AMB200 Consumer Behavior Assignment & Assessment Solution Answer

TAFE Assessment Cover Sheet - nswConsumer Behaviour Topics

There are two consumer behavior topics for this assignment. You should choose one (1) of these topics as the subject of your Consumer Behaviour Report.

Today consumers are faced with a myriad of choices in every day and high involvement decisions. For complex and important decisions, likely, young people are also influenced by family, friends, and others: both offline and online.
You are to choose a high-involvement purchase (you may have recently bought a car, or moved into a share-house, or bought an expensive piece of jewelry, or gone on an OS holiday, or moved to another country or University). How has the role of others affected your decision?
There has been a lot written and researched about the decision-making aspects. You are to research how parents/guardians, groups, or significant others form a part of this process and how they influence the decision made. Considering the complex nature of such a decision making process and the influence that ‘others’ are likely to have.

It would be wise to choose the product or service, then contrast how significant other/s affected your decision. You will also need to use theory to analyze your thoughts and the decision process.
* Relevant readings to help you get started (there are others):
Bearden, W. O., & Etzel, M. J. (1982). Reference group influence on product and brand purchase decisions. Journal of Consumer Research, 9 (4), 183-194.
Kaplan, M. F., & Miller, C. E. (1987). Group decision making and normative versus informational influence: Effects of type of issue and assigned decision rule. Journal of Personality and Social Psychology, 53.

Topic 2: Convincing people to get early checks for cancer

Much has been written in the media and academic research about cancer. While many hundreds of types of cancers exist, early detection is the key to surviving the disease in many instances.

While breast screening takes place routinely for women aged over 40, and prostate cancer testing is recommended for men over 50, there are frequently more and more younger people being diagnosed and dying with other cancers not being detected, such as bowel, skin, and breast.
Considering the complex nature of this issue, as well as past and current strategies employed by charities and Government. Your task is to recommend how to convince younger men and women to get early cancer detection testing.

To get started: choose a gender and age group after doing some research about early detection of cancer and which sex suffers from different cancers.
Possible theories: Motivation, TPB, ELM (persuasion)
* Relevant readings to help you get started (there are others):
Ajzen, I. (1991). The theory of planned behavior. Organizational Behavior and Human Decision Processes, 50 (2), 179-211.
Burns, D. J., Reid, J., Toncar, M., Anderson, C., & Wells, C. (2008). The effect of gender on the motivation of members of generation Y college students to volunteer. Journal of Nonprofit & Public Sector Marketing, 19 (1), 99-118.

Context And Problem/Opportunity

The problem/opportunity selected for the business assignment is to investigate the role of reference groups, i.e., family, friends, and others in a high involvement purchase decision. In detailed terms, purchase decision varies in terms of high involvement and low involvement. Under high involvement purchase decisions, the product is quite expensive and risky while the product is less expensive in a low involvement purchase decision.

The role of reference groups increases in case of high involvement purchase decision as such products are quite expensive therefore require consumers to do a lot of research before arriving at a purchase decision. In this regard, a high involvement purchase decision, e.g. purchasing a car is selected and the role of others in its purchase decision from the perspective of marketers is evaluated.

Literature review

The reference group is defined as the group or individuals influencing the purchase decision of a consumer. There are various kinds of reference groups as formal, informal, aspirational, etc. In simple terms, family, friends, work colleagues, online communities, membership of a particular group, etc are some entities influencing purchase decisions (Yakup, Mucahit, and Reyhan, 2011).

The marketers believe that consumers’ perception of a given product or service is influenced in several terms by the reference groups.
In the first instance, there is informational influence, i.e., nature and kind of information provided by reference groups to the consumer regarding product or service (Petra, 2012).

Such information can be related to product performance, experience, image, etc, and help consumers in making purchase decisions. Secondly, consumers also make purchase decisions in light of group norms, values, and behaviors.

All these aspects are analyzed and the purchase decision is made in conformance with group norms, values, and behavior to which consumer belongs to.
From the marketing perspective, reference groups provide a frame of reference to individuals for making purchase or consumption decisions (Sathish and Rajamohan, 2012).

The family, friends, and other people do not pose a kind of restriction on the consumer for making a particular purchase decision. Instead, they specify general values, behaviors, and attitudes that serve as a benchmark in making purchase decisions.
It is identified that these people or groups do not pose specific authority levels for instructing or directing consumers for making purchase decisions.

