Internal Factors Affecting Consumer Behaviour - Literature review Example

Running head: INTERNAL FACTORS AND CONSUMER BEHAVIOUR Consumer Behaviour: Internal Factors Affecting Consumer Behaviour Student’s Name Course Tutor’s Name Date Table of Contents Executive Summary This paper offers a discussion of the internal factors that affect consumer behaviour. The paper specifically discussed five internal aspects that are widely discussed in literature and associated with affecting consumer choices. The five aspects are applied in the context of car purchasing. The paper notes that car buyers have different needs and motivations, and this may influence the purchase decisions they make in relation to the car model, size and fuel consumption. The paper also discusses the effect of personality and self-concept on consumer behaviour and indicates that consumers strive to attain congruency between the cars they purchase and their personalities and self-concept. Consumer perception is also an intrinsic factor that affects the choice of car that one buys. Specifically, consumers form perceptions about cars based on what they have heard or read, the price, and the imagery they have regarding the cars. This paper has also discussed consumer learning and involvement and indicates that consumers learn in different ways. Learning may occur through classical conditioning or operant conditioning. Notably, the paper argues that purchasing a car is an important decision not only because of the money involved, but because people do not buy and dispose cars every day. Arguably therefore, the complexity of a car purchase makes it a high-involvement decision for the consumer, where they would have to pay close attention to all the information they gather and process it keenly. Finally, the paper has related customer attitude development and change with consumer behaviour in relation to car purchases. The paper notes that positive attitudes alone are not sufficient to make consumers purchase specific car models. The paper also notes that just as attitudes are learned, they can also be unlearned or altered, hence leading to a change in attitudes. Introduction When buying a specific thing, consumers are influenced by a combination of external and internal factors. External factors such as culture, race or religion are responsible for the values that consumers uphold when purchasing a product or service. Internally, however, consumers are influenced by a combination of factors, which include motivation, attitude, learning and perceptions (Egan, 2007, p.57). Motivation refers to a consumer’s inner drive, which causes him or her to endeavour towards the attainment of a specific level of satisfaction. Attitude on the other hand refers to strongly held views that the consumer has. On its part, learning refers to a consumer’s ability to retain knowledge from past experiences. Finally, perceptions refer to the manner in which consumers interpret different experiences and make sense of the world around them (Egan, 2007, p. 57; Modi & Jhulka, 2012, p. 528). Considering that purchasing a car is a high-involvement undertaking, it is expected that internal factors would play a critical role in influencing a consumer’s purchase decision. This paper will review the internal factors that influence consumer behaviour when purchasing cars, and will draw on several relevant theories. Consumer Needs and Motivation Every car owner has a reason why he or she decided to purchase a specific vehicle and not another. As Dima, Man and Kot (2010, p. 2) note, the most plausible explanation that people give for purchasing a specific product or service is that at the time of buying it met specific needs that they had. Consumer needs form the basis of problem recognition, since as Dima et al. (2010, p. 2) suggest, one realises there is a problem when there is a difference between their real and ideal states. For example, a potential car buyer realises that there is a problem when his or her older car stalls severally even after its scheduled maintenance is performed. Another consumer may recognise a problem after getting married and having children, thereby realising the need to have a car that can accommodate the whole family. Motivation on the other hand represents some sort of a force that pushes consumers to act in a manner that enables them to overcome the stress brought about by the state of dissatisfaction (Dima et al., 2010, p. 2; Egan, 2007, p. 57). One of the widely cited motivational theories that are applicable in this paper is Maslow’s hierarchy of needs. The theory posits that at the very basic, a person is motivated by physiological needs, which include food, water and other basics needed for human survival. If a person was to purchase a car at this stage, it would most likely be a basic car needed to get the person from one point to another. The second hierarchy relates to security, and consists of such things as shelter and clothing (Dima et al., 2010, p.3). If a consumer was to purchase a car at this stage, they would not go just for a basic car, but would also consider whether the car has air-conditioning, whether it is fitted with air bags, and would even research the car model’s safety history. The next hierarchy relates to affiliation needs and considers that a human being needs to associate with others (Dima et al., 2010, p.3). At this stage, a person’s motivation for