External Factors That Influence Consumer Purchasing Decision - Essay Example

Executive Summary This essay revolved around the external factors that influence purchase decisions. Different processes are involved during the buying decision making, which are influenced by varied factors. Culture mirrors the consumers’ values, ideals, and attitudes that significantly influence the way consumer communicate and evaluate varying purchasing situations. The social economic, situational influences and reference groups emerged as most crucial factors underpinning purchase decision making. Resource endowment is a key determinant of whether a purchase occurs or what type of consumer product is procured. The decision making process starts with need recognition, search fro information, and alternative evaluation to settle of a product. The purchase step is followed by post-purchase evaluation that examines the consequences of the purchase decision. Table of Contents Executive Summary 1 Relevant Concepts 3 Cognitive Model 3 Culture 4 Subcultures 7 Social Economic Level 8 Reference Groups 9 Household 12 Situational Influences 14 Conclusion 16 References 17 External Factors that Influence Consumer Purchasing Decision Consumer purchasing decision as presented in this paper refers to the behavioral dynamic in which the buyer identifies, purchases, and consumes services to meet their desires. Different processes are involved during the buying decision making, which are influenced by varied factors. The purchasing decision initiates by the consumer identifying services or commodities they are in need of, which is followed by selection of goods or services that promise the greatest utility (Chon, Pizam, & Mansfeld, 2012). Additionally, the purchasing decision making process entails the consumer budgeting for the goods and services they have selected. After the analysis of the prevailing cost of acquiring the goods or services selected, the next phase in the decision making process is to particularize goods or services that will really be purchased. Throughout the purchasing process, there are inherent factors: cultural, economic, social, legal, and even political that underpins the real purchase and consumption. It is imperative that across the social divide in the global community, like many others, travelers do not make air ticket purchase decisions in vacuum. This is to imply that there are innumerous factors, internal and external that influences their purchasing behavior. Relevant Concepts Cognitive Model The rationales of the cognitive model portray the consumer as a participative problem solver that is conscious of their needs and armed with relevant information. The concept presents consumers as active information seekers that seek to understand products and services in the market that can satisfy their felt and not perceived needs. The primary focus of the cognitive model is the desire by consumers to acquire and assess market information regarding target product or service. Consumers in this context are presented as information-centered stakeholders that rigorously process information in order to make purchase decisions. The analysis of critical factors that influence consumer purchase decision revolves around five-step conceptual framework: problem recognition, information search, alternative evaluation, purchase, and post-purchase evaluation (Chon, Pizam, & Mansfeld, 2012). The perception of the need to acquire a merchandise of procure a service entails the ability to perceive the difference between an individual’s anticipation and actual situations in such a great extent that one is able to sanction a decision. This step is followed by the search for relevant information to provide for informed choice from an array of alternatives. The third step in the conceptual framework underpinning purchase decision is the assessment of the alternative using the information gathered. This stage helps the consumer by offering a criterion for following in the purchase process. For instance, information search yields brand names that might be satisfying and develops consumer value perception. The actual purchase decision is a function of various considerations informed by the preceding steps that depend on the terms of sale, return policy, and any experiences established from dealing with a particular seller. The post-purchase behavior revolves primarily on whether the purchase process followed due procedures that guided effective decision or it was flawed that ineffective. The post-purchase evaluation greatly determines repeat purchases. Culture Culture is used in this context to connote the behavioral patterns and social relations that characterize certain segments of consumers and make them distinct from others. In the analysis of a consumer decision making process, culture is considered the mirror of the consumers’ values, ideals, and attitudes that significantly influence the way people would communicate and evaluate varying purchasing situations (Diecidue, Rudi & Wenjie, 2012). Culture has constantly been presented by market and business researchers as a multidimensional feature in the realm of consumer-market relations. In general, culture is a significant determinant of consumer attitude, values, personality, and material possessions (Ramesh, 2008). The employment of culture in this report is to emphasize on its conceptual strength in setting boundaries within which consumers would