Good Example Of Dissertation On Economic Person – A Rational Person, Who Makes Decisions Based On Price And Benefits Of The Product.
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CHAPTER 2: REVIEW OF LITERATURE
2.1 CUSTOMER BEHAVIOR
Throughout the history of selling goods, there have always been specialists, today known as marketing experts, who have been trying to understand the behavior of consumers. It has always been interesting to them, as by analyzing behavior of people buying their products they could understand the demand and reach better results and profit. In the past, they were closely studying the factors and aspects of the consumer behavior at the stage of selling goods to them. Still not a long time ago this analysis was consistent and enough for the analytic purposes. However, today markets change, becoming more global, and there is often such a situation, when marketing decision makers become isolated from the customers.
Therefore, marketing specialists are studying common features of consumer behavior to have better understanding of their clients (Kotler et al., 2008, p. 238). Daniel (1998) indicated that consumer’s behavior explains how consumer makes decision about purchase and also includes the analysis of factors that influence decision making in the process of purchase. According to Kotler et al. (2009, p. 224), “Consumer behavior is the study of how individuals or groups buy, use and dispose of goods, services, ideas or experience to satisfy their needs or wants.”
Today organizations are taking serious marketing measures in order to influence decisions of consumers, but even in such circumstances, it is difficult to guarantee positive results. Armstrong (1991) urged that prediction of consumer behavior is difficult, as it is formulated by different variables. Moreover, these factors and aspects are different for various categories of customers and for various countries. Consequently, for every country and set of traditions and customs, there should be made separate analyses that would allow studying customer behavior and using it for marketing purposes.
Kotler et al. (2008) build up a model of consumer behavior as shown in Figure 1 in order to understand how consumers respond to different market stimuli. The model begins with marketing and other stimuli, which drive the consumer into his ‘black box’ and produce certain reactions, such as product choice, brand choice, dealer choice, purchase timing or purchase amount.
Figure (1) Stimulus-response model of buyer behavior (Source: Kotler et al., 2008).
The stimuli unites marketing aspects (4P) – product, price, place and promotion – with other forces and events in the buyer’s environment, which are economic, technological, political and cultural. These stimuli enter the buyer’s black box and turn into a set of observable buyer responses. Consequently, marketer decision maker wants to understand how the stimuli are converted to response inside consumer’s black box. It depends on the decision-making process and the level of involvement that the consumer has as a component of his buying behavior.
2.1.1 Individual Decision-Making Process
When analyzing consumer behavior, it is necessary to take into account the fact that all consumers go through different phases within the decision-making process until attaining to the purchase decisions. Different researchers have analyzed this process and drawn their own conclusions considering it. Jobanputra and Kuldeep (2009) stated that customer behavior includes the process of recognizing needs, finding way to solve them and making the purchase decisions. Solomon et al. (2013) explained that consumer decision-making goes through different stages, such as problem recognition, information research, evaluation of alternatives, product choice and outcomes (see Figure 2).
Figure (2) Stages in consumer decision-making (Source: Solomon et al., 2013).
Kumara (2007) defined decision-making as the process, wherein buyer decides to purchase a certain product from several obtainable alternatives, where the process of primary and final selection is known as buying decision-making. He highlighted that individual consumer’s antecedents, such as his motivation level, personality, perception, learning and attitude, internally influence consumer’s decision-making regarding purchase. Moreover, consumer decision-making comprises need recognition, pre-purchase search, and evaluation of alternatives. The economic and expectation of decision play an important role when customer decides to buy a particular product.
Victor Vroom defining expectancy theory examines motivation through the perception of what a person believes will happen (Kermally, 2005). Kumara (2007) suggested that the purchase decision is affected by psychology of the buyer, who can be classified as economic, passive and cognitive person:
Passive Person – submissive to self-interest and influenced by promotional efforts of marketers.
Cognitive Person – studies service/product attributes actively and rationally.
In the telecom industry, consumer’s buying behavior starts with problem recognition, when a consumer feels he/she wants to communicate with another person through the cell-phone. Mobile telecom operators are using different marketing strategies to stimulate this problem recognition in consumers in order to boost their sales. At the same time, consumer uses the stage of information research, where he/she collects information about the mobile telecom operator via different resources, such as website, friends, social networks, etc. Then, he/she compares products’ attributes and chooses certain mobile telecom operator. Upon completing these steps, consumer buys mobile SIM card from the chosen operator.
