Qualification - Higher National Diploma in Business
Unit Name - Consumer Behaviour and Insight
Unit Number - Unit 37
Assignment Title - Consumer Behaviour Report
Learning Outcome 1: Demonstrate the ability to map a path to purchase in a given category, including the decision -making process.
Learning Outcome 2: Evaluate appropriate forms of research to understand influences on the decision -making process (B2C and B2B)
Learning Outcome 3: Evaluate how marketers influence the different stages of the decision -making process (B2C and B2B)
You must focus on understanding consumer behavior relating to a particular product or service of your chosen company or brand. For example, you may want to consider some of the following questions: What are the pre -purchase, purchase, or post -purchase processes for c onsumers? What are the most relevant external influences on these processes? What can the companies learn from these processes and how can they influence them? How should the companies change their marketing strategies to improve image and product positioning, the acquisition process for consu mers, to enhance consumer experience with the product, and influence consumer satisfaction and loyalty?
The customer behavior is considered the study of buyers and how they behave, choose, and utilize the goods as well as the services while deciding to buy them that fulfill their needs. The study of buying behaviors of the consumers is most significant for the marketers since they could understand the expectations of the buyers. It assists in understanding what makes the consumers for buying the products or services. It is vital to consider the type of goods or services liked by the buyers so that the marketers could launch them in the markets. The marketers could recognize the likes as well as dislikes of the buyers and design the base of their marketing strategies on the basis of the findings. The paper will demonstrate the behavior of the consumers related to the sports shoes of Nike. It will also analyze various types of market research to know the impacts on the decision-making method in B2C and B2B contexts. It will also examine different methods to research process and market research to know the decision-making method within both B2C as well as B2B contexts.
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Demonstration of the Ability of Mapping a Path for Purchasing a Specified Category, Comprising of the Decision-Making Method
1. Explain and analyse the stages of the consumer decision -making journey for your chosen product/service. Explain why it is important for marketers to map a path to purchase.
Solution: The product chosen is the sports shoes of Nike which has high demands among the customers.
Model of Customer Decision-Making
The consumer decision process (CDP) model is significant to make decisions. This model has five stages through which the buyers go through before, during, as well as after purchasing the goods or services in decision-making methods (Panwar et al., 2019). The first phase begins with need recognition, the consumers recognize what their requirement amidst existing motivation condition and desired motivation condition. For instance, a buyer might see an advertisement for the sports shoes of Nike that stimulated him that he needs those shoes. The buyer might have to move across the phase gradually in every buying. But, in the regular purchase, the buyer could avoid the second and third phases of and go directly to buying decisions.
The second phase of the model is information search, where the buyers could look for information as stated by inner or outer information sources. Inner information sources are the data gained from recall and that might be on the basis of the articles read earlier past experiences, or past conversations (Mandel et al., 2017). Outer information sources could be from friends, salesperson, ads, family, websites, media articles as well as leaflets. The marketers can recognize the most influential target marketplaces and the impacts of these information sources rely on the goods and consumers. For instance, a buyer wants to purchase the sports shoes of Nike and before he purchases, he would take suggestions from his friends about their experiences on other shoe brands and find out data about the quality of the sports shoes of Nike and other shoe brands and then compare them.
The next phase of the model is an analysis of alternatives, where the customers evaluate alternative with the choice set with the help of the searched information. The analysis is a significant factor in the degree where the consumers feel engaged with the product. By engagement, it implies the degree of perceived consequence and significance that go with their individual choices. The engagement has groups into low- engagement purchases as well as high engagement purchases. Low-engagement purchases imply having low expenditures in the analysis method. High engagement purchases are generally branded products and comprise of high expenditures or individual risks. The sports shoes of Nike are high-involvement purchases since it is a branded product and in comparison with other shoe brands, Nike is much more costly than other brands.
The fourth phase of the model is the purchase decision, the phase that the buyers actually purchase the products (Vargas, 2019). For instance, after reading the ads on the sports shoes of Nike, the buyer consider to purchase the product for fulfilling his need. The purchasing decision might happen instantly or within a few days or weeks. Nike might require to attribute the product by comparing with the competitors with their individual benefits and sampling or trialing the product to increase the sales of the sports shoes.
