Consumer Behaviour and Consumer Attitudes - Term Paper Example

Consumer Behaviour: Consumer Attitudes Introduction Consumer behaviour refers to the study the processes used by people to select, secure, use and dispose products in order to satisfy their needs and the impact of these process on the consumer and the society (Becker-Olsen, Cudmore and Hill, 2006). Consumer attitudes refer to the beliefs, feelings and behavioural intentions toward a certain product or service within the context of marketing (Dennis, Merrilees, Jayawardhena and Wright, 2009). The three components of consumer attitudes are interdependent as shown in the diagram below and they represent forces, which influence how the consumer will react to a certain product. A consumer may hold both positive and negative beliefs toward a certain product (Hinds and Sparks, 2008). Furthermore, some consumer attitudes toward an object might be neutral while others might vary in valence based on the person or the situation. Sometimes the beliefs held by consumers might not be accurate (Belk, 2010). In addition, some consumer beliefs might be contradictory upon closer examination (Augusto, Ituassu and Rossi, 2007). The fact that there exists a variety of beliefs about a product it is often difficult to determine the overall belief. This is often solved by use of the Multiattribute (Fishbein) model, which summarizes the overall score of attitudes The affect component of consumer attitude is the feeling that consumers hold toward certain products or brands. Some of these feelings might be based on the belief even though some feelings are independent of beliefs (Lake, 2009). Behavioural intention refers to what the consumer plans to do with relation to the product, that is, buy or not buy (Becker-Olsen, Cudmore and Hill, 2006). Behavioural intention is also sometimes a logical result of beliefs or affect even though behavioural intention might sometimes be a reflection of other circumstances (Wright, 2006). How consumer attitudes are learned, stored and retrieved The Hierarchy of Effects Model provides a systematic way through which consumers learn stores and retrieves information about a product (Tyagi and Kumar, 2004). The model proposes that consumers become aware of, and learn about a brand, develop an attitude towards it, a desire to purchase it, which then leads to trial and adoption or rejection. The model consists of five steps through which a consumer goes through from initial exposure to a product to the purchase decision. The steps include awareness, knowledge, liking, preference, conviction and purchase. Awareness Most new products in the market need to create awareness among potential consumers (Augusto, Ituassu and Rossi, 2007). To create awareness the first thing is to expose the product to target market by creating physical contact with the brand (Solomon, 2010). For instance when Toyota Company was introducing Toyota Prius in the market it had to run marketing campaigns to create awareness about the product (Toyota, 2011). The features that were detailed in its advertisements included it being a hybrid car with high fuel efficiency and offering relatively lower prices to consumers as compared to other hybrid cars in the market (Dennis, Merrilees, Jayawardhena and Wright, 2009). Creation of awareness also involves attracting the attention of the consumers (Marin, Ruiz, and Rubio, 2009). Attention here refers to the extent to which consumers allocate mental activity to the processing of the brand stimulus. Consumer’s attention can be captured by several characteristics of brand stimuli such as personal relevance, attractiveness and humour, surprise and stimulus intensity (Becker-Olsen, Cudmore and Hill, 2006). The recent economic crisis and turbulent fuel prices were fundamental in the marketing of Toyota Prius to elicit personal relevance to consumers by positioning it as a fuel-efficient car that reduces expenditure on fuel. The environmentalists are often concerned about reducing carbon emission and as such, the introduction of Toyota Prius elicited emotions for conservation of the environment and was a way of environmentalists to help in attaining their goal of reducing carbon emissions (Toyota, 2011). The Toyota Company improved the body of its Prius car to be more attractive by making it aerodynamic and an underbody rear fin, which enables the car to stabilize at higher speeds (Hoyer and Macinnis, 2009). The car is also made attractive to environmentalists by having its body part made up of ecologically derived bioplastic, which are easily biodegradable unlike plastics derived from petroleum products (Augusto, Ituassu and Rossi, 2007). The car also has surprising features such as its ability to utilize 3.90L/100 km in urban setting making it the most eco-efficient car in the market. All these features are used in creating awareness about Toyota Prius in new markets and to new customers. Knowledge In some cases, consumers might be aware of the product but they do not have sufficient knowledge about the product. This stage allows marketers to create brand knowledge. This helps consumers to comprehend the brand name and what it stands for. This process involves detailing specific appeals and benefits of the product (Augusto, Ituassu and Rossi, 2007). This stage seeks to differentiate the product from other existing products in the market and to define target market (Hinds and Sparks, 2008). for instance in the case of Toyota Prius marketers can