2.1.2 Consumer Involvement
Solomon, Bamossy, Askegaard and Hogg (2013) defined involvement as a person’s perceived relevance of the object based on their inherent needs, values, and interests. They pointed out that consumer’s level of interest in product identifies the level of involvement in it. Therefore, not all buyers follow particularly the same decision-making stages. Sometime, consumers fall in impulse buying behavior, when he/she is buying products without any planning.
The level of product/service involvement differs from one consumer to another. When having a high level of involvement with certain products/services, he/she is motivated by a small amount of information. Consumer personal impotence and interest determine the level of consumer involvement in buying a product/service. Products, which are cheap and have low risk for the buyer, have low involvement. John et al. (2010) stated that a consumer usually has an automatic purchase decisions based on limited information or data that they have gathered in the past.
In contrast, products with high involvement are expensive, carry a high risk to buyers and are complex. Consumers do not purchase these products very often. Therefore, consumers do not engage in routine response behavior. However, they engage in extended problem solving, where they spend a lot of time comparing the features of the products.
Regarding mobile telecommunication companies, consumer’s high personal interest has high-involvement character, because telecommunication mobile service is very important, expensive, complex, and involves high risk and liabilities. Scholars have built the conceptualizing components of involvement shown in Figure 3, which explains the relationship between antecedents of involvement and its possible results.
Figure (3) Conceptualizing components of involvement.
Scholars have found out that consumer involvement consists of three major components - input, process and output. Kumra (2007) explained input factors as external factors, which influence product-related values, attributes and behavior of the buyers. On the other side, the activities of marketing mix and social culture inputs are the factors that influence consumer’s purchase decision to purchase a specific product or service. On the other hand, decision-making is very complex, especially when there are involved products and services, as there is social culture that includes social class, culture, culture, sub-culture, recognition, information and opinion of other users that are considered in the purchasing decision.
2.2 FACTORS EFFECTING CONSUMER BEHAVIOR
For marketing specialists, it is vital to understand customer’s motivation and behavior in the sphere of buying products and services in order to tackle the right target and choose the right direction for development. Marketers want to understand what the buyer’s characteristics are that influence the way consumers perceive and react to marketing and other stimuli. According to Kotler et al. (2009), the purchase made by consumer is influenced by cultural, social, personal and psychological characteristics. Figure 4 below represents these factors in details.
Figure (4) Factors Influencing Consumer Behavior (Source: Kotler et al., 2008).
In every group of factors presented above, there are sub factors, which can be analyzed when trying to understand the consumer behavior. For example, among the cultural factors, there are culture, subculture and social class of the person. It means that the cultural group to which the customer belongs is sure to influence his/her buying behaviors and should be taken into account by marketing specialists. The same can be said about the social group of factors. Among such factors, there are reference groups, family and person’s roles and status. Among the personal factors influencing buying behaviors, there are age, occupation, economic situation, lifestyle, as well as the type of personality and self-perception. The last group of factors, which is psychological, unites motivation, perception, learning and beliefs of the person. All of these factors represent a valuable data set for each marketing expert trying to analyze consumer behavior.
2.2.1 Cultural Factors
Culture and Subculture
Culture combines values, perception and behaviors that a member of society learned from family and other institutions (Kotler et al., 2008). These cultural factors deploy significant influence on consumer behavior. The cultural factors include culture, subculture and social class. Cultural factors have major influence on customers’ wants and tend to guide their general behavior. Each culture contains subcultures with shared value systems based on common life experiences and situations. These shared value systems can be conditioned by ethnicity, gender, age, religion.
In an article dedicated to how shopping along with other factors influence precipitate purchasing, it was suggested that culture affects the association between the trait of buying impulsiveness and impulsive buying behavior at the cultural grouping and individual difference levels (Luo, 2005). The study found that Asians engage in less impulsive buying behavior due to trait of buying impulsiveness that is not brightly manifested by representatives of this culture.