The last phase of the model is post-purchase behavior, after buyers buy and use the products, the buyers would make comparison with other brands with hope on their past experiences either the products are satisfying them or not. The concept of cognitive dissonance commonly takes place when the buyer's concerns after deciding to buy (Kanagal, 2016). It implies that the consumers purchase the new product by preferring over the product already used or using and they might not repurchase it and switch to other brands. For instance, before buying the sports shoes of Nike, he might be wearing Adidas shoes. After buying, he might feel that the sports shoes of Nike are of good quality and more comfortable and therefore he might not repurchase shoes of Adidas and change his mind to buy Nike shoes. The consumers two bought the product must be motivated that their decision-making is correct to repurchase the product and convince them to change their minds for choosing other brands. For instance, a buyer purchased the sports shoes of Nike and after wearing them, he felt that these shoes are of good quality and more comfortable than shoes of other brands. In future buying decisions, he would repurchase the sports shoes of Nike since it satisfied his needs.
Consumer Decision Journey
Pre-purchase - In this stage, the buyers will compare and analyze information sources as well as alternatives before acquiring the sports shoes.
Purchase - In this stage, the buyers will actually purchase the products for fulfilling his need. The purchasing decision might happen instantly or within a few days or weeks.
Receive - In this stage, the buyer will buy and get the sports shoes of Nike (Sharma, Joshi and Wali, 2020).
Post-purchase - In this stage, after buyers buy the products and used, the buyers would make comparsion them with other brands with hope depending on their past experiences either the products are satisfying them or not.
Levels of Customer Decision-Making
Extensive Problem-Solving - In this level, the consumers have no fixed criteria to evaluate the sports shoes of Nike (Putra and Ningrum, 2019). They seek for more information forsetting a criteria for making decision to buy the product based on particular brands.
Limited Problem-Solving - In this level, the buyers already has the criteria to evaluate the sports shoes of Nike. But, they has not completely fixed the recognized preferences and go on searching for extra information for distinguishing among other shoe brands.
Routine Response Behavior - In this level, buyers have experiences with the product and they have fixed benchmarks for evaluating the sports shoes of Nike which they are preferring. In some circumstances, they might want to gather little extra information, whereas in other circumstances, they might simply assess what they are conscious about (Buerke et al., 2017).
Four Opinions of Customer Decision-Making
Economic - In this view, it is assumed that the buyers usually could make rational decisions, since it is assumed that they are conscious of alternatives exist in the markets, they can competently rank the product according to their advantages and they know the best alternative suitable according to their needs.
Passive - In this view, it is assumedthat the buyers are irrational as well as impulsive while making decision to buy the product. However, they also look for more information about the available alternatives and make rational decisions and buy the product that offers them the utmost satisfaction.
Emotional - In this view, it is assumed that the buyersare connected with deep emotions or feelings like love, fear and hope. These feelings are probably highly engaging.
Cognitive - In this view, it is assumed that the buyers are focused on the procedures through which they could acquire data about the product. Within the cognitive view framework, the buyers very actively explores for product which could satisfy all their needs.
Factors Influencing Decision-Making
Impact of Heuristics on Decision-Making - The customers use heuristics that is the emotions to make decisions before buying the product and so it can be said that decisions of the buyers are greatly impacted by their existing heuristics or emotions (Ruswanti, Herlambang and Januarko, 2016).
Impacts of Marketing Mix Components on Decision-Making - The buyers are greatly impacted by the elements of the marketing mix,namely product, price, place as well as promotion impact the decisions of the customers for purchasing the product. The buyers consider the price, brand, quality and marketing factors of the product before buying it.
Impact of New Technologies - The emergence of new technologies such as online transactions and buying, e-tailing, the growth of C2C buying and eBaymakes information easily available to buyers and help in making decision quickly. Technology also makes it easier for customers trust on the brand and how much they like it for deciding to buy it or not.
Question: Evaluate how marketers of your organisation are responding to the decision -making process, applying relevant concepts and models.
Model for Organizational Decision-Making
Rational Decision-Making Model
This model is based on the concept of choice which will increase the values as well as profits of the company. As stated by this model, a rationale process is followed by consumers while making decisions (Murphy and Dweck, 2016). This model has several steps which are as follows:
Identifying the Problem - After evaluating the market reports, the marketers of Nike find out that the sports shoes of Nike are most sought after products of the buyers.
Generating Resolutions and Alternatives - They would focus on promoting the sports shoes of Nike through social media. The alternative solution can be to promote the product on TV, and through billboards and leaflets.
