A) Terms of Reference
On the 6th of October 2003, the management lecturer requested a report to be written investigating the influences of your own culture on your personal buying behaviour. Consideration and reflection should be given to regional, ethnic, religious, social influences, age, gender, household, social influences and any other relevant influences and identify how they would affect your purchasing behaviour. The report was to be submitted on the 11th December 2003.
The information was gathered using "textbooks" from the library, the Internet was explored, and class notes were also used.
C) Executive summary
Marketing is a vital contribution to any company; successful marketing should result in stronger products, happy customers and larger profits. Marketing is often confused with publicity, promotion and packaging, although there are other aspects that need to be taken into consideration within marketing. There are a number of individual influences and characteristics that will affect the purchasing behaviour of the customer.
Marketing dates back many centuries to when people produced crops that were surplus to their requirements and exchanged for other goods that they required.
It was the industrial revolution that introduced "mass production techniques and the separation of buyers and sellers to sow the seed of what we recognize as marketing today"1.
There are many definitions of marketing, the Chartered Institute of Marketing (CIM) claims that "Marketing is the management process which identifies, anticipates, and supplies customer requirements efficiently and profitably"2, while P Kotler believes "Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating, offering, and exchanging products of value with others"3.
For a company to succeed they must consider a number of different external factors that will influence their success. These factors are categorised in four main groups, Political, Economic, Sociocultural and Technological, sometimes referred to as 'PEST'. .
Appreciating the customers 'needs' is not sufficient, companies must also consider the marketing mix, otherwise known as the four 'Ps', which was defined by Borden (1964). Marketing involves developing the '4Ps'(see appendix 1). The "balance between these four should be maintained, or the marketing mix will fail"4. All these factors need to be considered to understand the customer's future needs and to develop the correct marketing mix.
Providing that the company has evaluated and analysed all of the above factors there is still no guarantee that customers will purchase the product. There are a number of individual influences and characteristics that will affect the purchasing behaviour of the customer.
1) Decision Making Process
A good company will recognise that the customer is the root to success and understanding the customers buying behaviour and what influences them to buy a product will be the key concept.
According to Kotler, the customer follows a decision making process before purchasing a product. The first stage is 'problem recognition', the customer recognises a problem, which could be a sudden urge or a slow dawning problem. The 'problem' can be triggered by an internal or external stimulus; the customer will know how to solve the problem from past experiences. At this stage, Kotler believes that "the task for the marketer is to identify the circumstances and/or stimuli that triggers a particular need and use their knowledge to develop marketing strategies"5.
The customer then progresses to the 'information search" stage, to look for a solution to solve the problem, this is divided into two levels. 'Heighten attention', where the customer is more receptive to information, and 'active' search, which will depend on the amount of information available and the strength of the customers drive. It is during this information search that the customer is influenced by external and internal factors, Kotler suggests that these factors come from four groups, Personal sources such as family and friends, commercial sources such as advertising, packaging and sales people, public sources such as mass media and experiential sources such as handling, using and examining the product. All of these influences combined together are a powerful decision making process. During the process the customer will be mainly influenced by 'personal' source, will discover many different options; research the pros and cons and different prices available to solve the problem.
Once they have gathered the required information the customer must evaluate the information collected. Each customer will be looking for a solution to the problem, and each of these products will have different attributes, which every customer will rate differently, according to their own personal requirements. The customer will also have a set of 'brand' beliefs surrounding the product, and the decision of which product they will purchase will be a combination of both the 'brand' and attributes. At this stage the company has a range of options to ensure that the customer chooses their 'brand'. They could modify the brand, alter beliefs about either their brand or a competitor's brand, alter the importance of the attributes or try shifting the customer's ideas.
The customer then progresses to make a decision on which product they will purchase, although there are some issues that may change between the purchasing intention and the actual purchasing of the product. There are some issues that may change between the purchasing intention and the purchasing decision. The customer may be influenced by a negative opinion of the product form a 'personal' source, or another purchase may be more important or simply changes in their financial position will prevent the purchase.
Providing the customer has purchased the product they will enter the final stage 'post purchase evaluation'. The customer will decide whether the product has satisfied their problem or not, this will then influence whether they will purchase the same 'brand' again, but also influence their opinion, which will be transmitted to other potential customers when they are at the 'information search' stage.