provide detailed information about how fuel efficient the car is and the relative lower pricing as compared to other hybrid cars such as that offered by Honda (Dennis, Merrilees, Jayawardhena and Wright, 2009). This is the stage where marketers can also define target market for Toyota Prius by for instance emphasizing its eco-friendly features such as low carbon emission and its body being made of bioplastics that are biodegradable (Toyota, 2011). These emphases will directly show that the target market for the car is the environmentally conscious consumer and consumers who are interested in cutting expenditures on fuel (Marin, Ruiz, and Rubio, 2009). Liking This refers to the feelings or perception of the consumers who already know the product. Perception is the process whereby consumers create meaning from physical sensations. The meaning that consumers assign to brand stimuli is determined by many variables including personality, perceptual set and social and cultural values (Becker-Olsen, Cudmore and Hill, 2006). This stage allows the marketers to know whether the audience looks unfavourably towards the product and for the marketer to find out why. For instance, the consumer perception for hybrid cars has generally been low. This has been attributed to availability of alternative high efficiency cars, which are low priced (Dennis, Merrilees, Jayawardhena and Wright, 2009). Based on this finding, Toyota created Toyota Prius, which is high fuel efficiency car and at the same time is relatively cheaper than other hybrid cars. This has seen many consumers adopt the car with the company reporting that it had sold over 1 million units of the car worldwide by September 2011 since its inception in 2009 (Toyota, 2011). Preference Even though a target market might like a certain brand, it might not prefer it to others (Hinds and Sparks, 2008). This requires the marketer to build consumer preference via promotion of quality, value, performance and other features. The consumer preference can be checked by comparing consumer preference prior to and after the marketing campaign (Augusto, Ituassu and Rossi, 2007). As mentioned above the preference for hybrid cars has been low since they were introduced in the market. However, Toyota has been able to successful increase preference for its Toyota Prius model through promoting features such as high fuel efficiency, biodegradability of the plastic used to create the car body parts and low carbon emission to the environment (Toyota, 2011). Conviction Even though consumers might prefer a particular product, they might still not develop a conviction to buy it. It is the role of the marketer to build conviction among the target audience (Chen, 2007). Consumers interpret all aspects of marketing activity according to the knowledge, meaning and beliefs that they have learned, stored in memory and can recall (Becker-Olsen, Cudmore and Hill, 2006). A variety of techniques are used to help consumers learn, store and retrieve brand and product information: jingles and catchy tag lines encourage immediate rehearsal; unique, vivid and highly visual imagery facilitates storage and re-call; repetition of stimuli from the advertisement at point-of –purchase can stimulate retrieval of learned information (Dennis, Merrilees, Jayawardhena and Wright, 2009). Toyota uses its Customer Relationship management software to market repetitively to its previous customers detailing the benefits of Toyota Prius (Toyota, 2011). This has seen the firm get increased repeat purchase from the firm with increased conviction to buy Toyota Prius. Purchase Even though some members of the target market might have the conviction, they might not get around buying the product. They might wait for more information or plan to cat later (Augusto, Ituassu and Rossi, 2007). The marketer can let such potential consumers purchase the product by offering the product at a low price, offering a premium or letting consumers try it out. This lets consumers search out for information and purchase (Marin, Ruiz, and Rubio, 2009). Toyota Prius has been targeting to increase number purchases among convicted consumers by offering discounts and other incentives such as cash backs (Toyota, 2011). Affectively based attitudes These are attitudes, which are based on feelings and values about an object. They are based on emotions. They are not based on facts but instead come from values of people, sensory reactions and aesthetic reactions (Hinds and Sparks, 2008). These attitudes come from several sources although they can be grouped into one category because they do not result from a rational examination of issues, are not governed by logic and are often linked to values of people. For instance, people who value environmental conservation might be develop affective attitude toward hybrid cars such as Toyota Prius (Toyota, 2011). Preferences for certain products are primarily affectively based behavioural phenomena. Evaluations or attitudes can also be created automatically by the affective system in the form of emotions, feelings and moods as a direct response to marketer controlled stimuli such as advertising or point-of-purchase displays. Cognitively based attitudes These are attitudes, which are based primarily on beliefs and properties about an object. Cognitive responses to the message determine attitude formation and change. Peripheral processes do not involve extensive cognitive processing of the arguments presented (Marin, Ruiz, and Rubio, 