purchasing something may be related to the need to belong to a social group. When purchasing a car, a person who is motivated by affiliation needs go beyond basic and security considerations, and would consider whether the vehicle will qualify them as part of the in-group among people they associate with. Notably, a person would not want to be far beyond or below other people they consider to be with in the same group. For example, a woman living in a middle-class neighbourhood and who has friends in the same neighbourhood would possibly strive to own a car that is affordable among people of her social class. A step further in Maslow’s hierarchy, self-esteem needs arise. Here, Dima et al. (2010, p. 3) note that the things a person buys are inspired by a combination of self-perception and the need for other people to perceive the person in a particular way. For example, when purchasing a car, a consumer may need to balance between the can model and make that they think portrays them well and the need to be perceived in a particular way. A female consumer may be dissuaded from purchasing a specific car that she really likes because she thinks people would perceive it as a reflection of masculinity. Such a consumer would then be led (by her esteem needs) to purchase a car that she thinks represents her ideal self to some degree, while being perceived by others in a manner that she (the female consumer) would like to be perceived. The final step in Maslow’s hierarchy of needs is self-fulfilment needs. As indicated by Dima et al. (2010, p. 3), self-fulfilment needs are the hardest to attain, but this does not mean that consumers do not attempt to get to that optimal level. Arguably, consumers who can afford it will always purchase the latest, fastest, safest, sleekest car in the market in the hope that they will attain self-fulfilment. Unfortunately, self-fulfilment is always elusive, and this may explain why people will always yearn for better cars in terms of quality, durability, safety or even speed. Personality and Self-Concept Webb (2005, p. 12) defines personality as the characteristic behaviour patterns that are unique to each person. There are different personality theories in literature, and such include the psychoanalytical theory, trait theory, social/environment theories and self-concept theory. The psychoanalytical theory suggests that the behaviours that people exhibit in adulthoods are a reflection of what they experienced in earlier years as children (Webb, 2005, p. 13). The psychoanalytic theory has links with motivation theories since it is believed that the unconscious mind controls the conscious mind, thus playing a significant role in the development of personalities. According to Webb (2005, p. 14) a person’s personality and motivation is shaped by the person’s need to attain a balance between doing what is right and their primitive instincts. The foregoing balance constitutes a person’s ego (Webb 2005, p.14). The social/environment theories are linked to the Jungian personality types, which classify people as either introverts or extroverts with sensing, intuiting, feeling or thinking personalities. Trait personality theory on the other hand indicates that a person’s nature is determined by characteristics such as shyness or outgoingness (Webb, 2005, p. 17). According to the trait theories, people can be categorised into five personality types namely: neuroticism, agreeableness, extroversion/introversion, conscientiousness and openness to new and interesting experiences (Webb, 2005, p. 18). Finally, the self-concept theory suggests that people’s self-image is shaped by the attitude that they have about themselves, and how they evaluate the same images (Webb, 2005, p.19). The theory further suggests that people’s self-concept is made of the image they have of themselves and the esteem they have. According to Webb (2005, p. 20), buyer behaviour is influenced by three aspects, which are explained in the self-concept theory. They include people’s real self-concept, which is defined as the manner in which people perceive themselves; people’s ideal self – i.e. how people think others perceive them; and people’s social self – i.e. how people present themselves to others with the intention of shaping how they perceive them (Sirgy, 1982, p. 287). Arguably, the self-concept theory is most applicable theory in car buying because vehicle buyers most likely purchase cars that reflect how they perceive themselves and how they think others perceive them. A young girl will, for example, choose a vehicle that is different from that of a married woman who has children. The older woman perceives herself as more mature and will therefore go for a car that not only reflects her perceived status, but one that will also enable her to handle her responsibilities of a mother and a wife, for example, by dropping and picking the children to and from school or going shopping with the whole family. Webb (2005, p. 22) also notes that one’s self image affects the choices that consumers make. When purchasing a car for example, people who consider themselves to be in a higher position than others in their in-group will go for a vehicle that conveys prestige or status. Therefore, a person’s choice of a car should be interpreted as a reflection of the person they are (or who they think they are). Consumer Perception Perception is defined as a psychological