Decision-making process in purchasing a car

Imagine you are a consumer who is about to purchase a car. You may imagine it to be any consumer (male or female, in full time employment or student, married or single, old or young, rich or poor, children or no children, etc’) but be sure to clearly state the personal characteristics you imagine this particular consumer to have. It may also be useful at this point to establish whether you are able to gain information on your imaginary chosen consumer (from sources such as Mintel) so that you have credible sources from which to base your report on. Please note that this consumer need not be you!

Your report is expected to describe and explain the characteristics that affect consumer behaviour and outline the consumer decision-making process as it relates to purchasing a car for this consumer. You should also discuss the relevance of the decision-making process to Marketers of cars in general and provide recommendations of how they can influence the stages of the decision-making process.

Introduction

The term consumer behavior includes the customers of specific goods and the people using the goods. It is usually used to refer to any human market behavior and use of products and services.

Today, consumer behaviour is a multidisciplinary science that investigates not only the consumer decision-making process and the acquisition of product, but also the further activities of the consumer after the purchase of the product, such as using, evaluating and rejecting the product or service (Blackwell et al. 2001).

In the present essay, the theory of consumer behavior and the consumer decision-making process will be examined together with the example of a 35 year old woman, married with one kid, living in a big city that wants to buy a car.

The main features of consumer behavior

To better understand consumer behavior, it should be taken into account the factors that most influence the decision-making process. These factor are the following:

Consumer Behavior Incentives

According to the definition given by Wilkie (1994) people buy and consume goods to satisfy their needs and desires. It could be said that consumer behavior is a behavior

motivated to meet specific goals, needs and desires.

In most cases – though not all – of the consumer behavior, people buy and consume goods as a means to satisfy some of the needs – material and sometimes emotional. It should be noted that consumers motives are not always obvious to third parties and as a result the use of theories and conduct of researches are necessary for better understanding of consumer behavior. In the present example, the woman wants a car to go to work, pick up kids from school and go to super-market. These are her stated needs. The car marketer should find out the emotional needs of the particular customer.

A part of consumer behavior derives purely from functional motives), such as when someone buys bricks to build a house, buys a car to satisfy transportation needs while another part of his/her behavior is stimulated by selfexpressive motives (Wilkie, 1994:), as when someone buys a gift for to thank a family member or buy a car to satisfy his prestige needs. Blackwell et al.(2001),in contrast with this position argue that the needs of consumers should not be divided into two major categories, but in subcategories that should include and explain better the different consumer needs. Some of these needs are the physiological needs, the need for health and safety (as it is the case of the car – safe travels), love and companionship, the need of financial resources, the need for pleasure, the need for the creation of the social image of the individual (buying a specific car brand to enhance personal prestige), the need of possessing (everybody has a car) and the need of information (Blackwell et al. 2001:233-245).

At this point it should be mentioned that most consumer behaviors wish to fulfill more than one target or needs, thus not only talking about one motive, but about a group of motives which motivates consumer behavior. In the present example, the groups of motives are transportation, social image and possession needs.

In addition, while some motives may be visible to consumers and third parties, others may be more difficult to determine, for example when the decisions that should be taken are more complex and closely linked to the feelings of the consumer.

The activities of consumer behavior

The act of consuming cannot be addressed unilaterally. It should be taken into account the thoughts, feelings, plans, decisions, markets and experiences accumulated by the act of consumption. Certainly, a researcher of “purchasing” behavior who focuses on the act of consumption and does not consider it globally, may omit other equally important activities (advertising, opinions of others, collection of information, evaluation of alternatives, purchase decision, type of payment, product use, etc.) that are contained within it and they are equally important. These activities can be distinguished into deliberate and coincidental. For example, the activity of the decision of buying a product can be described in most cases as a deliberate consumer behavior as it is the case of the car where the consumer has to plan in advance the car purchase. On the other hand, when a consumer visits a store to buy a specific product in mind, s/he sees a multitude of other goods and not a few times he can buy some of these without having a plan. Such consumer behavior may

be classified as impulsive. This differentiation is particularly useful to researchers of consumer behavior and advertisers, who understand the mechanisms of behavior more comprehensively (Wilkie: 1994).

