (e.g., will I look stupid if I wear this dress?) Personal – risk that the product will physically harm the buyer (e.g., is this health tablet meant to do me any good? Will it do as it said it will perform or will it ruin my health instead?) In a high degree of perceived risk, decisions in this case may require significant financial commitments, involve social or psychological implications. For example, the purchase of formal clothing, in such cases, internal and multiple external information sources are sought. Information is likely to be processed actively and carefully before a decision is concluded for the purchase. In other words, alternatives are carefully evaluated, and their attributes are painstakingly matched and compared. In the case of low degree of perceived risk, decisions in this case may require small or no financial commitments that involve social or psychological implications. Consumers may already established criteria for evaluating products, services, or brands within the choice category.

It is unlikely that the consumers will search for information and rigorously evaluate each available alternative. Situational factors also influence risk perception. One situational variable is the nature of the task. For example, voluntary risks are more acceptable to people than involuntary risks. When consumers choose to buy the health supplements to increase their energy, they are taking a voluntary risk.

When they were made to go to a function reluctantly and require buying a formal dress for it, they are taking an involuntary risk. For voluntary activities, consumers systematically perceive less risk than what actually exists, while for involuntary activities, they tend to overrate the risk. Another situational variable that influences risk perception is how the purchase is to be made. For example, most consumers perceive that there is a greater risk in shopping through the mail for formal clothing than buying it in a retail store. The amount of arousal a person feels influences the capacity of their short-term memory. In high involvement situations consumers are usually more aroused and more attentive, which expands their short-term memory capacity to its maximal extent. In low involvement conditions, the arousal level is apt to be low, so consumers focus relatively little memory capacity on the stimulus. (Mowen & Minor, 1998, p.101).

As involvement levels increases, consumers may allocate more capacity to a stimulus. 4.0 Buyer Decision Making Processes The following part of the report compares the different decision making processes with respect to health supplements and formal clothing. The consumer’s buying decision-making process involves five stages. They are: Problem Recognition Information Search Evaluation of Alternatives Purchase Decision Post Purchase Evaluation 4.1 Problem Recognition Problem recognition is the first stage in the whole consumer decision-making process. Problems arise for consumers in their attempts to develop, maintain, and/or change their lifestyle.

The recognitions of a problem occur where there is a discrepancy between a consumer’s desire and the actual state that is sufficient to arouse and activate the decision process. (Neal, Quester & Hawkins, 2000, p.3.6). A growing recognition of a need or want can be satisfied through some sort of consumption. However, a consumer might not take any further movement towards their own decision-making – information search, because there is also some relative importance of the problem may be perceived to be small. The level of a person’s desire to resolve a particular problem depends on two factors: 1.

The extent of the discrepancy between the desired and actual states. 2. The relative importance of the problem. Desired state Many factors can affect a consumer’s lifestyle and desire. Culture and Social Class Culture and social class provide broad boundaries for lifestyle and therefore describe appropriate desire state.

Students in nowadays are more and more aware of their health, and this is caused by its relationship to their lifestyle. They are beginning to join the gyms and fitting physical activities into their leisure time. For many students it is an attempt to get fit and ward off illness. And by simply swallowing a tablet or two of health supplements, it can help people from fighting almost anything from the common cold to memory loss. Reference Groups Reference groups exert a major influence on a consumer’s lifestyle, and change in reference groups is likely to alter that likely to alter that lifestyle – which can, in turn affect desires.

(Neal, Quester & Hawkins, 2000, p.3.9). For students going to work in a business environment, the differences in clothing and behaviour from those they were previously used to was quickly influenced by the people in their working environment. And students may discover many discrepancies between the ways they used to dress in schools/universities is different to the people working in their business environment. Therefore their desired state will change, and they will develop a need for formal clothing, briefcases, and shoes that would have been inappropriate in the school/universities environment. Previous Decisions Previous decisions can also affect problem recognition. The decision made by students to go to a ball may trigger a need for formal clothing. The decision to go for a job interview may also lead to a desire for formal clothing.

Individual Development Students may feel the desire to purchase the health supplements as they go through their individual development of getting older, therefore their need and lifestyle may change. They may feel that they don’t have so much energy to do exercises or to stay up late studying as they used to be when they are younger. Therefore this may also lead to their desired to purchase energy boost supplements. As individuals go through changes in their development, their desire for clothing may change. For student as when they were in their teens, they might desire casual clothing, but as they grown to over 20 years of age, their desire for taste in clothing may change to more formal clothing. This change may also developed from their associating with their reference groups, income etc.

Emotions Emotions can also influence the students’ desired state. For example, they may feel tired easily or feeling sick all the time. Therefore this has triggered them to the problem recognition to seek help from health supplements to help them fee better. Current Situation The individual’s current situation can strongly influences the desired condition. For example, during cold weather, many people may start to take heath supplements pills because they want to keep away the illnesses especially in winter that’s when most people gets cold.

Actual State Normal Depletion The need for health supplements is like a routing problem of depletion for some students. These may arise when their frequently used health supplements are used up and need to be replaced. With problems like this type, the condition of depletion is easily recognized and is resolved with a purchase. Individual Development The normal processes of individual development may alter perceptions of the existing state. As students grow older, many will experience some complexion problems like weight problems, memory loss, loss of energy and some other physical problems may arise. Mental development may lead to dissatisfaction with existing clothing the students have.