process through which a person “selects, organises and interprets the information he or she receives from the environment” (Wee et al., 2014, p. 382). Consumer perception is critical in purchase behaviour because it is a psychological factor that affects the consumer’s purchase intentions (Sheth et al. 2004, p. 34). As Schiffman and Kanuk (2010, p. 51) note, consumers’ decisions do not always rely on reality; rather, they are affected more by what the consumer perceives as reality. To shape their perceptions, Wee et al. (2014, p. 382) note that consumers rely on cues such as price, perceived value and features of a product or service. For instance, when purchasing a car, consumer perceptions will be shaped by the car model, its performance, its interiors, and its price among other things. The consumer’s perception of attributes of a specific car compared to another contributes significantly to the decision on whether to buy the specific model or not. According to Schiffman, Kanuk and Das (2006, p. 3), consumer perception has three aspects namely selection, organisation and interpretation. During selection, consumers consciously or unconsciously screen a product or service for stimuli. The selection phase is affected by factors which include the consumer’s motive, his/her previous experience, and the nature of the stimuli that motivated them to consider purchasing a product or service. Schiffman et al. (2006, p.16) note that in the perceptual selection phase, consumers are biased towards the stimuli they want to see and the attention they pay to a particular stimuli. They can also screen out or tune out the stimuli they consider threatening. In a car showroom for instance, a consumer can choose just to walk out in order to block or tune out a sales person who cannot let him or her (the consumer) make their own judgement on what car to purchase. Schiffman et al. (2006, p. 20) note that consumer perception can be distorted by several factors which include the physical appearance of a product, first impressions, stereotypes that the consumer holds, the halo effect, and even the consumer’s tendency to jump into conclusions. For example, while purchasing a car, a consumer may be unwilling to consider anything else but a Mercedes Benz, based on the stereotype that German-made cars are hardier than American models. In the showroom, the same customer may dismiss all bright-coloured Mercedes as unmanly based on physical appearance and first impressions alone. Cognitive biases, which constitute the halo effect that the consumer has towards specific car models, may also affect the consumer’s final purchase choice. Since purchasing a car requires more money than say fast moving consumer items, it is normal for consumers to have a higher engagement with perceived prices. For example, a family man may perceive a car model in terms of other things he would have loved to purchase. He may have wanted to purchase a three-door sports car, but since he has a family that he would need to accommodate in the same vehicle on certain occasions, he has to opt for a bigger car. It would be expected that such a person would go for a car that closely resembles a sports car, but with added functionality. The perceived price of such a car would thus be based not on the actual monetary cost, but on the sports car that the man had to sacrifice. The perceived price-quality relationship also affects consumers’ choices. Zeithmal (1988, p.11) for example indicates that consumers always think that the pricier a product is, the better its quality. However, he notes that scientifically, the price-quality hypothesis has not been proven. The unproven nature of the hypothesis has not however deterred consumers from holding similar perceptions. In the car market for example, cars that are arguably of high quality sell for more. Consumer imagery has relevance in consumer perception because as Schiffman et al. (2006, p. 16) note, consumers usually evaluate products and determine if they are congruent with their self-image. Lack of congruence in imagery often leads to consumers failing to purchase a particular product, thereby continuing with the search for a more appropriate product. Schiffman et al. (2006, p. 21) note that consumer perception is shaped by the imagery that the consumers have about a product’s price, quality, risk and even the positioning and repositioning of the product in the market. Perceived risk theory posits that perceived risk influences consumers’ purchase intentions, because naturally, consumers are averse to risks (Mitchell, 1992, p.1). Perceived quality is defined as a product’s superiority or excellence as judged by a consumer (Zeithaml, 1988, p. 3). Notably, perceived quality is different from the actual quality of a product. Usually, the perceived quality results from the product’s reputation that the consumer is exposed to. The perceived price on the other hand is defined as a combination of the objective price of a product, the perceived non-monetary price that the consumer has to pay, and the sacrifice that the consumer makes in order to afford a specific product (Zeithaml, 1988, p.10). Positioning and repositioning of a product in the market affects the consumer’s perception about it when compared to other brands. For example, there are cars that have positioned themselves as American-made cars and succeeded in appealing to consumers on that basis