Consumer Behavior

Question: Case Study about the consumer behavior. Answer: Introduction Consumer behavior is the study of individual or organization and the process, by which they select, secure, use, and then dispose of products, services, experiences or ideas to satisfy the customers (Claiborne Sirgy, 2015). People have different form of recreation. In recreation, people tend to do deeds that help them to relax and come out of the mundane of life. They can relax by reading a magazine, eat out with friends, or even sometimes go for vacation. Though going for a vacation can be relaxing, but preparing for the tour can be very hectic. Deciding a holiday tour consumes a great energy, and it takes a toll in the decision making process. Many reasons can influence the whole process. The marketers of the tourism field analyze such influences and make their marketing strategies (Lapierre Giroux, 2015). This report aims at analyzing and discussing the reason behind the particular consumer behavior. Choice of tour package based on personality theories Personality of a person is the result of an individuals trait. Different people show different traits. An individuals action is based on the personality that he or she has acquired. A persons personality develops from the environment they live in, their learned attitude, life values, etc. However, these traits do not remain same throughout the lifespan. The environment that surrounds the individual modifies the individuals personality. Thus, personality is often said to be dynamic. The oldest personality theory is the trait theory. In accordance to the theory, people have certain traits that define human beings, and people choose and act based on the traits (Sandy, Gosling Durant, 2013). Sigmund Freud, the founder of the Psychoanalytic School, stated that personalities are influenced by unconscious motive. These motives are the based on basic biological need. According to this theory, personality depends on the interaction between the id, ego, and superego. Id works mainly on the pl easure principle, whereas, the superego provides the guidelines for judgment, which should be socially acceptable and ego acts as the police maintaining the balance in-between the id and superego (Gabriel, 2013). The Neo-Freudian theorists stated that social interaction and relationship played important roles in the formation of the personality. Based on the notion the theorists divided personality traits into three types: the complaint personality, the aggressive personality, and the detached personality. The people having complaint personality prefer belonging, i.e., to feel loved and accepted, and thus, they prefer something that is secure. The aggressive personality people tend to be rebellious and they have a need to show the power they have, and they are manipulative. The detached personalities prefer to be independent and are self-reliant. Marketers mainly use the Neo-Freudian theories that help in marketing their products (Onu Garvey, 2014). Another concept that influences consumer behavior is that of Self-Concept. The Self-Concept states that consumers tend to buy and use that product, or accept a particular patronize to which their self-image matches and to which they can relate (Sirgy, 2015). Individuals organize a set of traits that they use to describe themselves, and people are reluctant to accept anything that does not match with their personality. This concept of self is learned and ever changing. Self-concept is a mixture of emotion, feeling, and attitude. To understand the aspect of personality, analysis of the response to questionnaire about choice of tour pack, by three subjects are done. The first subject chosen is a male student of age 19 years. He describes himself to be extrovert, craves adventure, has a need to gain self-esteem, and has a knack to earn quickly. His choice is based on pleasure principle, and he has a risk taking habit. Thus, he chooses Option 2, i.e., visit to Las Vegas, and try his hand at gambling. The second subject is a 43-year-old married woman. The womans characteristic are that of adventurous yet prefers security. She desires recognition among people. She also prefers not to take responsibility. This is witnessed in the fact; it is her husband who plans for the tours. Her choice of tour pack caters to all her traits. Option 6, provide a secure tour yet something that can provide affiliation and power to her. The package provides secure place to stay; sure food as well as have the power to taste different wines, which associates with power and affiliation. The third subject thrives for security and safety. He is a 51-year-old married man with children. Being married changes his priority (Yap, Anusic, Lucas, 2012). The thoughts and ideas of his spouse and children matter. He is sympathetic and pays heed to others choice. He has the tendency to judge carefully before taking any decision. This shows in his choice of holiday tour. He chooses Option 4, where the food and accommodation for his family are secure, and he has less to worry. From the discussed analysis, it can be inferred that every individual has different priority, and his or her characteristics are highlighted with this need (Vij, Carrel Walker, 2013). Thus, it is seen that the choice of destination depends on the personality characteristics of the individuals (Davies Cairncross, 2013). Choice of tour package based on individual demography In a study, Wong, Newton Newton (2014) proposed that individual demography influences consumer behavior. In this case, it can be seen that the three subjects are highly influenced by their demographic condition, which includes age, economy, ethnicity, family condition, etc. the choice of tour pack for the 19-year-old male student is at par with his demography. He being young, risk-taking behavior is common (Eaton et al., 2012). Since he is a student; money is a crucial factor. Therefore, he favors less expensive