Theoretical background Consumer preference may be described as the subjective tastes, as measured by utility, of various bundles of goods. They permit the customers to rank these bundles of goods according to the levels of utility they give consumer. Outcome of the entire customer preference contains an optimal choice. However it is to be kept in mind that preference by the customer does not dependent on the customer earnings or cost of product it is because capability of consumer to buy does not indicate his likes or dislikes. Necessity of understanding consumer preference Positive inspiration leads to the preference from the consumer. Positive motivation shown by affective similarity against goods or service. Preference from the customer …show more content…
The study of buyer preference depend on the “observation method” which tend to be less costly or least expensive way understanding behaviour. The selective enquiry measure undertaken in studying buyer preference with the assistance of questionnaires. Questionnaires usually determine the varied behaviour and not actual hence it is the method of observation. “Conjugate analysis” is a method used to measure buyer inclination towards for alternative product concepts. Technique which is used to figure out value which buyer tie to the distinct characteristics of the product. Here customers are provided with hypothetical offers collected through joining distinctive characteristics where respondents are expected to rank according to their preference. Buyer preferences can be obtained through various methods such as paired comparison, simple rank ordering, appraisal scales etc. along with both positives and negatives. Unitary appraisal method provides more accurate outcome than others. Study requires the respondent to scale each product or service according to their preference. This method helps us to find out qualitative levels of choice for each object and distance between them. Analysing several products using this method becomes more
These data affect the consumer decision-making process through alternative evaluation, the consumer compares the different choices to best meet their individuals need. The consumer decides the criteria for judging the alternative products or services by evaluative criteria. Consumers use tangible and intangible criteria, and when evaluating alternatives, determine qualities that are important and evaluate the alternatives.
The consumer decision process consists of these six steps. First, problem recognition: Awareness of an unmet need. Second, information search: Search for alternatives that will meet your needs. Third, alternative evaluation: Evaluate the alternatives. Forth, purchase decision: Decide on the best alternative for you based on your criteria. Fifth, post-purchase behavior: Determine if you are satisfied with your choice. Sixth, disposal of product: Determine if you will keep it, upgrade it, or get rid of
1.2. Compare Buyer behavior and decision making process in different situation (P 1.2) ......... 4
The theory of consumer behavior has a few assumptions. First, preferences are assumed to be complete, but, we cannot measure utility quantitatively, for example, if we score A 4 and we score B 2, it means that A is better than B, but it does not mean that having A is two times better than having B, so scoring them with different numbers does not mean anything, the only thing matters is the ranking. Second, preferences are transitive, which means that if A is better than B and B is better than C than A is better than C. Third, more is better, which means that people would like to have more goods than less. Forth, we cannot aggregate utility across individuals since utilities are not observable. Fifth, in the traditional utility theory, economists use indifference curves to represent the utilities of
Consumer offerings are essential products that are available in the consumers’ market. However, not all these offerings are part of the consumers’ need at a particular time. In this brief piece of writing, readers will understand the consumer offerings that relate to their needs and when. Similarly, readers will learn the difference in these offerings and probably the products the author has patronized with a vivid example. At the end of the paper, readers should feel free to consult the references that aided the writing.
Careful consideration of the preceding description of consumer choice behaviour and the firm's selection of a strategy immediately leads one to question the general applicability of these assumption / thought. Although consumers often display stable preferences, sound choice behaviour seldom remains constant. Instead, consumers frequently change their choices of products or brands. Furthermore, the choices made on different occasions often involve two very different products or brands.
Every company wants to understand why people decide to buy its products or others. Firstly, we have to understand why people buy certain kind of product. People buy products because they need them. A need is activated and felt when there is a sufficient discrepancy between a desired or preferred state of being and the actual state. (Engle£¬Blackwell and Miniard. 1995. p407 ) For example, when you feel hungry, what you needs is some food. It is very important for marketer to understand the needs of consumers. All the consumers may have the same needs, but the ways which they satisfy what they need are different. Here is a example, Chinese people would choose rice when they feel hungry, whilst British people may choose bread to satisfy their needs.
Consumer Decision Making Process A key factor in successfully marketing new/existing products or implementing a product Extension is a thorough understanding of the motivation, learning, memory, and decision Processes that influence consumers purchasing behavior. Consumer purchasing behavior theories have found their way into managerial decision making to help companies more effectively develop and launch new products, segment the market, determine market entrance and in brand management. Therefore, a better understanding of how consumers decide what to purchase is critical to the success of a product. There are numerous theories and models describing the consumer purchasing decision process.
In today’s competitive world where organizations looking for high profitability and market share, consumers have very important role. Companies are looking for capture consumers in order to get larger market share. For this reason organization developed a number of techniques and tools. One of such tools is consumer behavior which has been come from economic theory. Consumer behavior is mainly studying the factors and situations that can affect purchase decisions of consumers. Consumer behavior is being very important discipline of management sciences which help out to understand of customers’ decision making.
Motivation and emotion are usually viewed as two psychological features that seemingly share cause-and-effect relationship. We often see motivation as something that stimulates a person to act and behave to achieve a desired goal, while emotion is the feelings that emerge from the motive or drive itself, from the actions caused by the motive and from the achievement or failure of the desired goal. However. Motivation has been defined in different ways over the years, but a common component of the different definitions is that motivation is a force that energizes, activates and directs behaviour. In 2006, Franken defined motivation as the “arousal, direction and persistence of a person’s behaviour”. Motivation has been defined in various ways
In the domestic condition, a study was conducted at Cebu, Philippines with regards to the factors that affect the buying decision of consumers. The researchers found that couples took a planned purchase decision on household needs which took favor of the children’s needs. This joint buying decision improved the couple’s relationship since it requires communication and consultation with all the members’ preferred brand (Salas, 2011).
According to the customer value triad theory by Earl Naumann, “value is a combination of quality, service and price” (Naumann, 1995). In this case quality could be defined as performance quality, the objective quality of a product (Kotler & Keller, 2012). A product with high performance quality, increases the value of a product. The value of a product is furthermore positively influenced by the service that is delivered (Kotler & Keller, 2012). The price however, can both positively and negatively influence the value of a product. A high price will in most cases decrease the value, but for some exclusive and luxury goods, a high price increases the value. The exclusivity, which is of intangible nature, is than one of the most important determinants of the value of the product. For most normal goods however, the objective quality is the prime determinant of the value. Although intangible benefits can be important in determining the value of a product, in most cases it is still the tangible benefits and costs, the objective quality and the price.
Suppose there are two goods 'x' and 'y' on which the consumer has to spend his given income. The consumer’s behavior is based on two factors:
Quality is any aspect of the product, including the service included in the contract of sales, which influences the demand curve, R.Dorfman & P.O.Steiner (1954). For this research the researcher has used three elements that are, freshness of the product and variety & availability of the product, as these elements helps the hypermarket to server different kind of taste and preference to their
Consumer behavior eventually leads to the decision or choice between alternatives. In most cases it is a decision whether to purchase, consume or use a service. The process of this decision making is rather complex and it is influenced by, other than the price factor, the psychology of the consumers, their socio-cultural environment & the past experiences. The consumer decision making can be modelled as a system operating with an Input or stimuli, the actual decision making Process which then results in a reaction or Output (Schiffman. L.G, Kanuk. L)