tend to think and act: norms. The implication is that straying from norms attracts unprecedented ramifications that may include social disapproval and even banishment from the community. However, living within cultural boundaries confers explicit and apparent rewards that may include the zeal to do better in order to benefit from certain individually promoting procedures (Chon, Pizam, & Mansfeld, 2012). These premises underlie some disguised justification for airliners to try and accomplish competency by aiding travelers in acquainting with what would amount to appropriate tours travel consumer behavior. The culture factor plays in the open in the air travel industry because unlike in the wild where culture is primarily instinctive, in the hospitality and travel industry it is learnt and acquired through imitation or observation (Hoyer & Maclnnis, 2008). The learning of culture has to be voluntary and driven by social requirements. This premise bolsters an explanation of the process via which a first time traveler acquires a set of values, perceptions, preferences, and behaviors through the social institutions (Rangarajan, Kennedy & Murti, 2010). It is apparent that air travelers are unconscious of the influence of culture on their air ticket purchasing via online channels. Consumers in the tourism air travel think and act in consistency with the established culture in the industry. This premise ratifies the general explanation that certain human behavior can be acceptable to some cultures and yet be vilified by other groups. In this context, cultural connotations in the air travel refer to the way tourists or online air ticket purchasers share certain sets of convictions that order and relate many specific attributes (Wright, 2006). Culture is a unique social component that is inculcated from one generation to the other, which transits through social institutions such as family and religious organizations. As noted by Ramesh (2008), culture is an adaptive feature that evolves in that it can curve a consistency of association of certain benefits of services or brand with new values. This explanation preempts the emerging doctrine of cultural-borrowing that connotes the pursuit for better solutions to new industry challenges. For instance, the contemporary hospitality and air travel trends in the developing economies greatly follow European and North American industry benchmarks. An individual’s culture forms the basis on which references are made as regards accepted norms and habits, which presents culture as a complexion of arbitrary social features. For instance, there is a ubiquitous cultural belief that in the United States of America social norms revolve around equality, optimal use of resources, materialism, individualist economic habits, and the youth (Rangarajan, Kennedy & Murti, 2010). These cultural attributes play a critical role in an individual’s consumption decision making because they are the benchmarks on purchase choices are pegged. Differences in cultures and the underlying consequences reflect explicitly from the increasing internationalization of hospitality and tourism industries that are primary anchors of the air travelling industry. There are apparent differences between the ways tourists from one continent or region make air tickets purchase decisions compared with travelers from another geographical location. For instance, there are clear cultural differences in the way Europeans make tourist air travel decision compared to Americans. As provided by Diecidue, Rudi and Wenjie (2012), tourists and hospitality consumers from Europe will commonly make air travel reservations based on the number of the whole family and for a period extending to several days or weeks. This cultural premise is evinced by French culture in which business close literary in the month of August as the country enters the vacationing season. However, the culture differs with that of Americans that make tourist trips for short period of time that often involve particular members of the family. Subcultures Subcultures are equally effective as the mother culture in transferring beliefs and values between generations. It is imperative that each ethnic group, racial, and religious groups portray their distinctive consumer preferences for goods and services. Although the influential features drawn from subcultures are innumerous, age and gender are worthy presenting in this context. According to Wright (2006), the age factor reflects how different communities worldwide play the age card to arrive at purchasing decisions. In some societies and in particular contexts, children are allowed to participate in some purchase decision making while other decisions are strict preserve of the adults. In a context where the society vests much responsibility about purchase decision making on children, there establishes an environment in which the main decisions revolve around the young members. Some ethnic and religious groups hold values traditionally known to segregate between men and women. In a context where men are virtually crowned the onus of acquiring economic resources and solely making travel decisions, the women play rather rudimentary roles in the purchase decision making. For example, in the Saudi Arabian society women have a peripheral role in making hospitality and tourism service purchase decisions abroad because government policies deprive them of the freedom to exercise