There are four categories in the decision making process, If a customer is intending to purchase an expensive item such as a car, they will undertake a complex decision making process, the information search will be highly complex and alternative brands will be taken into consideration, this is known as 'high involvement'. However, if the customer has purchased a similar item before then there will be little or no 'information search', as the customer choice will be repetitive and they will have brand loyalty. If the customer decides to purchase a product such as a biscuit, then Assael believes that this is 'low involvement', although the customer may still go through the decision making process but not as in depth; this limited decision process happens when the customer has little brand loyalty. The forth option is 'inertia' this is when there is low involvement and no decision making, the customers purchases the same brand, because it s not worth the effort to look for an alternative, Assael (1994)
For other researchers the customer progresses through the same decision making process, factors such as individual preferences, situational, group and the marketing mix influence the final decision. (Huntington et al 19986)
The acronyms 'AIDA' (see appendix 2) and 'DAGMAR' (see appendix 3) are other models that suggest a process that the customer follows before purchasing a product. Firstly, Attention, the customer is provided with information that creates awareness of a product, secondly, Interest, the customer becomes interested in the product and seeks further information, thirdly Desire, the customer has desire to purchase the product and finally Action, the product is purchased.
The motivational model separates the process into five sections, Primary, products that are purchased automatically and require no analyses, Selective, where a stimuli is important for choices, Emotional, where the decision making involves factors that are intangible and unpredicted, Rational where behaviour is clearly identified, and patronage when brand loyalty and repeat decisions are common.
The 'product adopter' (see Appendix 4) theory, classifies the customer into five areas, Innovators, early adopters, early majority, late majority and laggards, depending on when they purchase an item that is new to the market. Depending on the item and the cost, my personal choice varies within this model, if the item is a necessity, then I will purchase the item within the innovators stage, although I may be influenced by the price of the product (new product are normally expensive) and wherever possible I will wait for the price to drop.
It would be fair to suggest that individuals follow the decision making process in different sequences, depending on the cost that is involved, and effort needed to purchase an item.
The models have many of the same suggestions to the process of buying behaviour. Assaels, Kotlers and the 'motivational' theory have suggested stages where there is 'brand' loyalty. Around five years ago I was intent on purchasing a vehicle; there were issues that had to be taken into consideration:
* Four Wheel drive
* Ability to tow a horsebox
* Seating for up to seven people
I had previously owned a 'Landrover', and was satisfied with the performance it had provided me with, it was these factors that influenced me to visit the Landrover dealer and purchase another model. I did not take any other 'makes' into consideration, so during this purchase I would have fallen into these theories.
At present I am intending to purchase a 'camcorder', my knowledge of this product is very limited. On a number of occasions I have visited selected stores, Internet sites and also read various 'magazines' to provide me with more information on the product. During the visits to the stores I have nearly purchased a camcorder, although not being completely satisfied with the information and knowledge that I have gained, reverted back to the 'information stage'. This example corresponds with Kotler's theory, where I have 'revisited' the different stages at various times.
Another purchase that I made was again within Kotler's theory. The 'vacuum cleaner' that I was using had insufficient power to remove the 'dog hair' from the carpet (problem recognition), a friend of mine (who also has dogs) had just purchased a 'Dyson', I borrowed her 'dyson' to see how well it was working, and spoke to her about the model (information search & Personal information source), from the information I had received and experienced, I progressed to the evaluate stage, followed by the decision to purchase the 'Dyson'. After I had purchased the item, I entered the 'post evaluation stage, being completely satisfied with the performance, and the service that both the machine and company have provided me with, there is no doubt that in the future I will buy the same brand, and recommend it to other people whilst they at the 'information sage'.
Using various theories marketers often categorise the 'population' into a number of different groups.
There are also many different versions of categorising the 'population' on their income levels. The 'Social Grading Systems' (SEG) divides people by their occupation. This method is also used for advertising, however consideration for changes in society has not been reflected in the method. The method focuses on the 'chief Income occupation'; often within today's society both partners are working, increasing the overall income of the family. Similarly, it would be fair to suggest that a skilled worker such as a builder could possibly earn more than a person in a management position.