Selecting the Best Alternative - They might promote the sports shoes of Nike through social media since most of the customers prefer social media to get information on their preferred product.
Implementing the Desired Resolution - A proper social media marketing strategy would be implemented and tested that if it is successful or not (Godey et al., 2016). If it is successful, then it is the most rational decision of the marketers of Nike. If it is not successful, then they would come with another solution.
Question : Compare and contrast the key differences of the contexts of B2C and B2B, by specific examples.
Differences between B2C and B2B Decision-Making Methods
B2B focus on logical process-driven buying decisions and within the decision-making method of B2B, it starts with rational and emotional decisions. Communication is more open between businesses for determining if it is appropriate for both parties or not. During the decision-making method, the buyers analyze the companies or the needs of their individual workers. These needs are divided into emotional and rational motivations. Understanding the customers help to know the decision-making method that might apply to the B2B (Berens, Kolb and Haase, 2019). For example -If a buying agent for Netflix purchases precisely the similar computer for Netflix writer, it is regarded a business good. The reason is that since Netflix is a business, so the computer would be utilized within a corporate atmosphere.
On the other hand, B2C focus on emotion-driven buying decisions, and in the decision-making procedure of B2C, it starts to utilize their expertise within the conversion funnel for maximizing ROI (Atamer, 2020). After the customers identify the needs, they have a strong knowledge of what type of products they are seeking to purchase. Unlike B2B buyers, the customers of B2C are much more flexible while searching for a particular product to purchase. Until the consumers made a strong decision for buying the products, often they explore the competitors for seeing if they could acquire the same products more rapidly and for better deals.
Differences between B2Band B2C Market Research
Skill Set- The market research of B2B needs a different skill set at each level of responsibility, from the research directors to the telephone interviewers. Without a doubt, one of the major areas of achievement of numerous B2B researches is the expertise as well as the skillset of the telephone interviewers. The skills needed in this research are industry-specific experience, knowledge, and the capability to communicate technical data compellingly. In contrast, the market research of B2C needs the skill set of the sales and marketing professionals for promoting and selling products or services to the customers (Mingione and Leoni, 2020). The skills needed in this research are knowledge of brand development, as well as the communication skills for expressing the brand values in jargon-free and simple terms all through the marketing channels.
Sample Sizes - The B2B markets have a sample size of a smaller population of potential participants in comparison to the B2C markets (Dotzel and Shankar, 2019). In B2C market research, there is usually one decision maker while within B2B market research there is a whole decision-making group that impacts insights and buying of the services or goods.
Research Methodology - In B2B market research, the research methodology is either completely quantitative or completely qualitative. In contrast, in B2C market research, the research methodologies are mixed methodological approaches, either at various phases of the projects or combined in a similar survey tool.
Tele-depth Interviews - These interviews are more significant and also works better in the market research of B2B in comparison to the market research of B2C.
Pareto Principle - This principle is something that is more significant in B2B market research in comparison to B2C market research with 80% revenues and 20% customers. Whereas, the Pareto principle in B2C implies 20% revenues and 80% customers.
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Question: Evaluate the different approa ches to market research and methods of research used for understanding the decision making process in both B2C and B2B.
Impacts on the Decision-Making Method
Personality - The personality of the buyers within both B2C and B2B contexts immensely impact the decision-making methods. The decisions of the consumers are significantly influenced by the personality traits as well as the knowledge of the customers in both the contexts, since the personality of the buyers that one-of-a-kind youness updates every decision made by them. Since in B2C, the customers make purchasing decisions based on their emotions, they put emotions on their decision-making, and their personality impacts the ways they choose the goods or services (Achar et al., 2016). On the other hand, since in B2B, the buyers are less emotional in their buying decisions the customers make buying decisions on the basis of their logic, they put logic on their decision-making and their personality impacts the ways they choose the goods or services.
Motivation - Within both B2B and B2C contexts, the motivation of the buyers has a substantial and positive influence on buying decisions of the customers. It affects them in their purchases since it is based on the evaluation of the quality necessary to use the products. The buyers of B2C are motivated emotionally to make their decisions to buy the goods or services. On the contrary, the consumers of B2B are motivated logically to make their decisions to purchase the goods or services.