that right. Social Economic Level The component of social economic level has increasingly been reported as one of the crucial influencers of consumer decision making especially in the hospitality and tourism industries. In this context, the air travel firms have been critical in research to correlate social economic levels with air travel patterns in order to accommodate diverse categories of travelers. This premise explains the influence of social economic level on the individual consumer decision making as a tourist would try to limit plans to the scope that fits their status. Additionally, managers in the hospitality and air travel industries delve on social economic dynamic to design marketing mix that appeal to certain groups, which in turn bears great influence on the traveling options available to the consumers (Wright, 2006). If for example for potential consumers that rely on the internet sources to purchase tourist travel air ticket, they would be prompted to seek information from websites of service providers in the hospitality industry. This implies that for upscale and expensive hospitality facilities, the consumer would make consumption decision based on promotional information aimed at certain social economic level. Important social economic level factors include demographic, physical and also material means that affect the consumption drive for a particular consumer. Economic resources that matter in this context include financial power that an individual has. The relevance of economic resources in the tour and travel context extracts from the speculative reliability of the consumer. This implies that although current income greatly influences purchase decision, the tourist would be concerned more about better suited if they have futuristic information that details their resources statuses even after procuring the service (Diecidue, Rudi & Wenjie, 2012). The consumer confidence is thus a crucial factor determining whether an individual will reserve resources for luxurious travel. For example, an individual would first assess the resources available in order to decide whether they take their spouses on a tourist trip abroad or stay the plan because of high inflation rates and decreased consumer confidence. Temporal resources play also play an inevitable role during a consumption decision making. Although some consumes may be wealthy and financially endowed to afford luxury travels abroad, time may be a constraining factor that greatly influences the service purchase decision (Ramesh, 2008). Although financial resources confer wealthy consumers with unparalleled ability to purchase whatever they desire at any time, time constraint can deter them from procuring tours and travel services, which explains the influence of time factor in purchase decision making. Reference Groups A reference group is used in this context to connote the aggregations of people that a consumer associates and identifies with, which greatly influences the consumption standards for members (Noel, 2009). In the tourism and air travel industries, reference groups play an instrumental role as regards individual member’s purchase decision making. There are three important categories of reference groups worthy exploring in this context. Reference groups have ubiquitously been classified into three forms that critically influence their role in the context of purchase decision making. In the normative form (Noel, 2009), the influence reflects from the desire by an individual consumer to fulfill wider expectations of the group in order to earn direct rewards and avert any potential sanctions. In the influential form, the purchaser conforms to the opinions and habits of other group members as the credible sources of real decision making verdicts. This context, the influence on consumption decision reflects explicitly especially during situations when the assessments on available services are difficult to deduce, which compels a purchaser to decide based on resemblance with choices of other members. For example, presented with difficulties between purchasing a tours and travel service between Kenya’s Masai Mara Safari and Tanzania’s Serengeti, a consumer spoilt for choice will likely settle on an agency and service likely selected by most of the members in the reference group. Identification is the other form of influence common in the reference group contexts. The influence becomes apparent when individuals within a group internalize and accept gregarious norms as their own because of the desire to satisfy personal psychological affiliation needs. The consequence of this aspect is that the consumer encapsulates into the decision making process as dictated by the group values even at times when there is no apparent motivation for remaining a member. The influence of reference group on traveler’s purchase decision bolsters from the tourist’s tendency to compare personal feelings and thoughts with those of other members. For example, a tourist may have travelled to Africa under the auspices of a tours and travel agency and felt that the experience and service were commendable. However, the excellence of the agency’s service has to be internalized and ratified by the reference group that confers validity to the insinuated perceptions (Smith, 2011). This is to imply that the reference group plays an instrumental role in the final air ticket purchase decision by members planning to use the service