Tag: Consumer

  • How to Group Influence on the Consumer Behavior?

    Learn and Study, How to Group Influence on the Consumer Behavior?

    Each consumer in society is a member of different groups depending on their culture, various subcultures or even social class can influence their consumer purchase. A group can be formed when two or more individuals share a set of norms and beliefs. A group becomes a reference group when an individual recognizes with the group and takes on many of the values, attitudes or personal standards of group members and use it as the base of his/her day to day behavior. A reference group is defined as having significant relevance upon an ‘individual’s evaluations, aspirations or behavior influencing the consumer. Also learned, Power of Dreams, How to Group Influence on the Consumer Behavior?

    The nature of reference group influence can take three forms, this is because some groups and individuals are able to influence greater than others and affect a range of consumption.

    #Informational influence:

    This is when the reference group is used as a knowledgeable source in the different parts of the buyer’s decision process. This type of influence emerges when an individual or the member uses the behaviors and beliefs of the reference group as dependable sources. This influence is based either on the similarity of the buyer’s desires with the ones of the group members. For example in the biker subculture, the members all share similar desires for purchasing Harley Davidson products therefore influencing the individual decision process in selecting certain products. The members in baby boomer subculture are also likely to purchase similar latest fashion products.

    #Normative influence known as (utilitarian influence):

    The reference group creates a level of values and norms of an individual, in the process of purchasing brands or products. For example, both the Harley Davidson biker subculture and baby boomer subculture will have an influence on the member’s decisions on which types of products to a consumer to fit in with the values and attitudes of the subculture. Harley Davidson subculture values can affect the characteristics of the member’s lives such as their ‘social, political and spiritual’ aspects.

    #Identification influence known as (value-expressive influence):

    The reference group is used to confirm the consumer’s attitudes, norms and actual behavior. The individual behaves reliable with the group’s norms and beliefs because the individual’s and the group’s norms, attitudes and beliefs are the same. For example, this can be seen in Harley Davidson subculture in which the members view the subculture as a ‘religious icon’ sharing the same values and norms as other members.

    The group’s power of influence on consumer’s behavior will depend on a number of factors. For example degree of visibility of the product or trademark used by the group members. The group’s power of influence is higher for the products used visibly such as shoes, cars and fashion products compared to non-visibly products. In the Harley Davidson subculture, their power to influence other members is through visible displays such as tattoos and motorcycle customization, this is done to emphasize the commitment to the group. The product’s degree of necessity for example the group’s power of influence is higher for the luxury products such as jewels, fashion etc and lower for necessity products. For example, the baby boomers subcultures are likely to influence other members in purchasing luxury products than necessity products.

    The group’s power of influence will depend on the individual’s degree of involvement for example if an individual is reliant to a group; it is more likely to conform to the group. The group’s influence will depend on the degree of confident of the buyer during the buying process. The group influence is noticeable when there are specialized products such as PC sets or mobiles. These are the products for which the buyer depends on the expert knowledge of the reference group. The influence of the reference groups is not influential for all types of products or services that consumers purchase.

    For example, products that are not complex, that are low in perceived risk are unlikely to be influenced by the reference groups. The impact of the reference groups can vary. Reference group might determine the choosing of a certain kind of product instead of others. It can further influence the option of a brand or trademark of a product such as Iphone or Blackberry. An individual will want to belong to a group because of their significance and position they obtain. They will want to be associated with groups that have an attractive social position. Due to the unique characteristics, certain groups are seen to have a greater social power influence than other groups.

    Groups have power due to their ability to influence individuals to become members. The group’s ability to influence the behavior of various individuals that are members or non-members of the group is called social power and can have a number of types. These social powers can influence the consumer behavior in buying certain products and brands. Research found that reference groups are very important for marketers. This is because they can influence and inform members to purchase specific products and brands. It can provide the members with factors to compare with their own values, with the values and behavior of the group. This can therefore influence the members to adopt the groups’ values and attitudes

    Group influence is “non controllable” by the marketer but must be taken into consideration when designing new products. The marketer will need to seek out to understand all the group influences that affect consumers so that the marketing mix can be adjusted to give the maximum effect. Consumer behavior is greatly influenced by cultural, social, personal, and psychological factors. Culture is the most fundamental determinant of a person’s wants and behavior. Culture contains smaller subcultures or groups of people with shared values systems based on common life experiences and situations. These subcultures can influence the consumer behavior. Subcultures include nationalities, religions, racial groups and geographic regions.

    Age subculture (age cohort) is an example of how consumers cultural bond with each other. This is because these consumers are more likely to face similar experiences and share common memories by growing up and living in the same time frame. Many subcultures make up important market segments and marketers often need to design products and marketing programmers’ tailored to their needs and want. For example the automobile industry are taking on the baby boomer subculture market and dealing with boomers changing needs in the industry. Toyota’s campaign of the redesign of the new Avalon was to provide a youthful image that reminds the baby boomers of the late 1960s.