As their grown mature, they may feel dissatisfied with the current wardrobe of clothing they have. Formal Clothing The decision to purchase formal clothing is one that involves extended decision-making. This type of decision is one in which the consumer evaluates alternatives in a detailed and comprehensive manner. More information is gathered and more brands are evaluated than other types of decision-making situations. Such a process is most likely for: High priced products Complex products (computers, stereos) Specialty goods (sports equipments, furniture) Products associated with performance risks (medical products, cars) Products associated with a persons ego (clothing, cosmetics) Obviously, formal clothing fits into this model and therefore can be said as a complex decision. A complex decision is said to induce a high involvement purchase level.

Formal clothing purchases are closely tied to the consumer’s ego and self-image. Because purchasing of formal clothing for students involves some form of financial risk, therefore they require extensive information to assist them to make the right decision, and evaluate the selection criteria carefully. The interview findings shows that the most common reason for developing a desire to purchase formal clothing were brought about by a formal function such as a ball, a wedding, parties etc. Three out of the four respondents said that the problem arose because they want to look good for a particular function, in other word, they want to improve their social status. The need to strive to reach one’s desired social status is influenced by their peers. It involves aspects such as acceptance, self-esteem and self-fulfilment.

In fact, many of the third, fourth and fifth levels of the ‘Hierarchy of Motives’ developed by Abraham Maslow apply to the problem recognition stage of the formal clothing decision process. Health Supplements The desire for health supplements can be cause by many factors as discussed above. And the consumers are easy to recognize this kind of need. And if the desired state obviously exceeds their actual states, then the problem is recognized and a search for a decision is initiated. As mentioned above, the level of purchase involvement for health supplements is low or maybe in the middle.

Therefore it the purchasing process for consumers could be either habitual decision-making or limited decision-making depending on the individuals. If a student notice that his or her health supplements is nearly empty, this will cause he/she to purchase some of the same health supplements during his or her next shopping. Moreover, because there are two distinct categories involved in the habitual decision – brand loyal decisions and repeat purchases, consumers will go two different directions while making decisions. If a student have a strong brand loyalty for Healtheries’ products because its product meets his or her needs, therefore it will be hard for them to change to Blackmore or other brand of health supplements. In contrast, a student may believe that all health supplements are about the same, and may not attach much importance to the purchase.

For some other consumers, their purchasing process for health supplement may be limited decision making. For example, a consumer may used a decision rule – buy the cheapest brand of vitamins. So next time when they realised they have run out of their vitamins, vitamin prices will be checked during the next visit to the store and the cheapest brand will be selected. A low involvement purchase is one where the consumer does not consider the product significantly important to his or her belief system and does not strongly identify with the product. Students are more involved in purchase of formal clothing because it is important to them and it involves significant financial, social and psychological risks.

In comparison, fast food involves little or no risk and is therefore deemed unimportant. Problem recognition regarding health supplements can often be dependent on other aspects of the consumers’ lifestyle. For example, a problem can be recognised if the student has been working late doing his or her studying and need to boost their energy with energy supplements. As a result, a need is recognised and an intention to buy is formed. 4.2 Information Search Consumers search information in order to make appropriate decisions that would meet the best of their interests. The extent of the information search that consumers involved are depended on factors such as the degree of understanding about the product, the level of purchase involvement, and the complexity of the product’s decision process.

If the purchase involvement is low, which required limited information search, internal information search is only needed. But if the purchase involvement is high, which required additional search, it would need both internal and external search. (Neal, Quester & Hawkins, 2000, p.4.4). Formal Clothing The purchase involvement for formal clothing is high for students; therefore students are more likely to engage in heavy amounts of external search of information. But first they will start with the information search with an internal search first as students may have preferences on what they like in terms of style and colour of the formal clothing.

The internal search may also base on their previous personal experiences in purchasing of the formal clothing. They will recall the things they know about formal clothing like where to buy them from, the price range for each shops etc. After the internal information being sought, they will then carry on to external search. The amount of external information search is different for individuals. Students are more likely to ask their reference groups opinions first such as their friends and family.

And they are more likely to visit more stores for formal clothing compared to small number of stores visited for health supplements. That is because the perceived risk associated with formal clothing is high. Formal clothing is considered quite a high price product for students. Therefore they need to consider the factors such social and psychological risk like will this formal clothing make them look good? Financial risk like if they spend the money on the expensive formal clothing then they will have to give up on some other things they would also like to buy. With many stores offering formal clothing, it is quite hard when it comes to a decision for many students.

As the greater the number of alternative stores, the more external search is more likely needed. Price is also a major factor in external search for students. Students are more sensitive to price and that is because they have limited income sources. Therefore external search to compare the prices for formal clothing between the stores is likely to be more intensive than products like health supplements. The gender of the shopper is also another factor affecting information search. It is said that females tend to engage in more external search than male does.

And this is true in the case of formal clothing interviews. Two males interviewed consider not spending too much time when shopping for their formal clothing. Female tend to like shopping for clothes than males does, therefore females tend to engage in longer external search than males. Situation variables can have a major impact on search behaviour. If there is a sale at a in a store for formal clothing, the information search is likely to reduce due the to the time frame of sale periods. Shoppers with limited physical or emotional energy (antecedent state) will search for less information than oth …