alone. However, they are others that position themselves as models that care about the environment, even though they are not made in America. The latter category arguably appeals to a section of consumers who perceive the need to protect the environment as a superior consideration compared to the need to purchase American-made brands. Consumer Learning and Involvement Consumer learning is defined as a process through which consumers acquire the knowledge needed to purchase and consume specific things (Gregan-Paxton & John 1997, p. 267). Psychological theorists argue that learning in consumers leads to changes in their purchase behaviour, hence suggesting that a consumer who has acquired more knowledge is likely to act differently compared to one who has not acquired the same knowledge (Solomon, Bamossy & Askegaard, 1999, p. 65). Notably, most of the learning that occurs in a consumer is incidental or unintentional. However, some of the learning occurs intentionally. Several theories try to explain how learning takes place among consumers. Behavioural learning theories for instance hypothesise that learning occurs in response to external stimuli (Schiffman et al., 2008, p. 187; Solomon et al., 1999, p. 65). One of the popular concepts in consumer learning theory is according to Solomon et al. (1999, p. 66), premised on the concept that the consumer is a ‘black box’ who, depending on the stimulus, gives a specific response as indicated in figure 1 below. Figure 1: The consumer is depicted as the black box in the middle, which depends on stimulus to give a response Source: Solomon et al. (1999, p. 66). The black box concept can be expressed in two theories of consumer learning. They are classical and instrumental conditioning theories. According to Schiffman et al. (2008, p. 187), classical conditioning theory perceives humans as passive creatures, who can be imparted with learning or knowledge through repetitive or conditioning acts. Solomon et al. (1999, p. 66) notes that classical conditioning occurs when two sets of stimulus are paired to elicit response. One stimulus must elicit response, while the other does not have to elicit response. With time, the human mind learns to associate even the response that did not initially elicit a response with some action, thus producing a response. In other words, the two stimuli are able to elicit the same kind of response from a person. Notably, classical conditioning relies on olfactory and visual cues to induce a specific type of conditioning. For example, a specific car can be advertised as the epitome of masculinity, so much that male and female buyers would automatically perceive it as a car for the physically strong and admirable man whenever they see it. In such a case, advertisers would be relying on the visual cues to condition people to believe that the car is actually the epitome of masculinity. Notably and as indicated by Schiffman et al. (2008, p. 189), classical conditioning only occurs successfully where something is repeated, stimulus generated, and the person being targeted engages in stimulus discrimination. The longevity of classical conditioning is however doubted in literature, because the response generated after a person engages with the stimulus reduces with too much exposure or too little exposure, until it completely disappears (Schiffman et al., 2008, p. 189). Using the example above, the association between a specific car and masculinity can disappear if the advertisement that created that impression in the first place stops airing, or if the advertisement continues airing for far too long until people get used to it. The second form of conditioning occurs when people learn which of their actions produce good and bad results (Solomon et al., 1999, p. 67). As would be expected, such learning enables the people to pursue actions that give good results while avoiding those which yield negative results. Such learning has been termed as operant or instrumental conditioning. Schiffman et al. (2008, p. 193) note that operant conditioning is a more appropriate theory in explaining complex consumer behaviours, especially those that are goal-directed. In particular, operant conditioning occurs after several experiences, which produce both desirable and undesirable results. When purchasing a car for example, operant conditioning occurs when a consumer test drives several cars and notes their advantages or disadvantages. In the end, the consumer will pick the car that he or she thinks gives them the most positive experiences. Some of the considerations they may make include leg room, head room, fuel consumption, tyres’ road grip, the braking system and the car’s interior and exterior. Alternatively, the consumer may go to a showroom with the sole intent of purchasing a car closely similar to what he or she had owned in the past. That would mean that they had loved everything about the past car, so much that they want a similar car. In addition to the behavioural learning theories expounded above, Schiffman et al. (2008, p. 196) and Solomon et al. (1999, p. 69) also note that cognitive learning theories are also used to explain how learning happens in consumers. Notably, the cognitive learning theory regards a consumer as a problem solver who actively searches information that would help them solve their problem. Not having a car is for example, a problem, which the consumer would be