  • Explain Dimensions of Price Perception

    Explain Dimensions of Price Perception

    How to Explain Dimensions of Price Perception?

    The price perception is directly related to the success of the company. Although in the end what customer pays is the reality but how it reaches at his decision is what is dependent on the perception. Definition of Price Perception, Because the company is successful in creating the desired perception of the product only then the customer will consider buying it. Hence, it is the price perception that precedes the buying decision of the customer.

    This is why price perception is among one of the most important factors while crafting the advertising strategies of the company. For a successful advertising strategy, it is very important to read the minds of the customers.

    The concept of price perception helps to understand those psychological factors which are in the minds of the customers and form which they make their purchasing decisions. Understanding the factors by which the seller can influence the perceptions is very important for the companies in order to attract and retain customers.

    This can help them to determine the pricing strategy that will ensure their competitiveness in the market and thus, superior financial returns. Role of Price Perception in Consumer Buying Process.

    The key dimensions of price perceptions are listed below:

    Price-Quality Relationship

    The impressive research done in pricing is about the consumer’s quality perception and their quality of products. Consumers perceive price as the prime indicator to presume the quality of the product. Many consumers believe that high priced products attribute better quality and lasts longer. Thus, price signals the quality. The point is very vastly mention in the marketing literature. If prices are mark lower than the level of consumers paying capacity they conclude it to be of low quality. Improvements in quality of products can trigger the mind for the first time and can convert the consumer into a loyal consumer as well. The consumer psychology is also affect and at the end will also affect the market share. The price-quality relationships have not found in the western societies.

    Price-Consciousness

    It is defined as consumers’ degree of focusing for paying less in buying. The high price conscious consumers tend to do a lot of research work before buying that particular product. The economic theories have also indicated that price has the significant roles in buyers’ preferences. The buyers generally try to maximize their benefits while purchasing and price plays a influential role in their buying process.

    Value-Consciousness

    This concept follows the price quality evaluation of the consumer. It comprises of what a consumer get on behalf of what they have paid for the products or services. If consumer thinks that quality is less then what they have paid, they tend to get dissatisfies and henceforth stops purchasing that product. The vice-versa of the situation leads to turning them into regular or may be loyal consumer. Consumers who are capable of making this sort of evaluations are call “Value Conscious Consumers” They generally don’t mind paying higher prices if the quality of product justifies it.

    Price Mavenism

    This could be define as the consumers being experts about the lowest price stores and starts sharing the information by informing them. These consumers evaluate different aspects of product to justify it with the price bracket into which they are offer and compare it with other stores to get the best benefits out of it. The consumer’s socio-economic character, previous experiences and learning processes play an important role. The price information collect is shape by rational and emotional motives of consumers. These types of consumers are experts in the product information’s and thus may be call as ‘advisors’ by other consumers.

    Sale Proneness

    Sales influence consumers’ price perceptions significantly. The consumers generally evaluate their last purchases with the current ones. Sales, price discounts aim to increase the total sales and also create positive purchases evaluation. The best price evaluations can made during the sales or discount prices. Another research has also indicate that young consumers tend to be lesser influence by the sales as compare to those of the older generations.

    Prestige Sensitivity

    It is a psychological dimension. Consumers can perceive high price as positive and even as a negative. The high pricing of the product can be perceive as a way of losing the money. Consumers buying these sorts of products generally consider it as a part of their status. They tend to purchase on their emotional moves. A prestigious product is consider to be a symbol of wealth and living above standards. Prestige sensitivity is the factor behind the same and can happen because of difference of socio-economic characteristics of consumers. This concept can be use in developing high quality and distinct product image.

    Domestic-Foreign Product Sensitivity

    The product sensitivity amongst domestic-foreign product also plays an important role in price perceptions. The place of product manufacturing also influences the the buying behavior and hence leading to think upon the pricing being perceive by consumers as well. Thus this dimension is also necessary to be include into the consumers’ experience of judging the price. Brand recognition, effects the quality and price perceptions. Origin of country is also not untouchable by it and influences the consumer. The products from develop country are generally regrade as the high quality and costly. The domestic and foreign products are also view emotionally and symbolically. This dimension is unique to evaluate and hence included in describing price perceptions.

    How to Explain Dimensions of Price Perception

  • Role of Price Perception in Consumer Buying Process

    Role of Price Perception in Consumer Buying Process

    Role of Price Perception in Consumer Buying Process with Consumer Behavior

    The price perception has been one of the most important research issues on the consumer behavior for last many years. The concept of reference point is very important in this regard and efforts have been made in order to define it. Consumers establish their reference points according to their personal understanding, annotations, the existing knowledge of prices and their subjective interpretation. Why You Should Be Balancing Your Books on Every Single Month? Definition of Price Perception.