Measurement of Consumer Learning
Recognition and Recall - Both are significant in the purchasing decisions of the buyers since the capability of the buyers to recall and recognize the goods or services are crucial to their buying decisions of the customers. The buyers of B2C emotionally recall and recognize the goods or services before making their decisions to buy them. In contrast, the consumers of B2B logically recall and recognize the goods or services before deciding to purchase the goods or services (Österle, Kuhn and Henseler, 2018).
Attitudinal and Behavioral - Different buyers have different attitudes as well as behaviors. The buyers of B2C are emotional while deciding and buying the goods or services. On the other hand, the consumers of B2B are logical when they decide and purchase the goods or services.
Consumer Perception Aspects
Dynamics - The buyers of B2B are more dynamic while purchasing goods or services and making their decisions to buy them. In contrast, the consumers of B2C are less dynamic than the goods or services before deciding to purchase the goods or services.
Imagery - The buyers of B2C use emotions to express perceived images about services, products, and prices, quality of the products, manufacturers as well as retail stores while deciding and buying the goods or services. On the other hand, the consumers of B2B thinks logically regarding the goods, services, quality, and prices before deciding to purchase the goods or services.
Risk - The customers of both B2B along with B2C perceives the risks associated with the goods or services such as hesitation and adverse outcomes of purchasing goods or services before deciding to purchase the goods or services. This incorporates the future quality of the products or services to the point of buying.
Question: Evaluation of Impact of Different Factors on Decision-Making and Buying Behavior with Examples
Solution: Influence of Culture and Sub-Culture on Consumer Behavior
It has been found that culture and sub-culture are specifically significant in buyer purchasing behavior. Cultures and sub-cultures vary in values, language, demographics along with non-verbal communication. Because of these differences, buyer behavior transformed radically all through cultures and sub-cultures. Cultures and sub-cultures vary in language, demographics, values and non-verbal communication. Because of these differences, customer behavior changed radically all through cultures and and sub-cultures and impacts the way buyers make decisions, and how buyers perceive the world around them (Honarmandi, Sepasi and Azar, 2019). The culture and sub-culture functions mostly by setting limitations for buyer behaviors and by persuading the working of each institution. These limitations establish behaviors that are known as norms, which are only rules that stipulate or forbid particular behaviors in particular circumstances.
The norms are derived from cultural values and widely-held views that confirm what is not necessary. The norms and related approvals are raised by the cultural values to which further impact consumption patterns. The culture and sub-culture set boundaries within which most buyers feel, act, and think in a way consistent with other buyers of the same culture since it appears to be natural or right things to do. The buyer behaviors differ since cultural and subcultural values inherited by buyers vary from culture to culture and sub-culture to sub-culture (Majerova and Kubjatkova, 2020). It has been found that buyers from cultures and sub-cultures that vary on values also vary in their response to advertising, products, and desired sources of information that direct buyer behavior. For example, Chinese culture individuals are not inclined to buy technological products, and Catholic cultures individuals are more inclined to purchase religious artifacts.
Patterns of Buyer Behavior
The purchasing behavior of the buyers is mostly governed by the tastes, needs, as well as preferences of the buyers for whom the products or services are eventually bought. Several patterns impact the purchasing behavior of the buyers:
Location or Place of Purchase - Several buyers prefer to buy their favorite products by visiting different stores in various locations to compare the offers and the prices. Therefore, a buyer does not continue to be loyal to a particular store for a longer period (Oke et al., 2016). The retail stores must pay a lot of significance to the location of the stores, recognizing the distributors in the closer locality and even the ready accessibility of products and the nature of the merchandise.
Types of Products to be Bought and Quantity of Buying - It basically indicates an evaluation of the types of products that the customers would want to buy and in how much quantity. It would be on the basis of some factors which are given below:
• Purchasing capacity of the buyers
• Durability or perishability of the products
• Availability of the product varieties
• Consumer needs of the products
Roles of Opinion Leaders to Influence Purchasing Decisions
The opinion leaders play their role when individuals look for products for purchasing, using and evaluating before they purchase or discard goods as well as services wherein they expectations would fulfill their needs and desires. The decision-making method of the buyers impact the acceptance of the consumers by the opinion leaders who are regarded as the first individual who impacts the second individual by giving their opinions on the products byimplementing the word of mouth strategy (Mehta and Dixit, 2016). Individuals who try to find new goods and look for information are known as the opinion seekers. The opinion leaders provide both proper information and advice when they tell the adult decision-makers that they could buy higher quality products. For instance, saving the clothes and lasting then long in the latest washing machines.