of the agency. Sandhusen (2000) argues that in many instances especially among youth tourists the perception repository within the reference group greatly influences first and repeat purchase decisions. It is worthy noting that reference groups establish shared norms and values that subconsciously dictate the purchase behavior of members. For instance, in a all-online ticket purchasing group there would be a critical selection of which agencies to seek services from and defined methods of sourcing for the tour services. This would likely drive members to seek elitist tourist tastes as laid out in the group norms that may particularize international travels over local destinations. In this context, a tourist from a certain reference group would be compelled to purchase travel ticket from a branded tours and travel agency compared to consuming same services that may comparatively be superior from a local airliner. Important to note is that tastes and preferences within a reference group evolve over time (Sandhusen, 2000). This premise is evinced by a tourist travelling change among American college students that have conspicuously moved from exciting spring visits to Florida’s Daytona Beach that was common practice a decade ago. Emerging trend points at a change in favor within the reference group to destinations in Cancun, Mexico and the Caribbean. The hospitality managers are emerging as crucial reference groups that impart great influence on the way consumers in the industry make reservation decisions. In particular, the managers act as opinion leaders that may dispense the influence via formal or informal ways the purchase decisions of their followers (Sandhusen, 2000). Common opinion leaders in this context include members of the community that are perceived as experts in the contexts at hand. For example, Noel (2009) cites travel agents as apparent opinion leaders for tourist travel-related services. This implies that travelers would seek and rely on advice from the agent because of established norm that they have superior knowledge and experience in the field. Further in the context of hospitality managers acting as opinion leaders and thus influential reference pointers, they are increasingly creating enticement rewards. The primary aim of citing this practice is to recognize custom agency customer relations practices that may result in instrumental influence on travelers’ purchase decisions. Managers in this context reward frequent customers that in turn become their conduct agents that form the reference group environment that spurs the choice of the agency by new travelers. Household Household in this context is used to imply a group of people living under the same house or residence. The term household has evolved from the traditional family that has undergone innumerous changes over time. Households in the contemporary society comprise of fewer members and are increasingly becoming complicated in that some units comprise of two parents of same sex while others consist of unrelated individuals living together (Ramesh, 2008). These salient features of a household pose unprecedented contexts in the purchasing decision making in that the traditional norms are virtually departed. Hoyer and Maclnnis (2008) provides that the aspect of life cycle in the family set up provides the basis for understanding and explaining the dynamic of purchase decision making process. As family life cycle transits the changing norms, members of every unit undergo various changes that influence the ultimate service purchasing decisions especially in the hospitality and tourism industry. In general, the family life cycle starts with a young single individual that has just detached from parental altruistic care and started as self supporting life. At such situations the individual may have a lot of spare time to travel around the world as is common among young people in the U.S. and Europe. Additionally, at the youthful level of family cycle individuals may be motivated by lack of responsibility to cater for spouses or children and commit to tour abroad for leisure. As an individual age, nature prescribes the desire for partnering with a purpose of creating a new family defunct from the extended one. With a new family comes responsibilities for spouses and care for children, which imposes a lengthy socioeconomic burden that not only eats up on spare time but also disposable income (Ramesh, 2008) that would previously permit purchase of luxury travel service. In essence, a household in the contemporary society underpins the influences and activities of each member. Family members would often make decisions to purchase services for the household as well as their individual purposes. A strongly cohesive family is likely to have consumption decisions made collectively with full participation of every member compared with highly divided one in which individuals would make purchasing decisions without responsibility for the utility of the consumption to others. Of importance is that within each household there are certain leadership and norms that characterize the members. In a household setting for instance in the United States the leadership rotates among members and this implies that a travel purchase decision can be summoned by any individual. However, while the younger members of the household can have a say over the accommodation and the type of food to eat while at the tour