Consumer Behaviors

Table of Contents

1.0         Introduction. 3

2.0         Explanation of the decision making Processes. 3

2.1         Extensive decision-making. 3

2.2         Limited decision-making process. 4

3.0         Two situational factors. 4

3.1 factor 1- Physical situations. 5

3.2 factor 2- Social surrounding. 5

4.0 Steps in the decision-making process. 6

4.1. Extended decision making process. 6

Figure 1: Decision rule table. 6

4.2. Limited decision-making process. 7

4.3 strengths and weaknesses. 8

5.0 Conclusion. 9

6.0 References. 10

1.0   Introduction

As established by Solomon (2011), consumer behavior is about how consumers behave in situations involving services, ideas, experiences as well as goods. Lewis (2005) further emphasized that this is consumer behavior actions in the marketplace, as well as the fundamental motives for those actions. However, Solomon (2011) explains that studying consumer behavior is crucial since it assists organizations in understanding and learning to anticipate how consumers respond to their products or services. Secondly, it helps them to recognize how their customers make their decisions as well as identify the various factors that influence them while making their decisions. However, consumers make decisions depending on their needs, desires, and preferences, but various factors affect them while making decisions. These factors may either be internal or external factors that influence consumers while making their decisions. The assignment aims to apply and analyze the decision-making process in two situations as well as describe situational factors and how they influence decision making in the two situations.

2.0   Explanation of the decision making Processes

2.1    Extensive decision-making

Choosing a restaurant in the first scenario requires an extensive decision-making process. As established by Hyun (2002), an extensive decision-making process is involved when the product is a high involvement product that requires high investment. This type of decision-making process consists of the consumer to go through each stage systematically. However, consumers are aware of existing product alternatives, capable of ranking each alternative correctly in terms of their benefits and disadvantage, as well as identifying the best choices. Therefore, for me to identify the best restaurant in the city, I ought to identify all the restaurants in the region and consider the services they offer as well as determine if they can meet my expectations. Using this strategy will assist me in identifying the best restaurant to take my girlfriend for dinner. As supported by Alós-Ferrer & Ritzberger (2016), marketers should know about understanding their consumers at every stage hence modify their strategies accordingly.

2.2    Limited decision-making process

In the second scenario, I was expected to go out with my friends and buy take away meal at any restaurant. In such a situation, I was expected to use limited decision making. However, Peter, Olson & Grunert (1999) highlights that limited decision making is when consumers make decisions when acquiring products that require an adequate amount of effort and time while comparing brands and models before choosing while purchasing the product. Peter (1999) further emphasized that this type of decision making is simple, straightforward, and involves simple decision rules while choosing the product among its alternatives. In addition to that, it uses the rule of thumb as well as involves cognitive shortcuts. More so, it is applied while making a low investment that involves less risk-taking. The main reason why I will use a limited decision-making process is that one am familiar and comfortable consuming my meals at any restaurant; therefore, we will choose any restaurant without considering its alternatives.

3.0   Two situational factors

As expounded by Zhuang et al. (2006), situational factors are influences that affect consumer’s behavior and do not occur from the individual but outside sources. Mihić & Kursan (2010) refers to these factors as external factors such as the people surrounding the consumer, the environment, school, as well as the workplace. However, they are provisional conditions that affect how consumers behave while purchasing products. Therefore in scenario one, the situational factors that will influence my decision making while choosing the best restaurant to take out my girlfriend are:

3.1 factor 1- Physical situations

Zhuang et al. (2006) states that physical situations are those factors a consumer considers before choosing whether to purchase or not. Location, interior décor, music, and aromas are some of the physical situations that will influence me while making a choice of which restaurant to choose. On the contrary, not all physical factors that organizations can control, such as weather, hence limit customers, especially during the rainy seasons; I cannot take my girlfriend to a beach resort. While in scenario two, the physical situation is highly considered since the nearer the café, the higher the chance we purchase their products. But in scenario one, we have to consider all other physical, situational factors.

3.2 factor 2- Social surrounding

Social surroundings are those factors such as the type of customers in the restaurant, available queues or crowding, social class of the consumers’, among other factors (Mihić & Kursan, 2010). However, in scenario one, I have to give my lady a memorable first dinner, so I have to choose those restaurants with high-profile consumers attending it, no overcrowding, and queues. But in scenario two, these situational factors will have less impact on the restaurant we choose.

4.0 Steps in the decision-making process

4.1. Extended decision making process

Figure 1: Decision rule table

Importance of the attributes

1. Site location- this is one of the attribute one ought to consider while choosing a restaurant in order to ensure easy accessibility of the restaurant.
2. Meals- while choosing a restaurant, this is another attribute one ought to consider in order to get the best meals serviced. Creativity in their meals is another factor that was considered above while selecting the restaurant.