accommodation and wants to control the money spend after food. Since he is young and unmarried, he does not give importance to security and chooses the option where he can gamble. The 43-year-old married woman chooses her option of tourism pack is also influenced by the way she leads life. Since she is married and older than the first subject is, she prefers security. She earns a lot more, so she is not restricted to spend money. Her educational qualification also plays an i mportant role in her choice. Her high position makes her choose something that is expensive. The third subject is the 51-year-old family man from Chinese ethnicity. He chooses the package that covers the security of the family. His ethnicity also plays important role in the place he chooses, i.e., Hong Kong. Since he earns more than the other two subjects do, he spends accordingly but not lavishly. A study by Kardes, Cronley Cline (2014) shows economic condition plays an important role in choosing the option of tour. Marketing Recommendation From the above analysis, it can be said that a human beings choice of tour package depends on both the persons personality and his or her demography. Based on the above analysis, marketers can improve their marketing strategies, attracting more people to the particular pack. To explain it, let us consider the Option 4 (place: Hong Kong). The most likely people who will accept this tour option are mainly family oriented. The tourist would look for security, good food, good lodging, as well as something fun time with the family. If the marketer can introduce extracurricular, fun family recreation, the package will attract more people. The marketers can reduce the cost of the tour by removing the meal pack from the package and let the families manage their food cost. Thus, reduce the package cost can attract even more people for the tour. The marketers can also keep the cost same and increase the number of tour days. This will also increase the probability of the package. By making such changes, the tour organizers will attract more people. The increase in the tourist count will increase the profit of the organization. Conclusion In any business, where the organization needs to sell product to the general people, customers are held in the highest position. Marketers research in the field of what attracts the consumers to the products in the market. They research on how they can act as the honey so that general people consume their product. Study show that many reasons or factors influence the behavior of the consumer. Two of the major factors that influence people's behavior are their individual personality and their demography. Personality is the different traits that form the face of the individual. Demography includes the individual's age, gender, ethnicity, and economy. This report shows how these two factors influence tourism choice and how marketers can change their marketing strategies accordingly to gain profit. References Claiborne, C. B., Sirgy, M. J. (2015). Self-image congruence as a model of consumer attitude formation and behavior: A conceptual review and guide for future research. InProceedings of the 1990 Academy of Marketing Science (AMS) Annual Conference(pp. 1-7). Springer International Publishing. Davies, R., Cairncross, G. (2013). Student tourism and destination choice: exploring the influence of traditional, new, and social media: an Australian case study.Tourism Culture Communication,13(1), 29-42. Eaton, D. K., Kann, L., Kinchen, S., Shanklin, S., Flint, K. 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Sirgy, M. J. (2015). The Self-concept in relation to product preference and purchase intention. InMarketing Horizons: A 1980's Perspective(pp. 350-354). Springer International Publishing. Vij, A., Carrel, A., Walker, J. L. (2013). Incorporating the influence of latent modal preferences on travel mode choice behavior.Transportation Research Part A: Policy and Practice,54, 164-178. Wong, J., Newton, J. D., Newton, F. J. (2014). Effects of power and individual-level cultural orientation on preferences for volunteer tourism.Tourism Management,42, 132-140. Yap, S. C., Anusic, I., Lucas, R. E. (2012). Does personality moderate reaction and adaptation to major life events? Evidence from the British Household Panel Survey.Journal of research in personality,46(5), 477-488. Consumer Behavior Question: Discuss about the Consumer Behavior. Answer: Introduction Nowadays, companies focus on the buying behavior of consumers as rapid and frequent changes have been taking place in the tastes and preferences of the customers. It is the necessity of the companies to track changes taking place in the tastes and preferences of the customers and make huge investments in the research and development department to bring innovative products in the market to meet the demands of the customers (Ferrell and Hartline, 2013). Nowadays, customers are the top priority of the businesses as increase in the customer base results in an increase in the sales and profits of the company. Nowadays, it becomes a necessity to study the consumer buying behavior to remain competitive in the market. Adoption of new technologies by the companies provides an opportunity to consumers to make comparisons between the products offered by competitors in terms of price, discounts offered and features for the purpose of making appropriate buying decisions. In addition to this, usage of technology also facilitates in making order of the products online (Pride and Ferrell, 2004). Nowadays, due to such change in the social environment, companies deliver the products at the doorsteps of the customers at right time. Nowadays, customers prefer online shopping in place of visiting the brick and mortar shops or retail outlets to buy a product. This helps in reducing the cost of the product and providing value to the customer (Dibb and Simkin, 2008). Customers feel convenient to shop online as they