The marketers use opinion leaders in their marketing techniques strategies for reaching buyers within a short time for building consumer relationships and retaining consumer loyalty. The opinion leaders play an extremely vital role in buyer decision-making method by motivating communication among buyers within the consumption procedure, where the option to buy something is the contribution and setting up consumption sets. Then the style of consumption is based on the experiences and perspectives of the customers and that depends on their emotions and moods. The opinion leaderswould again pay attention on the category and quality of the products and the decision-makers, the buyers will seek their advice and might end up with post-purchase if the buyers perceive the advertisements differently or perceive the information from the leaders wrongly. Hence, the opinion leaders helps in making good judgment to choose the products and decide to purchase them.
Question: Evaluation of how different factors influence decision -making and buying behaviour by specific examples.
Understanding Buyer Behavior by Organizations to Impact the Decision-Making Process within both a B2C and B2B Context
In B2C, the customers make buying decisions on the basis of their emotions and they depend more on comparison shopping and brand reputation. The consumers take their buying decisions individually and then purchase the products or services. The buyers look for deals and entertainment and seek entertaining and easily digestible marketing content. The customers often buy for immediate requirements.
On the other hand, in B2B, the buyers are less emotional in their buying decisions and need particular metrics as well as objectives to be met (Durakovic and Cosic, 2019). They identify a personal value in the products or services and end up buying them. The buyers involve interacting with numerous decision-makers within the organizations. The customers desire to perform and get credit for their successes and being satisfied by marketing and sales professionals who provide detailed specifications of the goods or services.
Use of Digital Audience Research Developments for Understanding and Impacting Consumer Behavior
The digital audience research developments help to research who the digital audiences are and what are their needs and demands. The research is carried on digitally and basically boils down to whatever that an individual does online. With the help of digital audience research developments, is easy to understand that digitization and the internet have changed the behaviors of the buyers and they are much more satisfied by doing online shopping and find it much safer than traditional shopping (Stephen, 2016). They also give the information that at present the buyers prefer online shopping since it provides them the opportunities to have a look at the information of the products provided by the companies and compare them accordingly so that they could enjoy the right to choose and place an order at any time at anyplace.
With the up-to-date technologies and growth in the usages of the internet, the interconnectivity of buyers is growing gradually, and consequently, the buyer behaviors are changing and the organizations must recognize the behavior of the consumers. The digital audience research developments analyze the influence of online shopping on buyer purchasing behavior and demonstrate that online shopping has positive impacts on buyer purchasing behavior and traditional shopping would be replaced by online shopping (Kooti et al., 2016). The digital audience research developments also give the information that the mindsets of the customers have evolved hugely currently. All this has been possible through digital marketing which has made it easier for the brands to reach the consumers.
The paper concluded with the discussion of different behaviors of the buyers and their impacts on the decision-making methods. The product chosen is the sports shoes of Nike which has high demands among the customers. The rational decision-making model and the consumer decision process (CDP) model has been chosen as models for decision-making. B2B focus on logical process-driven buying decisions and in the decision-making procedure of B2B, it starts with rational and emotional decisions. On the other hand, B2C focus on emotion-driven buying decisions, and in the decision-making procedure of B2C, it starts to utilize their expertise within the conversion funnel for maximizing ROI.
The opinion leaders play their role when individuals look for products for purchasing, using and evaluating before they purchase or discard goods as well as services wherein they expectations would fulfill their needs and desires. They provide both proper information and advice when they tell the adult decision-makers that they could buy higher quality products. In B2C, the customers make buying decisions on the basis of their emotions. On the other hand, in B2B, the buyers are less emotional in their buying decisions and need particular metrics as well as objectives to be met. The digital audience research developments help to research who the digital audiences are and what are their needs and demands and through them, it is easy to understand that digitization and the internet have changed the behaviors of the buyers and they are much more satisfied by doing online shopping and find it much safer than traditional shopping.
It is recommended to the marketers of Nike to collaborate with high-end brands as it could become an effective method of marketing for the Nike brand. They also needs to keep on updating with customer taste particularly in the unstable markets of the fashion industry. It is also suggested to Nike to grow its marketing activities and not focus on a specific market for increasing its brand awareness among the buyers. The marketers of the company can focus their attention on social media, since buyers like to engage with their preferred brand and it could be crucial in their decision-making method.