• Creativity- creativity is considered in terms of the restaurant internal décor, product presentation as well as effective customer services. Therefore, if a restaurant meets the above terms then will be considered.

1. Product availability- means that the restaurant can provide the customers with the products and the services of their desires, hence an attribute was considered while choosing the restaurant to consider those organizations can offer them with their demands.
2. Affordable- while considering the affordability of a restaurant this implies the cost the restaurant uses to disburse their products as well as their services. Therefore, while choosing a restaurant, one ought to consider the cost they are willing to incur in exchange of the services provided.

From the above decision rule table, I managed to choose the restaurant of my desire. I used the table to analyze four different restaurants using the same characteristics. These characteristics were identified out using a grading system of 1-5 points; the restaurant that has the best characteristic gets 5 points while the least has 1 point. The importance of the grading system is to rule out the restaurant with the highest services compared to its alternatives. Using the decision rule above, I chose the roots restaurant since it had the highest points in all the attributes. The restaurant has private garden destinations as well as provides unique meals nature can provide hence the best place to take my girl.

4.2. Limited decision-making process

Gigerenzer & Gaissmaier (2011) explains that heuristics is a problem-solving approach that uses shortcuts to offer well-enough results given a limited time deadline or frame. Peter, Olson & Grunert (1999) expounded this approach as a flexible technique for a quick decision, especially while working with complex data. Additionally, this concept is used to speed up analysis as well as investment decisions. Below are two types of heuristics decision making approach;

1. Availability heuristic- Gigerenzer & Gaissmaier (2011) identified the availability heuristic as one of the approaches that involve making a decision based on how easy it is to bring an event to mind hence its fast to recall that activity.
2. Representativeness heuristic- Gigerenzer & Gaissmaier (2011) further identified representativeness heuristic as a type of decision making by comparing the current occurrence with other representative’s mental prototypes.

Therefore, while purchasing the Friday evening takeaway, I would use the representativeness heuristic to decide in order to identify the best café my friends, and I would purchase our take away.

4.3 strengths and weaknesses

The importance of using the extended decision rule is to enable the consumer to identify different attributes of different products in order to identify the best product from its alternatives (Hyun, 2002). In addition to that, it assists organizations to understand what benefits customers seek for most as well as the characteristics that are most significant when consumers are making their decision. On the contrary, Alós-Ferrer & Ritzberger (2016) states that using the above approach can rule out a product, yet it serves the purpose better since most consumers will prefer purchasing the famous products in the market. More so the process consumes much time and efforts while analyzing different alternatives.

However, the strengths of heuristics are to provide a solution as fast as possible; secondly it reduces the extensive procedures used in making decisions, and finally, it attributes all the substitutes leaving the buyers with the right decision. Although Gigerenzer & Gaissmaier (2011) stipulates that this approach focuses more on the minor issues leaving out the major issues, which does not provide the buyer with the right option. Finally, this approach exposes the consumer to less information concerning the products they are purchasing.

5.0 Conclusion

From the above analysis, it is clear that various factors contribute to consumer behavior as a result of how they behave in different occurrences. Before purchasing products, consumers are expected to make decisions in order to identify the best product they would consume. However, their decisions are affected by various situational factors which include task influences, social surroundings, temporary situations as well as physical situations. However, I used the decision table to analyze all the restaurants attributes and found the best restaurant to take my girlfriend to. While in scenario two I used heuristics approach to in order to make the decision on where we can buy takeaway meals with my friends.

6.0 References

Alós-Ferrer, C., & Ritzberger, K. (2016). Extensive Decision Problems. In The Theory of Extensive Form Games (pp. 67-97). Springer, Berlin, Heidelberg.

Gigerenzer, G., & Gaissmaier, W. (2011). Heuristic decision making. Annual review of psychology, 62, 451-482.

Hyun, Y. (2002). Consumer Behaviour on the Internet: A Critical Analysis of the Extensive Decision-making Process of Online Holiday Travellers (Doctoral dissertation, University of Canberra).

Lewis, M. (2005). Incorporating strategic consumer behavior into customer valuation. Journal of Marketing, 69(4), 230-238.

Mihić, M., & Kursan, I. (2010). Assessing the situational factors and impulsive buying behavior: Market segmentation approach. Management: journal of contemporary management issues, 15(2), 47-66.

Peter, J. P., Olson, J. C., & Grunert, K. G. (1999). Consumer behaviour and marketing strategy (pp. 329-48). London: McGraw-hill.

Solomon, M. R. (2011). Consumer Behavior: Buying, Having, and Being. Global Edition. Pearson, 14(2), 116-124.

Zhuang, G., Tsang, A. S., Zhou, N., Li, F., & Nicholls, J. A. F. (2006). Impacts of situational factors on buying decisions in shopping malls: an empirical study with multinational data. European Journal of Marketing, 40(1-2), 17-43.