can make comparisons between the products offered by different companies in less time as compared to traditional shopping. It is requisite for the companies to identify the unfulfilled demands of the customers and make efforts to fulfill them in an effective manner in comparison to its competitors. This results in attracting more number of customers and increase in the sales and profitability of the companies (Davis and Gschwandtner, 2011). Company Overview Apple is an multinational company established in the year 1977 headquartered in California. It operates in the technology sector and has a first mover advantage over other rivals in the industry. It deals in the manufacturing and distribution of the technology products such as portable computers, Mac line desktop, iPhone, Apple TV and so on. Besides this, it also deals in variety of related software, accessories, third party digital content and applications and networking solutions. Company operate its business operations in different countries such as Greater China, regions of Asia Pacific, Europe and America. Along with this, the company distribute its products through variety of outlets such as App Store, iTunes store, Mac App Store, iBooks Store and so on. These stores are in a form of retail stores, direct sales force through third party cellular network couriers and online stores (Yahoo Finance, 2016). Influence of social factors on the consumer buying behavior towards Apple Computers Consumer buying process There are several social factors that influence the consumer buying behavior towards the portable computers offered by the company such as social status, family, reference group and roles. Consumer behavior takes into consideration the purchase, selection and consumption of the goods and services by the customers for the purpose of satisfying their needs. For the purpose of making the buying decision, the customer recognizes the problem i.e. the purpose or the need for which there is a need to make a purchase decision (Hisrich, 2000). After this, the customer collects information regarding different products available in the market through their friends, role models and family members regarding the feasible product. This helps them to evaluate different alternatives available to them to purchase the product for the purpose of fulfillment of their needs. After this, the consumer make the decision to purchase a product by taking into consideration, its price, features, brand image, and availability. After making the purchase desion, customer also seeks to achieve after sales services offered by the companies so that the product purchased by the customer properly function after making a purchase from the buyer. There is a significant impact of the social factors on the consumer buying behavior (Stokes and Lomax, 2008). Social Factors Reference Group In context to Apple computer, reference group consists of the members such as opinion leader, people associated with its social origin, work, place of residence, leisure and hobbies which have a great influence on the attitude and behavior of a consumer towards buying decision. These members provide different aspects to a consumer to make comparisons of the product with other products so as to make purchase decisions (Meyer, 2015). Within a reference group, there are people who play different roles. The initiator is a person who suggests a consumer to buy a portable computer. The influencers, who influences the buying decision of the consumer by their opinion and thought regarding the portable computer. The decision maker is a person who decides which product to buy in order to fulfill their needs (Ferrell, et al. 2014). Social Roles and Status The other social factor that influences the buying behavior of the consumers towards portable computer is social roles and status. The buying decision of consumers is greatly influenced by their position within their family and social group which include work and friends. The attitude that consumers are supposed to have as per their profession, and position at work is referred to as social role (Wright, 2006). In case of Apple portable computer, consumers buy it for the quality of the computer and to portray social success that the computer represents. If a consumer uses Apple portable computer than it is considered that a person has a high status in the society as it is considered as a luxury product. Nowadays, brands create an image that reflects the social role or status of a consumer (Pride and Ferrell, 2013). Culture Another social factor is culture that influences the buying behavior of the customers towards the product. Culture of a country influences the behavior and needs of the customers. It is a significant cause of the changes occurred in the buying behavior of an individual. Culture differs in different countries due to which it is essential for the marketers to analyze the culture of different countries in order to provide products that meet the changing needs of the customers (Sokolowski, 2013). The behavior of individual is influenced by different factors such as family, friends and culture of the region. It is necessary for the company to study the cultural environment in order to include some of the norms in the organization to attract more number of customers to buy a product. This results in increasing the market share of the company. Besides this, society is also consists of suyb cukltures in which a group of customers share same value due to which there is an existence of sub cul tures in the form of religion, geographic regions, nationalities and racial groups that influences the buying behavior of customers in a significant manner (McGuffin, 2016). Family The customer buying behavior is significantly influenced by the attitudes and behavior of the family members towards the product and services offered by the company. Customer discusses and collect information from their friends and family members regarding