The process of consumer behavior

The concept of process which includes various activity stages is a very useful approach to better understand consumer behavior. This process has three stages. The first stage of the activities of pro- buying could include the actions to select the product which is followed by the second stage of purchase of the product – and finally the third stage of the after-purchase, which includes actions such as the depreciation of the product. The activities before buying the car could be search at auto-magazines, advertisement exposure etc., whereas at the third stage there could be activities like the evaluation of technical service etc.

The treatment of consumer behavior as a process, “stresses the importance of the stages that precede and follow the one of the purchase” (Wilkie 1994:17), and gives guidelines to analyze the reason why a consumer makes specific purchases.

Diversification of consumer behavior

Two elements that could differentiate the consumer behavior of the individual are the the time and complexity of the decision.

Time refers to when the decision is taken and the duration of the completion of the process. Complexity refers, in turn, to the number of activities involved in making a decision but also to the difficulty of this decision. Buying a car is a complex decision since it involves product and price comparison, ways of payment etc. Since it is a complex decision it is also time consuming.

Relating these two concepts, it is understood that the more complex a decision is, the more time is needed for the decision. It is understandable that the more complex a decision is the greater will be the activities of the pre-purchase. In the present case, the activities could be talking to friends, look at car magazines, go to car exhibitions etc. Many times, however, the consumer to avoid a possible delay, which may lead to a not so profitable market – s/he has not seen offers for the product so s/he acts with less detail than he could. In other words, s/he tries to simplify the decision-making process in the following ways (Wilkie:1994):

• The consumer is not always looking for the best purchase, but for a good –

acceptable purchase.

• S/he is driven by information, advice and recommendations of third parties. The opinion of friends and family can play a significant role in the car buying decision.

• S/he trusts brands and stores purchased in the past and has remained

satisfied with them. The salesman should check the previous brands purchased by the customer.

Several times, the process of satisfying needs, is confronted with the simplification of the decision making process. As for example, the purchase of a relatively cheap product which should have the required by the consumer quality standards. Many consumers face such dilemmas, maintaining an ‘agility’ on the purchasing process, therefore they can take advantage of these situations.

Roles and Consumer Behavior

A consumer in the decision process and after having made the decision,may have more than one roles, for example s/he can be the person that affects the final decision of the purchaser or user (influencer). S/he could be practicing these three roles at the same time as when shopping alone or when shopping only for himself. Consumer behavior, may influenced by others, so the role of the individual who affects the final decision may be played by people of the individual’s wider social environment – a friend / the family or otherwise it could be the salesman. In the present example this woman could be influenced by her husband in her decision. Moreover the role of the user in many cases could not be the purchaser and / or influencer, but a third person who will use the product purchased. It is understandable, that the possible combinations of these three roles could be outnumbered by those already mentioned, depending on the consumer, the external environment but also his personality. The woman, for example, may be influenced by her husband but she has her own personality thus she may choose the car brand that is more suitable to her.

The roles of consumers mentioned above are born through social interactions. Very few purchases are made driven solely by the “ego” – consciously or subconsciously people’s decisions take always into account their social circle. It is also important to note that the roles change during the lifetime of the consumer. For example, a child rarely can be an influencer and even more rarely buyer. The purchases of a childless young man usually involve himself, and a consumer with children buys largely for his family and certainly is influenced by the needs of other family members as it is the case in the present example.