destination, it is the adults that often make the decision about which agency to offer the travel services (Smith, 2011). Situational Influences Situational factors are usually influences that are beyond the buyer’s control. The factors may include communication, purchase, usage, and dispositional (Hoyer & Maclnnis, 2008). Communication becomes a circumstantial factor influencing consumer purchase decision making when conversations with other people or advertisements affect the opinion of the consumer as regards the destination or the agency to travel with. The purchase situational factor prevails because of the environment under which the tourist seeks the travel services. Other factors involve the settings of where and how the consumption of the services being sought will take place. For example, if the tourist intends to visit a tented camp service at the wilderness in Africa, he/she will likely want to procure services of an experienced tour and travel agency that is knowledgeable and experienced in the desired market niche. The availability of the fit agency would cause the traveler to purchase the travel services while absence of a suitable services provider for the particular niche would compel the tourist not to reserve tickets for the destination. Other unforeseen events such as an economic recession are some of the situational factors that play a role in a consumer’s purchase decisions. According to Kaufman and Barnes (2001), an economic crisis is a situational scenario that may impair and individual’s resource endowment thus compromising the purchasing power. Additionally, a recession can cause players in the industry to raise prices thus making it difficult for consumers to purchase planned tour and travel services as earlier budgeted thus significantly influencing the ultimate decision on consumption. A rare but possible situation that can tremendously influence a purchase decision making especially in the hospitality and tourism industries is a declaration of state of emergency or imposition of a curfew. For example a curfew placed on tourists during a declaration of martial law could compromise the power to access and procure travel services within the affected zone. This implies that during such situations that consumer may have to make purchase decisions that have to satisfy the designated time periods because their freedom to buy the service whenever they choose is curtailed. Task definition surfaces as another important situational factor to be considered during hospitality and tourism service purchase. For example, in situations where the purchaser intends to buy reserve the service as a gift to a friend or family member, there are anxieties to be appreciated from both ends. The underlying issues such as social expectations and other dimensions such as ritualized uses, such as honeymoon after wedding, can greatly influence the purchaser to make decisions differently from what they would under normal circumstances. The purchase decision in this situation will vary depending on the occasion and the character of the receiving travelers. For example, an employee may want to impress the employer by giving an expensive honeymooning gift, which implies that conventional air travel norms may be unsuitable. Conclusion This essay detailed the factors that influence the consumer purchase decision. The main purpose of the report was to analyze and promote the understanding of the manner in which consumers behave in a conventional market. Different processes are involved during the buying decision making, which are influenced by varied factors. It emerged that external factors are greatly influential on the part of final consumer purchase decisions. Culture has been documented as the principle descriptor of consumer’s belief, customs, knowledge and habits as regards purchase of certain commodities or services. The inevitable social economic influences play an important role in defining how people make crucial purchasing decisions conscious of their resource endowment and need priorities. Consumers often portray varying social association dynamics that greatly influence their purchasing decisions in that group favors play a dominant role in cultivating a choice for service or goods. The consumer choice for a service or goods is bolstered by ability to identify the need, search for satisfactory information and assessment of the utility of the choice. The purchase decision normally follows a pot-purchase evaluation that typically examines the consequences of settling on the product or service, which determines the occurrence of a repeat purchase. References Chon, K.S., Pizam, A., & Mansfeld, Y. (2012). Consumer behavior in travel and tourism. London, UK: Routledge. Diecidue, E., Rudi, N., & Wenjie, T. (2012). Dynamic purchase decisions under regret: Price and availability. Decision Analysis, 9 (1), 22-30. Hoyer, W.D., & Maclnnis, D.J. (2008). Consumer behavior. (5th ed.). London, UK: Cengage Learning. Noel, H. (2009). Basics marketing 01: Consumer behavior. New York, NY: AVA Publishing. Ramesh, K. (2008). Conceptual issues in consumer behavior: The Indian context, New Delhi, India: Pearson Education India. Rangarajan, K., Kennedy, S.H., & Murti, M. (2010). Management megatrends. New York, NY: Allied Publishers. Sandhusen, R. (2000). Marketing. (3rd ed.). London, UK: Barron’s Educational Series. Smith, K. T. (2011). 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