the features, after sale services and price of the product for the purpose of making appropriate buying decision. In context to Apple, the customer search for the information related to the specifications of the product from the family members for the purpose of making purchase decisions (Kengthon, 2011). Application of social influences on consumer behavior for the enhancement of the marketing strategies 7 Ps Product: It is requisite to offer the product to a consumer that helps in fulfilling its demands. It is requisite for the marketer to provide the information related to its features, price and quality, and benefits to a consumer in order to persuade them to buy a product. It is essential for the marketer to give emphasis on the key features that differentiate its products from its rivals. Apple make huge investments in research and development department to produce innovative product which helps to attain a competitive advantage over its rivals. The introduction of the new technology helps in providing benefits to customers due to which more customers are attracted towards the product. Apple offers wide range of products such as portable computers, iPhone, Mac line desktop and Apple TV (Funk, 2008). Price: It is requisite for the companies to provide good value of money to customers. It is not necessary that the product is offered at low prices. If the customers are offered with high quality products that fulfill their needs and demands effectively then the consumers are ready to pay premium prices for the product. In context to Apple portable computers, consumers pay premium prices as the company provide innovative product with high quality. Besides this, it also provides after sales services in order to achieve high level of customer satisfaction. For this purpose, the company handle the objections of the customers in an effective manner. The company uses skimming pricing strategy to capture a large market share. Skimming pricing strategy refers to the pricing strategy in which the company offers its products at high price at the time of its launch in the market. Customers are also ready to pay high price for the unique features provided in the product to fulfill the needs of the customers in an effective manner (Lamb, Hair and McDaniel, 2010). Place: It is required by the company to make easy availability of the product to customers in order to capture a large market share. Customers prefer to buy products that are easily available to them. Therefore it is mandatory for the companies to increase the reach of the product to customers. Due to emergence of internet and social media sites, customers prefer to buy product online as it facilitates in delivering of the products at their doorstep. Apple also provides an opportunity to its customers to buy a product online which in turn helps in increasing the customer base of the company (Lamb, 2012). Promotion: Increase in the competition results in the adoption of different promotional techniques for the purpose of spreading awareness of the products launched by the company. This also helps in creation of the brand image in the minds of the customers. In context to Apple, there is a use of different promotional techniques used by the company to provide knowledge about the products offered by the company such as advertisements on TV and social media sites. Besides this, there is also a positive word of mouth publicity of the products and services offered by the company due to the use of new technology. This helps in building positive brand image among its customers. Nowadays, companies also use different methods to promote their product such as provision of discounts, sponsor ships and many more (Cant, Strydom and Jooste, 2009). People: Human resources are the vital part of the organization as it facilitates in directing their efforts towards the achievement of the goals and objectives of the company. Apple also engages its people in the decision making process by taking feedback of the customers and employees related to the product in order to make changes in order to meet the changing demands of the customers (Doole and Lowe, 2005). Processes: Nowadays, companies also focuses on the processes and operations carried out in the organization. The company provides information related to different process adopted by the company to manufacture the product or service offered by the company. In context to Apple, it provides information related to different processes and procedures carried out in the business in order to establish transparency in the operations. This results in the increase in the number of customers and also affects their buying behavior. Apple uses eco-friendly processes to manufacture its products due to which it is well known in the technology industry. It provides information related to the processes on its website from where the customers get the knowledge about different aspects of the products (Nykiel, 2007). Physical Evidence: Apple has different outlets through which the company sells and distributes its products such as retail stores, App store, iBooks and so on. Besides this, the company distributes its products through different channels such as retailers like Wal-Mart and Best Buy by offering a minimum advertised price. This policy prohibits the resellers or dealers from advertising of a product below a certain minimum price. In addition to this, the company has many retail stores and factories where the product is manufactured. The company provides a good working environment to its employees. Physical evidence refers to the attributes of the company that customer see and touch to make its buying decision (Fyall and Garrod, 2005). Market Segmentation It is required for the company to identify the customers of the product being offered by it. Market segmentation is a process through which the customers are divided into different categories on the basis of shared characteristics. Market is