Extrinsic factors and Consumer Behavior

It is a fact that the consumer is influenced by his/her environment, a fact that highlights the ability to adapt to different circumstances, depending always on the needs that should be met. This exogenous influence impacts on the consumer decision-making process. These factors are:

Culture refers to beliefs, values and opinions shared by members of the society where people live and has a catalytic effect on people’s behavior during their life by

putting “limits” in people’s understanding on which products and services are acceptable. The subcultures, are groups of people who belong in the broader context of culture and share similar values and attitudes. A subculture could be working women with children

Some examples are those of gender, ethnicity, race, age and religion. Also, the social class that someone belongs to is a factor that may influence consumer behavior (Pinson & Jolibert: 1998). Like what is his/her job, income and education level that s/he has.

One of the main factors affecting the purchasing behavior is the family. Especially in Mediterranean societies, where the family institution is still strong, people are influenced by consumer habits as children and later as adults. The social surroundings and the reference groups to which people belong is an equally important factor, since everyday conversations and contacts affect consumer habits.

For example, if someone play sports, s/he will definitely be affected by the advice of his/her coach regarding his/her dietary habits and clothes preferences.

The external conditions such as inflation and unemployment or an illness in the family are factors that will determine the amount to be spent to purchase a product and when it is best to purchase a specific commodity. The marketing environment in conjunction with the presence at mass media is an area that in recent decades has gained immense power of influence in today’s consumer. For example, usually the ads aim to influence consumer for a particular product of a certain brand, while the factor culture does not “suggest” specific brands but more goods

for consumption. As stated by Peter and Olson, (1998), culture influences consumer behavior, which in turn may enhance the formulation and development of culture.

Conclusion

In the present essay αναλύθηκε η θεωρία της συμπεριφοράς του καταναλωτή αναφέροντας την περίπτωση αγοράς αυτοκινήτου. Ο μάρκετερ στην αγορά αυτοκινήτων θα πρέπει μέσω των καταλλήλων data mining techniques και της κατάλληλης εκπαίδευσης των πωλητών του να βρει τα κίνητρα που υπάρχουν σε έναν καταναλωτή όταν πρόκειται να προβεί στην αγορά ενός αυτοκινήτου. Παράλληλα, θα πρέπει να κάνει αποτελεσματική τμηματοποίηση της αγοράς και σε κάθε τμήμα να βρει τον τύπο των ανθρώπων που επηρεάζουν την αγοραστική διαδικασία.

Ο ρόλος της διαφήμισης είναι επίσης σημαντικός δεδομένου ότι στον αναπτυγμένο κόσμο η αγορά ενός αυτοκινήτου εντάσσεται στην υπάρχουσα κουλτούρα οπότε η διαφήμιση θα ωθήσει τον καταναλωτή στην αγορά μίας συγκεκριμένης επωνυμίας.

Baumeister, R.F. (2002), “Yielding to temptation: self-control failure, impulsive

purchasing and consumer behavior”, Journal of Consumer Research, Vol. 28,

March, pp. 670-676.

• Beatty, S.E. and Ferrell, M.E. (1998), “Impulse buying: modeling its precursors”,

Journal of Retailing, Vol. 74(2), pp. 169-191.

• Blackwell, R.D, Miniard, P.W. and Engel, J.F. (2001), Consumer Behavior,

Harcourt College Publishers, 9th Ed.

• Coley, A. and Burgess, B. (2003), “Gender differences in cognitive and affective

impulse buying”, Journal of Fashion Marketing and Management, Vol. 7, No.3,

pp. 282-295.

• d’ Astous, A. (1990), “An inquiry into the compulsive side of normal consumers”,

Journal of Consumer Policy, Vol. 13, pp. 15-31.

• de Rada, V.D. (1998), “A single consumer or different types of consumer: an

analysis of social types according to their consumer habits”, British Food Journal,

Vol. 100/7, pp. 326-336.

• Dittmar, H, Beattie, J. and Friese. S. (1995), “Gender identity and material

symbols: objects and decision considerations in impulse purchases”, Journal of

Economic Psychology, Vol. 16, pp. 491-511.

• Dittmar, H, Beattie, J. and Friese. S. (1996), “Objects, decision considerations and

self-image in men’s and women’s impulse purchases”, Acta Psychologica, Vol.

93, pp. 187-206.

