Internal and External Factors Affecting Consumer Behavior - Coursework Example

Name Unit Class Table of Contents Table of Contents 2 Introduction 2 Case overview 3 External factors 3 Group influence 3 Culture 4 Family 4 Social class 5 Internal factors 6 Perception 6 Learning 7 Motivation 7 Personality & Attitude 8 Conclusion 8 References 9 Introduction Consumer behavior is described as the study of the mental and physical processes that the consumers use to buy, consume and dispose goods and services and its effect on the market and buyers (Ramachandran, 2009). Consumer behavior is a very vital concept for the marketers as they are able to determine how to carry out their marketing activities (Malhotra & Birks, 2007). For the consumers to make a purchase, they have to undergo a decision making process. The steps that are involved in the decision making process are; identifying the problem, looking for information, searching on alternatives and finally come to the decision. The process of decision making is affected by internal and external factors. According to Blythe (2013), internal factors are; perception, Learning, Motivation, Personality & Attitude while external factors include; Group Influence, Culture, family and social class. This report will look at both internal and external factors affecting consumer behavior based on a real life case of my parents’ decision to buy a house. Case overview My parents have recently purchased a family home. This was a decision that took the family a long time before coming to the final conclusion. The home was worth a lot of cash and hence required a lot of reasoning as a family. I involved my family while doing the research so as to get first hand information on the consumer behavior and decision making. External factors Group influence This is the group whose the consumer tries to identify with. The group is associated with the consumer current behavior and feelings (Ramachandran, 2009). Reference groups are mostly influential to the young consumers as they act depending on the group they identify with. Reference groups are categorized into three influential forms. The three influential forms are; normative, informational and identification. Normative form influences the consumer when they act in order to gain a reward. The reward can be inform of approval or improved level of esteem. Informational form influences the consumers in situations where they are in a difficult situation to choose a product. This occurs where the consumer follows the advice of the reference group. Identification form affects individuals when they want to satisfy their needs based on the group values and norms (Hansen, 2003). As for my parents, their decision was influenced partly by the information form. This is due to fact that they failed to buy the house near a certain neighborhood as their friends claimed it to be too unsafe. This made them to avoid the area without even assessing it. Culture Culture includes knowledge, art, law, customs and morals that are practiced by people as members of a certain society. According to Hansen (2003), culture is able to influence our values and attitudes. Every culture has its norms and breaking them may lead to disapproval and banishment. Culture is also learned as people grow up through observing others and leaning in the society. Culture is comprehensive as it has the ability to i8nflucne everything in a person. This means it can influence thoughts, feeling and the way we behave (Jobanputra, 2009). Cultural influence also played part in my parent’s decision making. This was evidenced by their choice of location. They choose a neighborhood where they perceived that the family would be able to live without bad influences and will be able to acquire the desired values from those around. Family Over the years, definition of family has changed. Family configuration has changed and has led to households (Hansen, 2003). Traditionally, a family consisted of parents and children or extended family which included the grandparents. In order to cater for the evolving family, marketers have to understand the family life cycle. Family members buy for themselves as well as for other members. Jobanputra (2009) asserts that family decision making is the process in which the family members go through as they make their purchase decision. Family members play different roles during the process of making the purchase (Ramachandran, 2009). In case of my family, both parents engaged in consultation while making the decision. My mother main role was looking for the best neighborhood while my father assisted in making financial arrangement. Every member in a family has a role to play in making a decision. There are roles such as initiator, decider and the purchaser (Culiberg, 2009). The model of decision making depends on the type of family involved. For traditional family, man is dominant. My family being a modern family had both parents sharing roles in making the purchase. Social class This refers to a group of people in a society who shares the same values, behaviors and interests (Ramachandran, 2009). The classes are hierarchical, ordered according to the dimensions that the society values. Each social class has the attached expectations in their lifestyle by the society and have attached honor which can be positive or negative. The determinants in the social classes are income, profession and wealth. People in a similar class are able to socialize and prefers when they are surrounded by people of similar values (Ramachandran, 2009). Values in a social class determine how people are expected to behave. This acts to identify one with the social class