Instead, these people or groups are just having relative influence guiding consumers for a particular purchase decision (Panda and Patra, 2013). Every individual seeks to maintain and nourish friendship in his or her life for having companionship, security, and a platform for discussing problems or situations and arriving at the best possible solutions.
The concept of reference group has complicated the purchase decision-making process. Previously, the purchase decision-making process is only limited and confined to the individual. But, now with the emergence of social groups and the desire of individuals of gaining recognition, attention, and acceptance in social settings complicated the purchase process.

The purchase decision is taken in light of social influence where there are several determinants of influence (Lal and Sharma, 2012).

The reference group is one such determinant considered as a significant factor to be taken into account by the consumer for proving the worthiness of purchase decision. There are several factors through which reference groups influence the purchase decision of consumers. Some such factors are perceived risk, expertise, need for social approval, comparative appraisals, etc. It can be understood in a manner that consumers make purchase decisions under the influence of all these factors.

This is evident as a high involvement purchase decision like the purchase of a car is never taken in light of marketing advertisements and notions (Sukato and Elsey, 2009).
Rather, consumer evaluates purchase decision of purchasing a car in light of factors mentioned above falling in the dimension of reference groups. The risk aspects like performance, mileage, features, design, etc are considered for avoiding risk in the purchase decision of a car.

Moreover, experience, suggestion, and feedback of friends, family members, relatives, and others are also taken for ensuring the success of purchase decisions. The opinion and views of reference groups matter significantly and give consumers confidence in making a purchase decision (Sian, Chuan, and Chen, 2010).

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Theory/model/ framework

Under this, Maslow’s theory of motivation is used for gaining insight regarding the high involvement purchase decision and the role of others in it. There are five dimensions of this theory as shown below:
(Source: Abraham, 2011).
Among the five-level needs, self-actualization needs, ego-needs, belongingness, and safety needs-led individual to involve others in the purchase process. It can be understood with the help of an example of the purchase of a car.

The car is purchased for safety reasons as getting security, shelter, and comfort in extreme weather conditions as per the safety level need of the theory. Under third level needs, belongingness individual seeks love, friendship, acceptance, recognition by others (Sharma, 2011).
The decision of a car purchase of quite high value and the price is done by the consumer for enhancing his/her status, gaining improved attention, and recognition in the group. It is believed that individuals always face a kind of comparison among friends, family, and other groups.

The comparison is a common practice that prevails everywhere and individuals winning such comparison gain high love, respect, acceptance, and recognition. The purchase of luxury cars enables individuals to win such comparison in terms of value, price, performance and features thereby gaining additional love, friendship, and acceptance by others (Schiffman and Kanuk, 2009).

Moving further, the purchase of a car also helps an individual in satisfying ego and self-actualization needs. It is so because the purchase of luxury cars is a matter of prestige, status, self-fulfillment, accomplishment, etc more than merely providing a traveling mechanism. All these factors facilitate individuals to develop a special image and reputation in the eyes of others.

In this way, the purchase of cars and the role of reference groups go side-by-side. The consumer makes this high involvement purchase decision in light of reference group considerations and at the same time for improving his/herself among the reference group (Hoyer and Maclnnis, 2008).

Recommendations

Some strategies or tactics are recommended in this section for handling the problem/opportunity identified. It has been identified that the reference group influences an individual’s buying behavior by affecting his/her product evaluations, aspirations, and behavior. The social network comprised of family members, relatives, colleagues, friends, etc are counted in the reference groups and influences buying behavior and decision-making processes significantly.
In this context, it is said that marketers need to use reference groups’ concept properly facilitating consumers to make purchase decisions quickly thereby ensuring product sales and market leadership (Kardes, Cronley and Cline, 2010). In simple terms, the concept of reference groups should be utilized properly by marketers for improving marketing prospects.

In this context, some recommendations are fostered in light of the marketing dimension named 4 P’s-product, price, place, and promotion.
The first set of recommendations relates to the positioning of product offerings in the marketplace in a manner that affects the cognitive behavior of consumers. This recommendation is fostered specifically in the context of high involvement products.

In detailed terms, high involvement product offerings lead consumers to identify, evaluate, and affiliate their purchase options with reference groups to arrive at the best possible purchase decision.
The reference groups are involved in gaining useful knowledge, information, and experience, gaining rewards in terms of recognition and acceptance, and maintaining self-concepts (Sharma, 2011).

In this regard, high involvement product offerings should be positioned or offered in a manner allowing consumers to involve reference groups and utilizing them for enhancing the worthiness and value of product offering.
Marketers are also recommended to develop a strategy for using reference groups for creating new customers. It is identified that a reference group is a powerful tool for persuading consumers to identify product offerings and making purchase decisions.

