Factors Influencing Consumer Decision-Making: Personal, Psychological, and Social Influences

Assignment Requirements:

• Write between 750-1000 words per question using Microsoft Word
• Be sure when constructing your paper, you incorporate concepts from the chapter and/or lecture to show your understanding of the topic.
• Use font size 12, 1” margins and double spaced.
• Include cover page & reference page (if needed)
• At least 80% of your paper must be original content/writing
• No more than 20% of your content/information may come from references.
• Use at least three references from outside the course material, one reference must be from EBSCOhost. Textbook, lectures and other materials in the course may be used but are not counted toward the three reference requirement.
• Cite all reference material (data, dates, graphs, quotes, paraphrased words, values, etc.) in the paper and list on a reference page in APA style.

References must come from sources such as scholarly journals found in EBSCOhost, CNN, online newspapers such as The Wall Street Journal, government websites, etc. Sources such as Wikis, Yahoo Answers, eHow, blogs, etc. are not acceptable for academic writing.

ANSWER

Decision Making Approaches

Introduction

Business is essential for community and national development. The main goal of any business activity is to make profits. Businesspeople strive to carry out studies and research on the different behavior of consumers, in a bid to position themselves properly to attract many of them and increase their profits. Previously, we have discussed the different stages of consumer decision making on making a purchase. There are various factors involved in consumer research and decision making. These can be summed up into three distinct categories, depending on the risks involved in a purchase and the involvement of a consumer. The following is a look at the three categories and their risk relationship.

The personal category is the first classification of decision-making processes. Personal factors are unique for every consumer. Some of the factors that affect a consumer’s buying decisions, which can be categorized as personal are the gender of the individual, the racial background, and the age of the consumer. Male consumers will prefer different products from their female counterparts. The young people, for instance, the millennials, will buy products and pay for services in a way that is different from the older people. An advertisement that is appealing to the young generation may upset the old people. Other personal factors are issues such as the responsibility of decision making in a family. An individual who is tasked with the making of purchase decisions in a family will influence which products will be bought by the family.

Consumer needs and tastes keep fluctuating, depending on their age and life stage. Food choices, clothing, furniture, and hobbies all depend on a consumer’s lifestyle and age. The tastes of consumers change according to what stage they are at, in their lifetime. Another important factor is the income level of a consumer. Income levels dictate what products a consumer can afford, and how ready they are willing to spend their money. For example, wealthy people have more money to spend on luxurious products. People with low incomes only buy products that they cannot live without. The level of risk a consumer is willing to take depends on the above discussed personal factors. Earlier product experiences, life stages and income levels all influence the amount of risk that one is ready to take in the fulfillment of needs. A good example of personal factors influencing buying decisions is a young man in his twenties making the decision to purchase a new mobile device. A young man is willing to spend a significant amount of money to purchase a smartphone that will meet his technological needs, as opposed to an old man who is not on social media platforms.

Psychological factors also influence buying decisions. Various psychological factors such as the level of knowledge of a consumer affect how one makes buying decisions. The psychological factors can be summarized as consumer motivation, perception, beliefs and learning, and consumer attitudes. Maslow’s needs are the consumer’s motivators towards satisfying a need. One first seeks to fulfill basic requirements, food, clothing, and shelter. The consumer then seeks to fulfill security requirements and the feeling of belonging to a certain group. One’s ego needs and self-actualization come last according to Maslow’s hierarchy of needs. Our perceptions as consumers vary, depending on what level we are at on the Maslow’s hierarchy, past experiences, our attitudes towards certain products, and our beliefs.

Consumers selectively listen to information, distort it or retain it depending on their needs and preferences. One listens to information that he or she chooses to be attentive to while neglecting any other information that may not benefit them at that time. A good example would be a man having the desire to own a piece of land for farming or building purposes. He is bound to pay utmost attention to advertisements of real estate companies, land sellers, and land auctioneers, and ignore car or mobile phone advertisements. One brand advertisement will be interpreted quite differently by a number of consumers, as a result of the selective processes of attention, distortion, and retention. The risk a consumer is willing to take will depend on the psychological needs he or she has at a particular time. For instance, one may be willing to spend $ 20,000 on a car, but refuse to spend a mere $ 100 on a music system, depending on his current needs.

Social factors are the third category in the consumer decision making processes. Consumer needs, preferences, and wants are all influenced by social factors such as opinion leaders, customs, public opinion, family, social groups, culture of the community, etc. if an individual belongs to a certain social group, the individual is bound to be influenced by the group’s values, behavior, and attitudes towards certain goods. Our families, friends and other groups such as professional groups all affect our attitudes either negatively or positively. Social classes such as occupational groups, income groups, and ethnicity also influence our decisions as consumers. Individuals of the same profession or the same race will most likely prefer commodities that are similar or at least related. A good example is the preference of corporate executives and the wealthy class to drive the Mercedes luxury car.

Our different cultures also greatly influence our consumer decisions. It dictates what advertisements we are comfortable with, what we choose to eat, the kind of clothes we wear, and where we live or travel. Businesses incur huge risks when conducting advertisements and promotion activities without a proper market study on the culture of the targeted community. Family background also affects us, as consumers. A consumer who has already gained a certain perception towards a certain brand during his childhood, say a preference for a certain yogurt brand, is most likely to live with that perception for the rest of his life.

The level of resources we have at our disposal, wealth, social status or occupation determine the amount of money we are willing to spend on certain goods and the risks that we are willing to take to fulfill our wants. A wealthy lady will be willing to purchase Apple’s MacBook for her business enterprise, but another lady of a lower income group will go for an office computer brand that is quite cheaper. Many people are willing to purchase certain goods, even though quite expensive, for the need to belong to a certain prestigious social class.

References

EBSCOhost journal: Firm Use and Consumer Acceptance of Mobile Apps for Mobile Marketing Purposes, by Thomas Wozniak.

Khan, M. A. (2007). Consumer behaviour and advertising management. New Age International.

Kotler, P., & Armstrong, G. (2010). Principles of marketing. Pearson education.

Fortune Magazine article: http://fortune.com/2018/03/14/why-consumers-may-be-souring-on-apple-and-google/?iid=sr-link3

Forbes Magazine article: https://www.forbes.com/sites/briansolis/2018/03/06/connected-consumers-literally-search-for-the-worst-brands-to-avoid-purchase-mistakes/#a3dc8de28624