Natalija (2013) has found remarkable results regarding how consumer subcultural dimensions of Baltic (Latvia, Lithuania) and Russian people influence line purchase behavior. Each subculture has different behavior, although it was on line purchase. The research has shown that marketers have to meet the needs of subcultural differences and localize offers to thrive in marketplace and reach the desired results.
In 2014, academics explored how national culture influences teenage shopping behavior on the example of comparison between French and American consumers. The study highlighted that culture influences shopping behaviors of both French and American teenagers. It also discovered that French teenagers focused on assimilation and incorporating peer information and influence in shopping, while American teenagers sought both assimilation and uniqueness (Gentina et al., 2014).
Religion is another important element, which influences consumer behavior in the area of taking purchasing decision, which was proven in a study conducted by Siali (2013). In particular, there was demonstrated how religious belief of a person can be deeply ingrained in his/her consciousness and how completely can a person be devoted to the words and opinions of their religious leaders. Often such leader’s influence cannot be questioned and people believe everything that they hear from such leaders. This research along with others described above shows that there are great opportunities for marketers in subcultural groups.
Social class represents relatively permanent and ordered division in a society, whose members share similar values, interests and behaviors. It is founded based on education, occupation, income and wealth (Kotler et al., 2008). Scholars believe that social class determines the amount of consumer’s expenditures and the market itself. It influences consumer‘s purchasing behavior more obviously when the item of interest belongs to luxurious area or is visible to others (Solomon et al., 2013).
Frederick (1971) studied the effect of social class on brand loyalty in the case of automobiles. The results were significant, as he found that lower class consumers tend to display greater brand loyalty than middle and upper class ones. In addition, the research found that buyers of lower occupational prestige class had a higher repurchase probability, than an average buyer. At the same time, middle-class consumers had a lower than average repurchase probability. Owing to these researches, we can understand that it is very important for the marketing decision maker to pay attention to culture, subculture and social class characteristics in each community.
2.2.2 Social factors
According to Solomon et al. (2013), consumer’s physical and social environment influence considerably consumer’s purchase decision. Kotler et al. (2008) also states that consumer’s purchase decisions are affected by social factors, which include group, family, social roles and status. Below each of these components will be considered in detail.
Person’s behavior is formed under the influence of group, to which he/she belongs by membership, reference or aspiration (Solomon et al., 2013). Membership group, to which a person belongs, is directly influencing his/her behavior, including the buying one. Some groups have continuous and informal interactions, and they are called primary groups, such as family, friends, neighbors and co-workers. On the other hand, there are groups that have formal and less regular interactions, which are called secondary groups. They include religious, professional and trade union groups (Kotler et al., 2008).
Reference group is defined as “an actual or imaginary individual or group conceived of having signiﬁcant relevance upon an individual’s evaluations, aspirations, or behavior” (Solomon et al., 2013). It works directly (face-to-face) or indirectly, serving as a point of comparison or reference, which influences person’s attitude or behavior (Kotler et al., 2008). Reference group is formed according to age, work, hobbies, interest or some location. People in reference group who have special skills, knowledge, personality or other characteristics, exert influence on others and are called opinion leaders (Kotler et al., 2008).
Kansra (2014) examined factors affecting buying behavior of young consumers of branded clothes. The author discovered that the main factors, which influence young consumer’s desire to buy branded clothes, are product design, reliability and trust, social influence and discounts, brand name and fashion, status symbol and uniqueness. Moreover, there is association between age, marital status, occupation, education, income and buying of branded clothes. On the other hand, there is no connection between gender and education in the issue of buying branded clothes.
Gremler and Brown (1996) pointed out that loyal customer can be seen throughout different activities, such as the customer’s recommendation of service providers to other people, or their commitment to a preferred service provider. A group has the highest influence on purchase decisions in public luxuries products and brands, such as golf clubs, snow skis and yachts (Bearden and Etzel, 1982). On the other hand, the results support hypothesized differences in reference group influence publicly and privately consumed products, as well as luxuries and necessities.