2009). Instead, attitude is based on environmental characteristics of the message such as attractiveness, credibility or a catchy slogan (Chan, 1999). It entails knowledge and perceptions that are acquired via a combination of direct experience with the attitude object and related information from various sources (Becker-Olsen, Cudmore and Hill, 2006). For instance, potential consumers of Toyota Prius may acquire such knowledge and perception by hearing from friends and family members who have bought such a car through word of mouth. If the perception is positive, such individuals might be prompted to acquire their own Toyota Prius. Attitude models Multi-attribute models This is the most influential model of attitude formation. This model examines the composition of consumer attitudes in terms of selected product attributes or beliefs. It has various types such as the attitude toward object model, the attitude toward behaviour model and the theory of reasoned action model. In this model attitude is a function of product specific beliefs and evaluations. The model is usually beneficial in measuring attitudes toward brands. It allows one to deduce that overall attitude towards a brand is shaped by the consumer’s evaluation of the beliefs about the brand’s attributes. In order to shape favourable attitudes advertisements are often used to communicate important information about the product’s attributes (Dennis, Merrilees, Jayawardhena and Wright, 2009). For instance in the case of Toyota Prius attributes such as fuel efficiency, low carbon emission and its eco-friendly are communicated via advertisements (Toyota, 2011). Positive attitudes toward brands help with brand extensions (Becker-Olsen, Cudmore and Hill, 2006). The model describes the attitude toward behaving or acting with respect to an object instead of the attitude toward the object itself. It corresponds closely to actual behaviour. The model has components such as cognitive, affective and conative. It in addition to attitude has subjective norms. This model measures attitude score by use of consumer’s beliefs and evaluations of the attributes of the attitude object. Various contexts in which attitude scores are measured exist. These include attitude toward the object model and attitude toward the behaviour model. The following equation summarises how attitudes are measured under this model. Aj = ∑BijIi Where i=attribute or product characteristic j=brand Such that: A=the consumers attitude score for brand j I=the importance weight given to attribute i by the consumer B=the consumer’s belief as to the extent to which a satisfactory level of attribute i is offered by brand j All attributes linked to a product based on consumers perception need to be included in the model to provide dimensionality. Various attributes about a product often have a varying importance. The importance weight of the formula allows importance of each attribute to be adjusted individually. Beliefs represent the extent to which each product offers satisfaction for the attribute in question. Thus in case of Toyota Prius the perception of the consumer about fuel efficiency, pricing, carbon emission and eco-friendliness of the car can be measured using this model (Toyota, 2011). This model is advantageous because it shows clearly what is important to consumers about a given product. For instance the attributes mentioned above about Toyota Prius can be evaluated individually to enable the company to emphasize on that particular attribute during advertisement (Becker-Olsen, Cudmore and Hill, 2006). This model is also beneficial since it shows how well brands do relative to each other. Thus Toyota Company can use this model to relate its hybrid brands such as Toyota Prius and Toyota Camry (Toyota, 2011). The model is also important because it shows how well a specific brand does with respect to attributes perceived as important to consumers (Hinds and Sparks, 2008). Thus in the case of Toyota Prius, attributes such as fuel efficiency, pricing, carbon emission and eco-friendliness can be evaluated using this model (Dennis, Merrilees, Jayawardhena and Wright, 2009). This model is however criticized for being a poor predictor of consumer behaviour and that the fact that other variables such as involvement, friends, family, financial resources and availability of product influence behaviour. Theory of reasoned action The Theory of Reasoned Action proposes that consumers will choose between alternatives following conscious consideration of which alternative leads to the most desirable consequences. For instance, Toyota Prius is a hybrid car and other alternative hybrid cars exist in the market such as Chevrolet Volt, the Nissan Leaf, Toyota Highlander and Toyota Camry (Toyota, 2011). Thus before a consumer chooses to buy Toyota Prius he/she will compare it to existing in the market and gets the most desirable features to buy (Pickett-Baker and Ozaki, 2008). The model asserts that behaviour results in certain outcomes and it involves the evaluation of the outcome (Marin, Ruiz, and Rubio, 2009). It also asserts that specific referents such as ‘I should or should not’ perform the behaviour. It also asserts that people buy certain products to comply with the specific referents (Dennis, Merrilees, Jayawardhena and Wright, 2009). For instance people might buy Toyota Prius in order to comply with referents such as reduction of carbon emissions. This model tries to compensate for the inability of multi-attribute