    The reference points are dependent of two factors: the kind of information i.e. external or internal and behavioral process of formation of references. The internal reference point comes from the consumer estimation of price in his mind. The two factors contextual and temporal are involved in this formation. The first factor is related to the perception of different prices within the same category of product while buying.

    The temporal factor depends on the past buying experiences of the customer. The importance of both these factors varies according to the customer’s characteristics. For instance, consumer who purchased the one product more frequently will remember its price more clearly and as a result temporal factor will be more important. External information comes from the marketing and internal form other sources.

    It means any message of the price consumer receives through external channel and which he uses to make comparisons. The seller can control the external information by the marketing efforts i.e. through advertising and some internal factors may be beyond their control. But the information must be credible so that the consumer can use it in making his assessment of the product.

    The external reference point can be the price suggested by the seller on the product’s packaging, or the brand which is more frequently purchased or the price of the dominating brand. The main aim of the external reference point is to increase the internal reference price so that customer perceive existing price as attractive and buy the product

    According to a research study, price perception is clearly more relevant factor in purchasing decision than reality. Research was conducted in five countries to measure the extent to which perception of price is important for retailers. Three factors were identified which are responsible for price perception.

    The first one is the clarity with which price is communicated, second is price communication on entry points and the third is overall environment. The research indicated the fact that the retailers who are perceived as more expensive than others are unable to compete effectively in the market.

    A study conducted on entry level price communication difference of Zara and H&M is a good example on price perception. According to the study, Zara was found to be 31% more costly than H&M, but the customers’ perception of this difference quite low as compared to the actual figure.

    This reveals the Zara’s ability to manage its perception through effective and clear communication of prices. They have been successful in portraying their prices as nearly equal to competitor but in actual their prices are relatively high. The magic of perception has worked really well in this case which reveals the importance of perception the consumers.

    Another classic example is the price perception of Argos which shows how they have been able to build their price perception that is better than reality. They have been able to communicate their price position in a way that results in a cheaper price perception than reality. Their advertising strategy was price centered along with prominent supply of low priced goods in order to create a cheap price perception of their goods.

    In this way, the have been able to portray themselves as low-priced as compared to competitors while the reality may be different. However, the company has to work continuously in order to maintain that perception. How To Make Your Small Business Stand Out? Many Ways You Can Try IT!

    Role of Perception in Consumer Behavior

    The perceptions consumers have of a business and its products or service have a dramatic effect on buying behavior. That’s why businesses spend so much money marketing themselves, honing their customer service and doing whatever else they can to favorably influence the perceptions of target consumers. With careful planning and execution, a business can influence those perceptions and foster profitable consumer behaviors.

    Influencing Perception

    Consumers continually synthesize all the information they have about a company to form a decision about whether that company offers value. In a sense, consumer perception is an approximation of reality, notes the book “Consumer Behaviour,” by Atul Kr. Sharma. Businesses attempt to influence this perception of reality, sometimes through trickery and manipulation but often just by presenting themselves in the best possible light. For example, advertisements often trumpet the quality and convenience of a product or service, hoping to foster a consumer perception of high value, which can pay off with increased sales.

    Reaching Consumers

    A key factor in influencing consumer perception is exposure. The more information consumers have about a product, the more comfortable they are buying it. As a result, businesses do all they can to publicize their offerings. Positive Relationships with Individual and Organization Outside, However, this causes a problem: When every business bombards consumers with marketing messages, consumers tend to tune out. To influence consumer perception, a business not only must expose its product to consumers, it also must make its product stand out from the crowd.

    Risk Perception

    Consumer risk perception is another factor businesses must take into account when trying to encourage buying behaviors. The more risky a proposition is, the more difficult it is to get consumers to act. If consumers aren’t familiar with a brand of product, they can’t assess the risk involved; it could be poorly built, for instance, or too costly compared to substitutes. Businesses can overcome this hesitancy by offering as much product information as possible in the form of advertisements or by encouraging product reviews. Allowing potential customers to handle the product in stores or test it at home also decreases risk perception, as does offering a flexible return policy.

    Customer Retention

    Successful businesses don’t relax once a customer makes a purchase. Rather, they continue to foster perceptions that result in profitable behaviors. Once consumers have tried a product, the task becomes maintaining a good reputation and establishing brand loyalty. Offering superior customer service is an effective tactic because it maintains the perception that the business cares about its customers’ best interests. In return, customers become loyal to the business, which secures a consistent revenue stream for the company and makes it more difficult for competitors to poach customers.

    Role of Price Perception in Consumer Buying Process with Consumer Behavior