• Dittmar, H. and Drury. J. (2000), “Self-image – is it in the bag? A qualitative

comparison between ordinary and excessive consumers”, Journal of Economic

Psychology, Vol. 21, pp. 109-142.

• Firat, A.F. (1993), “Postmodernity: a marketing age”, Journal of Marketing

• Hausman, A. (2000), “A multi-method investigation of consumer motivations in

impulse buying behavior”, Journal of Consumer Marketing, Vol. 17, No.5, pp.

403-419.

• Luna, P. and Gupta, S.F. (2001), “An intergrative framework for cross-cultural

consumer behavior”, International Marketing Review, Vol. 18, No.1, pp. 45-69.

• Meehl, P.E. (1962), “Schizotaxia, schizotypy and schizophrenia”, American

Psychologist, Vol. 7, pp. 827-838

• Miltenberger, R.G, Redlin, J, Crosby, R, Stickney, M, Mitchell, J, Wonderlich, S,

Faber, R. and Smyth, J. (2003), “Direct and retrospective assessment of factors

contributing to compulsive buying”, Journal of Behavior Therapy and

Experimental Psychiatry, pp. 1-9.

• Mullen, B. and J. Johnson, C. (1990), The psychology of consumer behavior,

Hillsdale, NJ: Lawrence Erlbaum Associates.

• Pinson, C. and Jolibert, A. (1997), “Consumer behavior: an overview of current

approaches and issues”, In European Perspectives on Consumer Behaviour,

Edited by Lambkin, M, Foxall, G, Raaij F.V. and Heilbrunn, B, Prentice Hall

Europe 1998.

• Piron, F. (1991), “Defining impulse purchasing”, Advances in Consumer

Research, Vol. 18, pp. 509-513.

• Reed, A.II. (2002), “Social identity as a useful perspective for self-conceptbased

consumer research”, Psychology and Marketing, Vol. 19 (3), March, pp. 235-266.

• Rifkin, J (1996), Το τέλος της εργασίας και το μέλλον της: η δύση του

παγκόσμιου εργατικού δυναμικού και το χάραμα της μετά – την – αγορά εποχής,

Αθήνα: Σύνορα» Α.Α. Λιβάνη

• Roberts, A.J. and Manolis, C. (2000), “Baby boomers and busters: an exploratory

investigation of attitudes toward marketing advertising and consumerism”,

Journal of Consumer Marketing, Vol. 17, pp. 481-499.

• Roberts, A.J. and Mays, W.A. (2003), “Generation Y has compulsive buying

genes”, source: www.applesforhealth.com/Mentalhealth

• Shoham, A. and Brencic, M. (2003), “Compulsive buying behavior”, Journal of

Consumer Marketing, Vol. 20, No.2, pp. 127-138.

• Solomon, M.R. (2002), Consumer behavior, Prentice-Hall, Englewood Cliffs, NJ.

• Statt, D.A. (1997), Understanding the consumer: a psychological approach,

Houndmills: Macmillan Business.

• Stern, H. (1962), “The significance of impulse buying today”, Journal of

Marketing, Vol. 26, April, pp. 59-63.

• Toffler, A. (1970), Future shock, Toronto: Bantam Books.

• Wicklund, R.A. and Gollwitzer, P.M. (1982), Symbolic self-completion, Hillsade,

NJ: Erlbaum.

• Wilkie, W.L. (1994), Consumer behavior, New York: John Wiley & Sons.

• Williams, T.G. (2002), “Social class influences on purchase evaluation criteria”,

Journal of Consumer Marketing, Vol. 9, No.13, pp. 249-276.

• Wood, M. (1998), “Socio-economic status, delay of gratification and impulse

buying”, Journal of Economic Psychology, Vol. 19, pp. 295-320.

• Woodruffe, H. (1997), “Compensatory consumption: why women go shopping

when they are fed up and other stories”, Marketing Intelligence and Planning,

Vol. 15/ 7, pp. 325-334.