model to predict behaviour. The model is summarized in the equation below: B~BI = Aact(w1) + SN(w2) Where: B = a specific behaviour BI = consumer’s intention to engage in that behaviour Aact = consumer’s attitude toward engaging in that behaviour SN = subjective norm regarding whether other people want the consumer to engage in that behaviour w1 & w2 = weights that reflect the relative influence of the Aact and SN components on BI Heuristic models In order to save time and effort consumers will sometimes use simplified decision-making rules known as “heuristics” (Becker-Olsen, Cudmore and Hill, 2006). Some heuristics frequently used in advertising are “length-implies-strength” where messages are filled with lots of facts and figures which indicate the product is of high quality; “consensus- implies- correctness” whereby majority opinion is usually considered to be valid. In essence it is highly desirable to define all holistic concepts, macroscopic factors and aggregate variables in terms of individual behaviour if this is possible (Marin, Ruiz, and Rubio, 2009). The role of attitude in the decision making process Rational perspective has been traditionally used in the study of consumer decision-making process. In this perspective consumers are viewed as being cognitive and to a lesser extent emotional (Pickett-Baker and Ozaki, 2008). This has resulted in the consumer information-processing model in which the consumer goes through five stages. The stages in this model include problem recognition, information search, evaluation and selection of alternatives, decision implementation and post-purchase evaluation. In this model the purchase process begins when the consumer recognizes a problem or a need (Pickett-Baker and Ozaki, 2008). For instance in the case of Toyota Prius the consumer may realize that the current car that he/she uses is not in line with his/her values of conserving environment and that he/she is spending much to fuel the current car. Consequently the consumer will wish to solve this problem. In the information search stage the consumer looks for information after recognizing the problem in order to help him/her solve the recognized problem. Thus in the case of the consumer in need of eco-friendly and fuel efficient car, he/she will start being more attentive to car adverts, cars purchased by her friends and peer conversation about cars. The consumer may also actively seek information by visiting car distributors within his or her reach (Becker-Olsen, Cudmore and Hill, 2006). This information search will enable the consumer to learn more about fuel efficient and eco-friendly cars in the market. The consumer in this case will become aware of a subset of brands in the market such as electric vehicles and hybrid cars. Some of these cars may satisfy our consumer’s initial buying criteria such as being fuel efficient and eco-friendly (Dennis, Merrilees, Jayawardhena and Wright, 2009). As the consumer in this case continues to search for more information he/she will remain with a few strong candidates or choice sets of cars. Once enough information is gathered, the consumer will evaluate and select among the available alternatives. It is argued that evaluation process is often cognitively driven and rational. Under this view the consumer tries to solve his/her problem in this case to get a fuel efficient and eco-friendly car and hence satisfy his/her need. Thus the consumer in this case will look for problem solving benefits from the cars available (Pickett-Baker and Ozaki, 2008). In this case the consumer will see each car as a bundle of attributes with varied levels of ability to deliver the problem solving benefits to satisfy his/her need of eco-friendly and fuel efficient car (Ndubisi, 2006). At this stage it is important at this stage to distinguish the need, benefits and attributes of the product in this case the car (Dennis, Merrilees, Jayawardhena and Wright, 2009). The three can be organized hierarchically for easier distinction. This allows the consumer to express his/her preferences for certain brands of cars in terms of ranking and probability of choice. Once the consumer in this case shows preference for certain brands of cars say Toyota, he/she will have to implement his/her purchase decision. However, he/she will need to select both specific items, for instance between Toyota Camry and Toyota Prius, and specific dealers to resolve the problems. These decisions can be made simultaneously; item first, dealer second; or dealer first, item second. In most cases consumers engage in a simultaneous selection process of dealers and brands. In our case the consumer may simultaneously decide to buy a Toyota Prius from the nearest dealer (Yuksel, Yuksel and Bilim, 2010). Once the consumer buys a Toyota Prius he/she will go through a post purchase evaluation process. This will depend on the consumer purchase involvement level. Buying a Toyota Prius is a high involvement process and hence the consumer is involved in extensive purchase decision making and thus the consumer is likely to be involved in more elaborate post purchase evaluation. For instance the consumer in this case will question him/herself whether he/she made the right decision. Hierarchy of effects is another model that is widely used in consumer decision-making process. This entails the consumer learning process, which takes place to process information from the external environment. 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