which they belong. Social classes fall in two main groups: affluent and non affluent (Ramachandran, 2009). My family social class determined the purchase decision. This is due to fact that there are expected ways in which we are expected to live by the society depending on our social status. Internal factors Perception This is how an individual interprets the information after organizing it to come up with the mental picture (Solomon et. al, 2006). Consumer has to process a lot of information about a product before they make a decision to purchase. Consumer can apply three types of perceptions in making the decision since it’s hard to process all the information available. The three types of perception defenses are; selective attention, selective perception and selective retention (Ramachandran, 2009). Selective attention is where consumers select what they perceive is best for them and leave the rest. Selective perception involves where the information is given a personal meaning while selective retention refers to a situation where the consumers cannot remembers all they have been able to hear. According to my parent’s case, perceptions played a part in coming to the final decision (Almeida, 2012). It was impossible to retain all the information that was provided by the marketers on housing. This led to selective attention and selective perception in decision making. It’s important to know misperception can occur if the consumers are given the wrong information about a product. This did not happen during the house purchase. Learning This is a process in which the consumer memory and behavior changes due to information processing which can occur consciously or non-consciously. The marketers are supposed to have information on what the consumers know and what they don’t know. This can help a consumer to understand how a product works and make a purchase. Learning can take place in two forms: high involvement and low involvement. In high involvement, the consumer is encouraged to learn while in low involvement, the consumer does not have a drive to learn (Kotler & Keller, 2009). Having product knowledge is very vital for the consumers. For my parents, they were well informed in purchasing a home. This is due to fact that they had learned through previous purchases. This helped them in making an informed decision. Uninformed consumers can lead to negative consequences to the firm (Noel, 2009). Motivation This is an internal force that compels the consumer to have a behavioral response and act toward the response. The strength of the drive determines the consumer behavior response. Motivation can be explained well using the Maslow’s theory (Jobanputra, 2009). This is the theory that postulates what motivates people to fulfill their needs. According to the theory, people starts by satisfying basic needs being gaining motivation to meet other needs. The motive is gained through interaction and genetics. The needs are ranked in hierarchy. The hierarchy starts at bottom with: psychological needs, safety needs, social needs, esteem needs and self actualization needs at the top (Noel, 2009). For my family purchase of a house, it can be classified as a psychological need. This is due to fact that home is fundamental for survival. Personality & Attitude Personality involves the internal characteristics and traits that are exhibited by the consumers. Attitude is favorable orientation of a consumer towards a product or service (Kotler & Keller, 2009). The two concepts have effect on the consumer decision making process. Attitude consists of three main components: cognitive, behavioral and affective (Noel, 2009). Personal knowledge and beliefs about a product or service is under the cognitive component. The feeling about a good or service is placed under the affective component while the behavioral tendencies are under the behavioral component (Noel, 2009). The cognitive component played part in purchase of the house. This is due to fact that my parents believed that a certain geographical area had better homes which made them to purchase there. Conclusion The report has looked at the consumer buying behavior using a real life example of purchasing a house. The consumer making such a critical decision have to go through a decision making process before coming to final decision. The process of making decision is affected by both internal and external factors. The internal factors in purchasing a house according to report are; include; perception, learning, motivation, personality & attitude. The external factors are; group influence, culture, social class and family. Each of these factors plays a part in the final decision that is made. References Almeida, F. 2012, A psychological-institutional approach to consumers' decision making. Frankfurt am Main, Peter Lang. Blythe, J. 2013, Consumer behaviour. Los Angeles, Calif. London, SAGE. Culiberg, B. 2009, ‘What makes a good consumer?: Discovering consumer ethical decision making’, Global Management, 1(5)405-409. Hansen, T. 2003, Consumer decision making: a research note. London. Jobanputra, K. H. 2009, Global marketing and consumer decision making, Jaipur, India, Paradise Publishers. Kotler, P. & Keller, K.L 2009, Marketing Management, (13th ed), New Jersey, Pearson/Prentice- Hall Malhotra, N & Birks, D 2007, Marketing Research: An Applied Approach (3rd ed.). Essex, Prentice Hall. Noel, H 2009, Consumer behavior, Lausanne, Switzerland, AVA Academia. Ramachandran, R 2009, Consumer behavior, New Delhi, India, Anmol Publications. Solomon, M., Bamossy, G., Askegaard, S. & Hogg, M 2006, Consumer Behaviour: A European Perspective, 3rd ed. Harlow, Prentice Hall. Read More