expected to resolve by purchasing a car. To successfully solve the problem however, the theory insinuates that the would-be car buyer would actively search for information that would help him or her make the right purchase choice. Solomon et al. (1999, p. 99) defines consumer involvement as the interest or sense of importance that a stimuli evokes in a person in a particular situation. From this definition, one gets the impression that Solomon et al. (1999, p. 99) are implying that consumers, their situation and the product combine to determine their motivation to understand information about the product. Purchasing a car is, for example, an important decision not only because of the money involved, but because people do not buy cars every now and then. Arguably therefore, the complexity of a car purchase makes it a high-involvement decision for the consumer, where they would have to pay close attention to all the information they gather and process it keenly. Consumer Attitude and Development Attitude is generally defined as an acquired (through learning) predisposition that enables a person to behave in a consistent manner, which he or she deems either favourable or unfavourable in response to a given situation or object (Schiffman et al. 2013, p. 273). Notably, positive attitudes among consumers towards a product or service are important, but as Schiffman et al. (2006, p. 3) note, they are insufficient for describing purchase intentions. The authors give an example in the vehicle industry by noting that although consumers have positive attitudes towards the Mercedes Benz and even perceive it as a top of class car, their intention to purchase it was low. Schiffman et al. (2006, p. 7) point out that attitudes are learned through classical conditioning, operant conditioning and cognitive learning. The authors further indicate that attitudes are developed through several models. One such model is the tri-component model, which has a cognitive component that is acquired through the acquisition of knowledge and perceptions and through direct experiences. The second component is the affective component, which includes how person feels or emotionally connects to an object. Finally, the behavioural component relates to how a person tends to act towards a product (Schiffman et al., 2013, p. 272). The multi-attribute attitude model also explains how consumers’ attitudes develop and argues that different products attract different attitudes and beliefs from the consumer (Schiffman et al., 2013, p. 272). The model suggests that consumers may develop different attitudes towards an object or towards how the object behaves. For example, a person may have a negative attitude toward a specific car model, while another person may have a specific attitude towards the car’s performance. The theory of reasoned action is cited by Schiffman et al. (2013, p. 273) as among models of the multi-attribute attitude model because the theory considers the relationship that exists between a consumer’s intentions, behaviour and attitude. Although different theories explain how attitudes are formed, it is important to note that personal experiences and one’s personality play a major role in attitude formation. Additionally, the experiences of others and their ideas may also influence attitude formation as noted by Schiffman et al. (2013, p. 273). Just like attitude development, attitude change is also learned, and can be influenced by information gained from external sources. For example, people who initially had a bad attitude towards a specific car model can change their opinion about the same if they hear contrary views from their friends or family. Notably, such people may start to question the basis of their attitude, and may even be open to learning new attitudes and unlearning the old ones. Conclusion This paper offers a discussion of the internal factors that influence consumer behaviour in relation to car purchasing behaviour. The paper has discussed consumer needs and motivation in relation to car buying and notes that people’s needs and motivation are inspired by different things and circumstances. A need is born from a problem that a consumer has and to which they seek to find a solution. The motivation that a person has towards resolving a prevailing problem on the other hand depends on the urgency and critical nature of finding a solution to the problem. Personality and self-concept has also been found to affect consumer behaviour because consumers seem to purchase products or services that are congruent to their personality and how they perceive themselves to be. Consumer perception, learning and involvement and consumer attitude development have also been discussed in this paper in relation to car purchasing behaviour. References Dima, I.C., Man, M., & Kot, S. (2010). Use of Abraham Maslow’s motivation theory for setting consumers’ satisfaction-non-satisfaction. Polish Journal of Management Studies, 2, 1-7. Egan, J. (2007). Marketing communications. Stamford, CA: Cengage Learning EMEA. Gregan-Paxton, J., & John, D.R. (1997). Consumer learning by analogy: A model of internal knowledge transfer. Journal of Consumer Research, 24(3), 266-284. Mitchell, V-W. (1992). Understanding consumers’ behaviour: Can perceived risk theory help? Management Decision (Impact Factor 1.3), 30(1), Modi, S., & Jhulka, T. (2012). 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