Parents pass values about consumption to their children and mostly determine the information sources for them. Moreover, they provide family’s member with an “orientation” toward religion, politics (Kotler et al., 2008). They give family’s member the sense of personal ambition, self-worth and love, which in latter stages of life influence the buyer’s behavior. Expenditures of the family are affected by different factors, such as the number of people in the family, their ages and the family income (Solomon et al., 2013). Moreover, the question of expenses in the family depends on such factors as interpersonal needs, product involvement, utility responsibility and inﬂuence power.
Each member in the family has different level of influence and inclement in the common expenditures. There was a study conducted on the social factors that influence the buying behavior of personal care products. It found that family influences purchase decision of different categories of beauty soaps, fairness creams, shampoo, henna, hairoil, and kajal brands. However, friends were found to be the main influencing social factor in purchase of face wash, eyeliner and nail paint brand (Sudhakar, Raniand and Suchitra, 2012). In addition, wives have considerable influence on their husbands, as they are the key part in family decision making when determining the household (William, 1984). Moreover, children have a strong influence on family buying decisions. According to Akinyele (2010), children have a high influence on family decisions in relation to products that are used on them. The author showed that children are more influential on time, place and product itself. Similarly, Budzanowska (2011) studied social conditioning of purchasing decisions of 9-11 year-old consumers. The study highlighted that purchasing decisions were influenced by social factors. The parents’ opinion was the most important for children in purchasing decisions. In addition, the study showed that children perceived parents to have the most impact on decision making with variation depending on the patterns of communication in the family and on the particular social factors or types of products.
However, low expense or price has different meaning for customer. Wong, Tsaur and Wang (2009) have highlighted that expected service quality could not be improved more by the provision of a service guarantee, as the higher price signals good service quality (Wong, Tsaur & Wang, 2009). On the other hand, full satisfaction guarantee increases customer’s willingness to purchase services. Their study suggested that “A lower-price service is expected to be poor in service quality and is perceived as more of a performance risk”. Moreover, Yuan and Han (2011) have stated that expected price has a great impact on consumer’s research behavior, as “consumers decide whether to continue searching by comparing their price expectations and observed current period prices”.
Roles and Status
The role is defined as the activities a person is expected to perform according to opinion of the people around him/her, where status is the general esteem given to a role by society (Kotler et al., 2008). People can play different roles depending on situations and responsibility. For example, the role of Anna is daughter in the company of her parents, she plays the role of wife in her own family and the role of brand manager at work.
According to Roberts, Manolis and Pullig (2014) contingent self-esteem increases compulsive buying behavior, as it is fully mediated by fear of negative evaluation and social identity. People who have such fears are easier to be persuaded that they need some good or service, as they have externally conditioned buying behavior. In the case of people more independent from the opinion of people around, the risk of compulsive buying behavior development is much lower.
2.2.3 Personal Factors
The buyer’s age, life-cycle stage, occupation, lifestyle, economic circumstances, personality and self-concept, defined as personal factors influence his/her decisions regarding buying goods and services. Each of these factors can successfully be used by marketing experts in their work when defining the customer behavior.
Age and Life Cycle
Solomon et al. (2006) states that consumers in different age groups have varying needs and desires. People in the same age share a set of values and common cultural experiences that they carry during lifetime. Therefore, they change the goods and services they tend to buy (Kotler et al., 2008). In addition, family life cycle, which families pass through over time, is shaping their buying behavior. Sometimes, even when the life cycle remains the same, lifestyle or psychological factors change. The shopping behavior is changing during family life cycle.
In the study on family life cycle differences for shopping, Leeona and Borleen (1990) found that younger adults were more brand conscious, than the older representatives were. In addition, people in older life cycle stages read more than people in younger stages. Moreover, they found that single parents purchased the product because they did not own it, older families were replacing it, and retirees wanted new product characteristics. According to this study, we can determine that each age group has very different needs and wants, which should definitely be taken into account by marketers.
According to Kotler et al. (2008), a person’s occupation affects goods and service he/she buys. Consumer’s desires and decisions are defined to a great extent by what he/she does for a living, and occupational prestige is one way to evaluate the ‘worth’ of people (Solomon et al., 2006). In a study of demographic effect on consumer behavior, Kumar (2007) has found that the level of education, occupation and family income significantly affect the consumers' repurchase behavior.