Similarly, the ACORN geodemographic model categorises people by, age, sex, socio-economic status and occupations. This model links all the factors to geographical areas, although this model is seen as more accurate than the previous, again I believe it has failings.
I feel that the method used to formulate this theory can be misleading, although a person's age, sex and income can lead them to live in a certain area, their individual personality will affect their purchasing behaviour.
At present I live with my partner and two children in a small council housing estate, which is classed as being less prosperous area, using the SEG system I would be within the social grade 'C2' category, although if I used the ACORN, I would be within three categories, 'E, D and C2'. However, although we live in a council property, we own another property as well as land, using these factors, we would move to categories 'A, B and C1'. This is somewhat confusing, not only for myself but also for the marketer, which category would they place me in? How would they 'direct' certain promotions towards me and others in similar positions?
I do not believe that either of these theories has affected any of my purchasing decisions. Personally if I want to purchase an item, and I can afford it then I will purchase it; I believe that personal choice and financial position over rules this theory. It would also be fair to say that a person can be categorised in 'A1', however their 'spending' may reflect that of a person in 'E', simply because they do not wish for 'material' items.
Consumer buying is also influenced by their financial situation; Kotler states, " An individual's economic circumstances consist of:
* Spendable income; its level, stability and time patterns
* Savings and assets; including percentage that is liquid
* Borrowing power
* Attitude towards spending versus saving"7
Throughout the year the income within my household varies, there are months when we are able to purchase goods immediately, other months we need to consider if we really need the item. Within my cultural values I do not believe in obtaining any goods on credit, so if there is a low income then we simply have to save in order to purchase the item. I believe that an amount of savings is essential when you have a house and children to care for. I think that the amount of money that individuals are 'allowed' to borrow is unbelievable, and personally I would rather be without designer clothes and expensive equipment when cheaper items can do the same task.
3) Family and Culture
Culture is a combination of people's values, beliefs, ideas and attitudes, which are normally imbedded into a person through their family and members of the society in which the person lives. Within culture there are various 'sub-cultures', such as religion, ethnic, racial characteristics and geographical areas. Membership, aspirant and dissociative groups can also influence an individual's culture. Culture varies from society to society, and can also change over time within the individual and society, making it extremely difficult for the marketer to successfully market a product.
"Culture is thus very important for the marketer to understand, first because marketing can only exist within a culture that is prepared to allow it and support it"8.
Influenced by family values and beliefs, I do not believe in purchasing products that are 'over priced'. If there are two products of similar capabilities, then I will automatically purchase the lower priced item, I do not believe in paying for the 'name'. However, I have two children who are not only influenced by the 'family' but also by their friends and various groups that they are involved in, my daughter plays netball for the school and a local team, she refuses to wear trainers that do not have a 'name' on them. Similarly both children had mobile phones, which were a few years old, and not within their 'fashion mode', they refused to use them, which eventually resulted in me having to purchase new phones, this also corresponds with "pester power". Their culture is slightly different from mine; I would have continued to use the phone irrelevant of its appearance.
Religion is not emphasised within my culture, although due to being a member of the Scouting Association, I do attended church at selected times. I do not believe that religion plays a part in my purchasing decisions, although if I were religious, then obviously I would understand how it could contribute to decisions. One of the many issues surrounding religion could be 'eating habits', and the purchase of food, similarly, Sunday shopping and product that have been tested on animals affect the purchasing decisions.
The geographical area in which I live has probably affected my purchasing decisions, as previously mentioned, I drive a Landrover, the area in which I live is prone to snow, heavy frost and rain, and owning various animals I must be able to tend to them in varying weather conditions.
Over the years I have been a member of various groups such as Scouting, Young Farmers, diet clubs, fitness centre and mother and toddler. Only the diet group influenced my decisions, where not only did I change my eating habits but also the grocery items I purchased.
