Introduction
This report aimed to analyze the consumer decision-making process and how environmental factors affect consumer decision making and other factors. The report is divided into two parts such as the part one that deals with the decision-making process and the consumer behavior in consumption while part two analyzed the market characteristics such as market positioning, segmentation and market target. The product that was chosen for the study was Hot Dog and Donut flavors which are the popular food products in the United States and other countries around the globe.
Part One
Environmental factors that affect the consumer behavior especially in the consumption of the Donut flavors and Hot Dog are the cultural factors and the economic factors which are discussed below;
Cultural factors
Cultural factors are the external environment that affects the purchase and consumption of Hot Dog and Donuts in the food industry in the United States and other countries in the world. Culture is defined as a set of societal norms, beliefs, and standard that control individual behavior in a given society (Upper Saddle River, 2012). Research shows that consumer behavior is highly influenced by the background and the culture in which they come from. For example, the Muslim community does not eat pigs and therefore, it is inappropriate for the business to sell pork in a Muslim community. In the United States, for example, Hot Dog is a very popular food while in India the demand for Hot Dog is generally low. This, therefore, shows that cultures of different community influence the consumer behavior. In addition, the social class also affects consumer behavior. The social class refers to people within a given society with an equal position in terms of education, income, and occupation. The consumer in the same social group tends to buy similar products which are distinct from other social classes (Casey, n.d.). For example, Hot Dogs and Donuts Flavors are considered food products for rich people in the society and therefore, the demand of these products are likely to increase in areas where the per capita of the consumer is relatively high. This explains why Hot Dogs and Donut Flavors are sold in major cities in the United States and other countries in the world as the cities have relatively consumers with higher income.
Economic factors
Economic environment entails issues such as taxation, the price of the product, the income levels of the consumer and the prevailing rate of inflation in the country that influence the consumer behavior. For example, when the government increases taxes through fiscal policy, the impact of the tax is passed to the consumer through the increase in the product prices and this discourages consumption of certain products. A rational consumer tends to maximize the utility of the products at the lowest costs possible and hence the higher the price the lower the quantity of the product is demanded at a given period of time assuming that the product in question is a normal good. Therefore, the consumer income, changes of prices and the rate of inflation influences the consumer behavior in buying Hot Dogs and Donuts in the United States, Australia and the world over.
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Order an essayConsumer factors that influence the consumer decision-making process
The consumer factors are the personal, psychological and social factors that influence the decision-making process of the consumer (Hooley et al.,2017). For example, personal factors are the unique characteristics of a person that defines him and his buying behavior which differs in terms of age, gender, the background of the individual and culture. In addition, personal factors may also include the opinion of a person. For example, Hot Dogs are mainly consumed by older people in the United States than younger people.
In terms of gender, Donuts are mainly consumed by the females than male. The business selling such products has to take into account the personal factors when setting a business in a given place. Psychological factors also influence the consumer decision-making process. Psychological factors include the attitude of the person, perception of the need of the products, the ability to understand the information about the products (Hooley et al., 2017). Consumers make buying decisions is based on their perception of the products and the attitude towards those products. For example, there is a positive attitude towards Hot Dogs in the United States than in India and this explains why the demand for Hot Dogs in the US is more than the demand of Hot Dog in India. Donuts are perceived to be sweet and quality brand and this makes the demand for the Donut to increase in various markets. Finally, there are social factors that make certain consumers identify themselves due to education, income levels or occupations. Social factors influence the consumer behavior that goes against the normal law of demand since goods of ostentation are consumed by these group of people due to their social status in the society and therefore, their decision usually violate the law of demand.
Role of involvement in purchase decisions
The involvement in the purchase differs on the type of the product that a consumer wants to buy. For instance, there is low-level involvement and high-level involvement. The low-level involvement occurs where the consumer buys routine goods such as bread. The high-level involvement occurs when the consumer buys goods of high value such a vehicle (Solomon, 2014). The involvement in purchase decision ensures that the consumer makes an informed decision having considered the risks involved in the purchase of the products. The involvement also ensures that the consumer makes a purchase decision that leads to the maximization of utility at a low cost.
Consumer decision-making process
Consumer decision-making process involves five critical steps. These steps are the need or recognition of the product, information search, evaluation of the alternatives, and purchase and post-purchase behavior of the consumer (Solomon, 2014). The marketing strategies should be aligned by these five steps so that the product is made available and the pricing is made such a way that the consumer can maximize the utility at the same time the product is affordable.
Part Two
Market segmentation
The market segment for the Hot Dogs and the Donuts are determined based on the demographic, behavioral, psychological and geographical factors (Cahill, 2012). For example, these products are majorly sold in major cities where there are relatively many people of different age, gender, and cultural backgrounds. In addition, the products are sold in markets that manifest a positive perception of the products and this leads to high consumer demand for the products (Hooley et al., 2017). There is product differentiation in terms of color and brands which are sold in different geographical locations which gives the consumers the opportunities to choose during the decision making process.
Market targets
The market target for the products is the older people than the young since the demand for Hot Dog and Donuts is very high among older people than younger people. In addition, the business targets markets with relatively high per capita income with high purchasing power since the products are perceived to be luxurious and not a basic food.
Product positioning
The products are designed such that it meets the unique need of every consumer. For example, the products are differentiated in terms of color and brands that distinguishes the products from other substitutes from the consumers (Hooley et al., 2017). In addition, there is intensive adverting of the products that enable the consumers to get the relevant information about the products which enable them to make an informed decision during the decision-making process.
Conclusion
Consumer behavior is a very important concept that should be incorporated into the business model so that the business organization to offer products that meet the need of the consumers. The organizations should, therefore, conduct a thorough research on the market and the consumer behavior patterns in order to maximize profits and satisfy the needs of consumers as well.
References
Cahill, D. J. (2012). Lifestyle Market Segmentation. Hoboken: Routledge, Taylor, and Francis.
Casey, R. F. (n.d.). Consumer behavior: Where do we stand? a marketing management appraisal. On Knowing the Consumer / Edited by Joseph W. Newman.
Hooley, G. J., Nicoulaud, B., Piercy, N., & Rudd, J. M. (2017). Marketing strategy & competitive positioning: England. Pearson Press.
Solomon, M. R. (2014). Consumer behavior: A European perspective. Harlow: FT Prentice Hall.
Upper Saddle River. (2012). Cases in consumer behavior: 2. (Cases in consumer behavior.), New Jersey: Pearson Education.