Consumers who have a considerable amount of money and resources are a target for some marketers who are charging high prices for their products (Kotler et al., 2008). The economic situation of any person will affect his/her purchase decisions. In the same relation, Himanshu, Arul and Dhananjay (2010) investigated how salary receipt affects consumers' regulatory motivations and product preferences. In particular, they found that the best time to promote products or messages with a promotion appeal is near consumers' last salary receipt. The best time to promote products or messages with a prevention appeal is far from consumers' last salary receipt. This tendency illustrates the importance of economic circumstances in consumer purchase behavior.
Lifestyle of people who come from the same subculture, social class and occupation are not the same. According to Kotler et al. (2008), lifestyle is a person’s pattern of living as expressed in his/her activities, interests and opinions. This pattern of consumption reflects person’s choices of how he/she spends time and money, as well as the attitudes and values attached to these behavioral patterns (Solomon et al., 2006). Kotler et al. (2008) point out that there is a measuring technique for lifestyle called psychographics. It consist of three dimensions, which are activities, interest and opinions. Figure 5 shows the dimensions used in psychographics to measure lifestyles.
Figure (5) Psychographics Dimensions (Source: Kotler et al., 2008).
Personality and Self-Concept
Each buyer has a unique personality that influences his purchase behavior. The personality is defined as a “person’s distinguishing psychological characteristics that lead to relatively consistent and lasting responses to his or her own environment” (Kotler et al., 2008, p. 253). Moreover, the self-concept is the mental picture that people have about themselves. The self-concept is composed of many attributes, some of which are given greater emphasis, when the overall self is being evaluated (Solomon et al., 2006).
On the other side, a study about influence of demographic factors on consumer impulse buying behavior, conducted by Bashar, Ahmad and Wasiq (2013), found that disposable income and age are related to most impulsive buying indicators and the impulsivity collective indicator. Educational qualification and gender shape minimal association with impulsive buying behavior.
John et al. (2010), linked consumer’s personality to the “Big Five” that discusses personality from the following aspects:
Openness: Degree of consumer is open to new experiences.
Conscientiousness: How diligent consumer is.
Extraversion. How outgoing or shy the buyer is.
Agreeableness. How easy the consumer is to get along with.
Neuroticism. How disposed consumer is to negative mental states.
2.2.4 Psychological Factors
Consumer behavior can be influenced by psychological factors that include motivation, perception, learning, beliefs and attitudes. The motivation is a need, which pressures person to satisfy it (Kotler et al., 2008). Scholars proposed that customer exerts more effort when he/she is motivated to make use of certain products/services. Motive is the inner strength, which creates a need or desire, encourages and makes a person act. For example, the increase in the number of thefts generates the need for security and motivates the purchase of services for the protection of home. Motives of consumers may be in different ratios to each other and the external circumstances that strengthen or weaken each other, engage in mutual contradiction and conflict with the objective possibilities of implementation of the action (e.g., purchase). Therefore, motivation is formed as the process of encouraging the person to commit certain actions and deeds, which often requires the analysis and evaluation of alternatives, choices and decisions (Soyez, Francis & Smirnova, 2012). As practice shows, sometimes people do not realize what the real motive of purchase is. However, establishing and consolidating contact with the buyer, you should find out exactly what motives are of great importance for him/her.
The most common motifs for purchase are benefit, health, prestige, comfort and desire. Let us view consistently the essence of certain motives of purchase of goods or use of services.
1. Benefit - most common motif is expressed in an effort to save money, or, conversely, earn with purchased goods.
2. Health. Care about health contributes to the survival and success in the career, as well as in the personal life (Liao et al., 2012). Healthy people have a much greater potential in almost all areas of activity and therefore are willing to pay big money for the opportunity to restore and maintain their health.
3. Prestige in the modern life is one of the most powerful incentives, although people often do not recognize that they are buying goods for the sake of prestige. It is known that there are things that emphasize status, prestige of the owner, as the welfare of the people can often be judged by the subjects that surround them (car, watches, pens, apartment, clothes). When discussing the price with such buyer, guided by such motives, it is necessary not to focus on the cheapness of the goods – it will just scare him. In this case, it is better to emphasize the dignity of goods and solidity of purchase.