There are many theories on the development of a persons personality, "personality refers to a characteristic set of behaviours attitudes, interests and capabilities"9. I believe that the development of personality is closely related to the 'cultural' situation that a person lives in. Personality is described in "terms such as traits"10; depending on the nature of the trait a person will react differently to purchasing decisions. If a person is self-confident, then external influences will not affect their purchasing decision. I am not easy influenced by advertising or people's opinions; the purchasing of a product is usually a decision that I have made myself. I do use sales people and advertising to provide information on goods, although I believe that I have a strong, self-confident personality and will not be persuaded by 'pushy' sales, promotions, advertising or packaging.
Marketers have tried to categorise people according to their personalities, during the "1980's advertising in particular was full of images reflecting the personal traits associated with the successful lifestyle stereotypes such as the 'yuppies'"11. I agree with the view of Chrisnall (1985), "that personality may influence the decision to buy a certain product, but not the final brand choice" 9.
"Wells and Gubar (1966)"13 'family life cycle' believe that a 'typical' person passes through a family life cycle. The cycle is based on the assumption that at different stages there are different 'needs' and financial situations. A traditional view of the 'family' in Britain is of a husband, wife and two to three children, living in a nuclear family, this picture may have been accurate a number of years ago, but in modern society this image is far form true.
The 'family life cycle', does not allow for the changes that have taken place in society. Over the years there has been a significant increase in the number of married couples who have no children, in "17.8% in 1961, compared to 23% in 1991"7. Similarly, the number of lone parents has increased from "2.5% in 1961 to 10% in 1991"7 This family life cycle does not include people who have never married, become a widow/widower early in life, and any divorcees that may or may not have remarried, possibly increasing the number of children in the household. The cycle is also aimed at different age groups, presuming that older couples will have children who have left home, though in today's society women are now choosing to have a career then in later life have children.
Previously, whilst being divorced with two children, I was not categorised within this life cycle. At present, I have two teenage children living at home, my income and expenditure mainly revolves around their needs and wants, and within a few years they will have their 'own' lives. Due to the age I was when I had my children (young) and hopefully obtaining a degree, my income will rise, enabling me to have more money to spend not less as suggested by the cycle. If marketers are using this model for targeting specific customers or advertising, then they are missing 'key' people, promoting to the wrong person or simply being naive to the changes that have taken place in society.
Within this category consumers are also influenced by 'opinion leaders', these are people who provide knowledge on a particular product. My partner is a mechanic, and his view is often sought by friends and customers on "what type of vehicle to buy". Although he has extensive knowledge in this area, he has little knowledge in computer technology, so depending on the knowledge the opinion leader varies.
Members of the family have different roles and influences towards buying it is thought that there are three patterns of decision making:
* "Husband Dominated - life insurance, cars & televisions
* Wife dominated - washing machines, carpets, and non-living room furniture
* Equal - living room furniture, holidays and housing"14
Within my household joint decisions are taken on issues such as insurance, I decide on most of the furniture, holidays and appliances while my partner normally decides on the vehicle issues. As society is changing and women normally have their own income they are initiating more decisions on what to purchase.
4) Environmental Influences
Over recent years the public has been made aware of issues that are affecting the environment, this has influenced the consumer, as they are now demanding 'environmentally friendly' products. These factors have influenced my buying decision to a point. Wherever possible I will purchase CFC free and recycled products, although if a product that I require is not in this category then I will purchase an alternative. The purchasing of these products has probably influenced my partners business more, he is a mechanic and responsible for the disposal of certain 'toxic' products. Wherever possible we try to purchase products that have biodegradable packaging amongst other products, although I believe that this is more to do with 'cost' than socio-cultural influences.
5) Technological Influences
Technological advancement has allowed manufacturers to produce better quality goods cheaply. This along with the fact that I am studying Information Technology has again influenced my purchasing. Problem and time solving 'tools' such as washing machines, dishwashers, microwaves and televisions, are available cheaply. In previous years I would have bought a washing machine and if it broke down then you would have an engineer to resolve the problem. About two years ago I purchased a washing machine with the cost being around £200, within fifteen months it had broken down (the Pump had broken), I did enquire with an engineer about repairing the machine, he quoted me around £90. After being quoted this price, I decided that I would be better off purchasing a new machine for about £110 more, and having twelve months guarantee with the new purchase. The Course that I am studying has provided me with an interest in various technologies, in the last six months have purchased many 'technical' items, although if they were not produced cheaply then I would probably not have purchased them.