This tool can be used for creating new customers by transmitting product messages in different manners. In the first case, marketers can use reference groups for reducing perceived risks and assisting consumers in making purchase decisions.
The consumers perform desirable purchase behavior only when he learns how to reduce the perceived risk in making purchase decisions (Panda and Patra, 2013). It is equally important for marketers to reduce perceived risks to lead consumers to identify products and arrive at purchase decisions.

For example, a consumer who is looking for a new computer will acquire information from an experienced user for reducing perceived risks and using a computer effectively. The experienced user in this case provides marketers the opportunity to create new customers.

The concept of reference groups is also recommended to be used as a promotional tool by business firms. The task of promotion is served by the reference groups through transmitting, distributing, and circulating information. It is worth mentioning that business firm displays and circulates product information for promoting products in the marketplace.
This task of promoting products can be done successfully by marketers by using the concept of reference groups. For using reference groups as a promotional tool, marketers are recommended to accidentally transmit information regarding a product or service among reference group members (Petra, 2012).

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The reference group among which product information is transmitted will observe and motivate to use the product. In this way, the task of product promotion is done on the one hand and reference group members are motivated to initiate the purchase process.

As and when reference group members initiate the purchase process, other people also influence for making a purchase decision. In this regard, business firms are recommended to select and transmit information among enthusiastic reference group members who can provide active response and platform for adding new customer groups.
In simple terms, marketers can utilize the reference group as an effective promotion tool by selecting enthusiastic reference members.

The enthusiastic reference members mean people holding an impressive image in the eyes of normal customers should be selected for promoting products. For example, Nike has hired a basketball star named Michael Jordan for promoting basketball shoes.
For this purpose, the concept of basketball shoes is introduced and promoted among basketball players holding significant image and reputation in the marketplace. The basketball reference group holds high potential for persuading others or normal categories consumers to purchase basketball shoes (Sathish and Rajamohan, 2012).
Lastly, it is also identified that marketers are using reference groups for enabling consumers to perceive products as trustworthy and reliable. In this context, marketers should redefine the role and function of the reference group. Apart from circulating and transmitting information, knowledge, and experience among users, the reference group should also be utilized for establishing and enforcing standards.

The standards here refer to the guidelines and benchmark for product performance.
It means reference groups should define the performance criteria for a product offering and individuals should be guided to purchase product meeting that performance criteria (Panda and Patra, 2013).

This recommendation is based on the notion that reference groups should not only be used for product information, creating new customers, promoting products. Rather, it should also be used as a normative tool defining performance standards for product offerings to lead consumers to arrive at successful purchase decisions.

References

Abraham, K. (2011). A Study On Consumer Behaviour. International Journal of Enterprise Computing and Business Systems, 1(2).
Hoyer, W., and Maclnnis, D. (2008). Consumer Behaviour. Nelson Education, Ltd.
Kardes, F., Cronley, M., and Cline, T. (2010). Consumer Behavior. Nelson Education, Ltd.
Lal, K., and Sharma, S. (2012). Changing Consumer Behaviour- A challenge for Sustainable Business Growth.
International Journal of Marketing, Financial Services, and Management Research, 1(8). pp.149-158
Panda, J., and Patra, S. (2013). A Study on Consumer Behaviour in Telecom Service Provider. VSRD International Journal of Business and Management Research, 3(9). pp.453-457
Petra, M. (2012). Research of the Behavior of Consumers in the Insurance Market in the Czech Republic. Journal of Competitiveness, 4(2).
pp.20-37
Sathish, S., and Rajamohan, A. (2012). Consumer Behaviour and Lifestyle Marketing. International Journal of Marketing, Financial Services, and Management Research, 1(10). pp.152-166
Schiffman, L.G., and Kanuk, L. L. (2009). Consumer Behaviour: Ninth Edition. Pearson Education, Inc.
Sharma, Y. (2011). Changing Consumer Behaviour concerning Green Marketing- A Case Study of Consumer Durables and Retailing. International Journal of Multidisciplinary Research, 1(4). pp.152-162
Sian, F., Chuan, S., and Chen, B. (2010). Cultural and Consumer Behaviour: Comparisons between Malays and Chinese in Malaysia. International Journal of Innovation, Management, and Technology, 1(2). pp.180-185
Sukato, N., and Elsey, B. (2009). A Model of Male Consumer Behaviour in Buying Skin Care Products in Thailand. ABAC Journal, 29(1). pp.39-52
Yakup, D., Mucahit, D., and Reyhan, O. (2011). The Impact of Cultural Factors on the Consumer Buying Behaviors Examined through An ImpiricalStudy. International Journal of Business and Social Science, 2(5). pp.109-114.

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