4. Comfort. Urge to physical comfort in varying degrees exists in virtually any human being, as something close to a sense of security. It is advisable to give the buyer feel of those benefits that are mentioned by the buyer in terms of comfort. It should be borne in mind that comfort is created not only by the products, but also by after-sales service (Soyez, Francis & Smirnova, 2012). You must tell the buyer of the service in the after-sales period in more detail.
5. Desire is a very attractive incentive for the purchase of a product. If the buyer does experience a real desire to have your proposed product, he agrees with the price.
Classification of motives (Donnelly, Ksendzova & Howell, 2013):
Rational motives – Profits or savings, risk reduction, convenience, quality.
Emotional motives – Personal ego, power of knowledge - to follow the fashion, the desire to be accepted in society.
Depending on what the motives are of priority, there distinguish several theories of motivation of consumer behavior (Krishna, 2013). Maslow developed a theory about human motivation, which suggested that every person tries to satisfy the most important needs first. Figure 6 shows Maslow’s hierarchy of needs.
Figure (6) Maslow’s hierarchy of needs (Source: Kotler et al., 2008).
It is based on the premise that people are mostly not aware of psychic forces that govern the behavior of the individual, which means that they are not able to fully understand the motives of their actions (Liao et al., 2012). From the practical point of view, this theory of motivation is of limited value, because its use is associated with significant financial and time costs. To elucidate the underlying associations caused by the goods, the researchers conducted in-depth interviews, using a variety of techniques: word association, incomplete sentences, explaining the drawings and role-playing games. In addition, it often leads to contradictory conclusions, since one commodity attracts buyers for various reasons (Kumar & Dange, 2012).
Herzberg's motivation-hygiene theory
Based on a combination of two polar factors of motivation, one of which annoys the person, and the other - satisfies. According to this theory, in order for purchase to take place, there is not enough to have absence of grievances – it requires the active presence of the factors of satisfaction (Donnelly, Ksendzova & Howell, 2013). The practical value of the motivational theory lies in the possibility to compare competing products by a set of motivating factors in order to determine the competitiveness of goods. In practice, the theory of two factors is used in two ways:
1) The seller must avoid the appearance of grievances. Such things do not contribute to sales growth, but also can rip the purchase.
2) The manufacturer must identify the main factors of satisfaction or motivation to buy the goods and ensure that their presence in the goods has not gone unnoticed by the buyer.
Kotler et al. (2008, p. 255) defined the motive as “a need that is sufficiently pressing to direct the person to satisfaction of the need”. On one side, people are motivated by biological needs, such as hunger or discomfort. On the other side, people are driven by psychological needs, such as recognition, esteem and belonging. In analyzing the effects of motivation on purchase decision, Jalalkamali and Nikbin (2010) found that only internal stimuli have positive effect on purchase decision for cosmetics products.
Townsend and Sood (2012) conducted a study about self-affirmation through the choice of highly aesthetic products. The research discovered that product choice could lead to self-affirmation. People have different motivation elements, which are reflected in their buying decisions. For example, risk reduction and social demonstration are the motives that encourage people to buy branded items in Czech Republic, China, Ghana and Sri Lanka (Asamoah et al., 2011). Similarly, in a recent study on investigation of the motivations behind impulse purchase behavior of Algerian women shoppers, which was conducted by Amel, Maachou and Elyas (2014) concluded that hedonic desires influenced shopping enjoyment among women shoppers. On the other hand, an empirical investigation about factors influencing impulse buying of sports team merchandise in developing country performed by Salman, Khan & Aly Gul (2014) claimed that shopping enjoyment was not directly related to impulse buying, but had certain pathways that led to it. According to the research, sports fans motivation of buying depended on money availability, in store display/marketing efforts. Moreover, fan identification are promoting factors to shopping enjoyment, which lead to impulse buying.