divided into different segments for the purpose of identification of the high yield segments. Segmentation of the market into different groups facilitates in deciding the target market and preparation of effective marketing plans. Besides this, it also facilitates in meeting different needs and demands of the customers in an effective manner. This is because companies uses different pricing and promotional strategies to fulfill the demands of the customers effectively. Market segmentation is necessary as there is non- presence of homogeneity between different customers (Cant, Strydom and Jooste, 2009). Different buyers have different individual needs and preferences. Therefore it is impossible for the companies to cater to the differing needs of the customers. For the purpose of meeting the needs of the customers, they are divided into different categories in order to bring homogeneity among them. Division of the customers on the basis of common characteristics helps in the development of a standardized marketing mix for a particular segment of customers. Companies may satisfy the different needs of customers with limited product range by the use of different promotional activities, bundles and incentives. When customers are used to a particular product or service, then the company has an opportunity to up sell or cross sell its products to different customer segments (McGuffin, 2016). It is difficult for the companies to increase the prices or attain a premium prices from all the customers due to which a premium segment is developed in which customers are ready to pay premium prices and distinguishes it from the mass market in terms of additional services, product variations and exclusive point of sale. The market segmentation is done on the basis of demographics, geographic, psychographics and behavioral. The demographic segment of Apple portable computers includes gender, lifecycle stage, income and occupation. Besides the geographic segmentation include density and region and psychographic segmentation includes lifestyle. Besides this, behavioral segmentation is done on the basis of personality, social class and user status (Zimmerman and Blythe, 2013). The market segmentation of Apple portable computers are as follows: Basis Segmentation Possible market segments Psychographic Lifestyle Aspirer, succeeder and explorer Behavioral Social class User status Personality Middle and upper class Non-users and potential users Determined and ambitious Demographic Gender Lifecycle stage Income Occupation Male and female Newly married couples High earners Professionals, managers and executives Geographic Region Density US and International Urban Targeting After dividing the market into different segments, the company tries to focus on one or more segments to sell its products. It is necessary for the company to focus on the selected market segment to fulfill their needs and wants. In context to Apple portable computers, the company focuses on high earners, professionals and executives to sell its product. The company provides new technology in its products with high price due to which the target market of the company consists of professionals, high earners and executives who are ready to pay premium prices for the products of the company. Apple designs its product in a unique manner that differentiates it from other companies and helps in achieving first mover advantage over its competitors (Blythe, et al. 2005). In addition to this, Apple also targets teenagers, students of colleges and universities, children and adults by providing good customer experience. The usage of the portable computers by such target markets helps in fulfilling the needs of the customers as they can easily carry the computer at any place to fulfill their needs at an instant manner. Apple portable computers are designed in a unique manner for the purpose of achieving high level of customer satisfaction in order to attain competitive advantage over other players in the market (Iman, 2002). Positioning In order to fulfilling the needs and demands of its target market, the company launches the product with unique features that fulfill the demands of the customers. The company position its products as innovative and provide good customer experience. The logo of the company also attracts customers to buy the product. The portable computers facilitate users to carry it anywhere in order to complete their tasks in a quick manner. The computer has a large memory which results in storing of large chunks of data to be used in future by the target customers to make decisions effectively. The company promote its product as innovative products that helps in fulfilling the demands of the customers in a quick manner with high quality at reasonable cost. In addition to this, company uses different techniques to promote its products and create a positive image among its customers (Moore and Pareek, 2009). Conclusion It can be concluded that the buying behavior of the customers are greatly influenced by different business environmental factors. This report provides information related to different social factors that influence the buying behavior of customers such as reference group, family, culture and social roles. Besides this, it also provides information related to the segmentation, targeting and positioning strategy of Apple to enhance the consumer buying behavior towards the product. For the analysis, portable computers of Apple is selected. The company segments its market on the basis of four divisions namely geographic, demographic, behavioral and psychographic factors. This company targets high earners, students of universities, professionals, children and adults. The company has gain first mover advantage over its rivals. The company has used skimming pricing strategy to cater to the needs of niche market. References Blythe, J., et al. 2005. Strategic Marketing. 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