Internal influence is formed in the mind of human. The same events can cause different reactions and emotions (Floh & Madlberger, 2013). They are: fear, anger, joy, sadness, disgust, anticipation, surprise. Emotions are basic subjective experiences, expressing opinions of significance for the individual factors acting on it and is expressed primarily in the form of immediate experiences of satisfaction or dissatisfaction with the current needs. As a result of generality and specificity of emotion, there is formed their distinctive appearance - a sense of acting as a sustainable experience associated with the representation or the idea of some object. Feelings are substantive in nature (Kumar & Dange, 2012). Special about feeling is that they are improving and developing, making a series of levels - from direct to higher feelings related to spiritual values and ideals. Feelings perform motivating role: they are always associated with the work of consciousness, can be arbitrarily regulated, although this is not always done without difficulty. Another form of emotions are affects presenting very strong emotional experiences associated with active behavior to resolve the emergency.
The necessary conditions for the emergence of emotions are availability of needs and knowledge about the features of this situation in terms of opportunities to meet them (Floh & Madlberger, 2013). Today, manufacturers of goods and services are increasingly thinking about how to capture the emotions of consumers, cause the buyer a sense of the uniqueness of his proposed product. Acting on all five senses: sight, hearing, smell, touch and taste, but rather on human emotions, manufacturers, through the stimulation of sensory perception, are trying to deliver a person aesthetic pleasure, excite, delight with beauty, help experience the satisfaction or vice versa - to attract attention through disgusting, asymmetrical or sharp perception.
Perception is how we understand the world around us, perceive impulses coming from the environment in the form of sound, light, flavor, etc. The same set of pulses coming through the senses (eyes, ears, nose, skin, mouth) may be perceived differently by different people. As consumers decide to purchase services, based on their perception of the need to strive to create a positive perception of their services in the minds of consumers (Kumar & Dange, 2012).
The location and shopping atmosphere has direct influence on the consumer’s psychological behavior. In testing behavioral hypotheses using an integrated model of grocery store shopping path and purchase behavior, HUI, Baradlow & Fader (2009) found that when consumers spend more time in the store, they become more focused. Therefore, they are less likely to spend time on search and more likely to shop/buy. Moreover, after purchasing virtue categories, consumers are more likely to shop at locations that carry vice categories. In addition, the presence of other shoppers interests consumers toward a store zone, but reduces consumers' trend to shop there.
An article linking salesperson’s behavior and consumer's purchase decision (Punwatkar & Verghese, 2008) discovered soft skills of a salesperson that influence the consumer’s purchase decision. The skills included emotional intelligence, ethical behavior, listening ability and relational skills. Sometimes consumer’s buying behavior is influenced by perceptions, which are defined as the process, where the information is selected, organized and interpreted to form a meaningful picture of the world (Kotler et al., 2008). On the other hand, people have different perceptions of a certain products/service. Therefore, we notice they are different in their purchasing behavior.
Wrong perceptions may cost company lots of money. J.D. Power and Associates (2014) have published a report in the U.S on the results of wireless retail sales satisfaction. They pointed out that "retail outlets that set the proper expectations and do not oversell the product or service generate significantly higher ratings and, more importantly, increase the likelihood of repeat purchases.”
Donnelly, G., Ksendzova, M., and Howell, R. T., 2013. Sadness, identity, and plastic in over-shopping: The interplay of materialism, poor credit management, and emotional buying motives in predicting compulsive buying. Journal of Economic Psychology, 39, pp.113-125.
Floh, A., and Madlberger, M., 2013. The role of atmospheric cues in online impulse-buying behavior. Electronic Commerce Research and Applications, 12(6), pp.425-439.
Krishna, A., 2013. Customer sense: how the 5 senses influence buying behavior. Palgrave Macmillan.
Kumar, V., and Dange, U., 2012. A Study of Factors Affecting Online Buying Behavior: A Conceptual Model. Available at SSRN 2285350.
Liao, S. H., Chu, P. H., Chen, Y. J., and Chang, C. C., 2012. Mining customer knowledge for exploring online group buying behavior. Expert Systems with Applications, 39(3), pp.3708-3716.
Soyez, K., Francis, J. N., and Smirnova, M. M., 2012. How individual, product and situational determinants affect the intention to buy and organic food buying behavior: a cross-national comparison in five nations. der markt, 51(1), pp.27-35.
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