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Consumer Behaviours

Introduction

The prime focus of this study is to analyse the consumer decision-making process. For analysis, Tesco has been selected for evaluation. The assignment will evaluate the stages of the decision-making process with the black box model. Furthermore, the essay will analyse the similarities and differences for the decision-making process in the context of B2B (Business to Business) and B2C (Business to Consumers) section of Tesco. Finally, the influence of market research methods will be utilised on the decision-making process of consumers.

Path to Purchase

Stages of Consumer Decision-making Process

It is the responsibility for every marketing team of the company to understand decision-making process of the consumers. By understanding decision-making process of consumers, companies would be able to devise effective strategies based on the needs of the consumers. Furthermore, the consumer decision-making process will give provides marketers about the specific areas on which companies could invest their resources to attract a large segment of the market. The businesses must spend their time and resources to understand the consumer decision-making process. Five processes are involved in the consumer decision-making process that includes problem recognition, search process, evaluation of alternatives, selection process, and evaluation of decision (Haugtvedt et al., 2018). These steps are evaluated below to understand the consumer decision-making process.

Problem Recognition

Every search begins a common thought process with a problem. It is same in the case for the decision-making process of the consumers. The first process is to identify problems for consumers. Consumers might be in need of something due to two basic reasons. Either they need the product, or they want some product for the cause of satisfaction. In either case, there is an opportunity for the business to target the need, want of the consumers, and develop strategies to flourish their business by identifying the customer needs. However, not all the time, companies could rely on consumer needs. Many of the consumers, in case of want, have no idea of their desires. Therefore, at such times company needs to focus on the necessity of consumers (Ashman et al., 2015).

Search Process

The next process in the decision-making process after identifying the problem for consumers is the search process. In this phase, consumers tend to search for the products or services that would solve their problems. For an effective search process, consumers utilise all resources on their banks to find the most suitable products for their problems. Consumers tend to search for the product or services on the internet, social media, and TV commercials and even inquire friends and families to find out about the best product in the market. However, there are some cases in which consumers tend to evaluate the product from their experiences (Maniatis, 2016).

Evaluating Alternatives

After searching for potential products, it’s time for the consumers to evaluate alternatives for the products. There are several factors on which consumers tend to evaluate alternatives for products. These factors include price, quality, and the brand that differ from consumers to consumers. Many consumers tend to make their decision after reviewing their product online (Ashman et al., 2015).

Selection Stage

In the selection stage, consumers are ready to purchase the product. This stage also accounts for the risk management for the consumer as consumers do not want to regret their decisions afterwards. Therefore, consumers select their product after carefully reviewing their product and gaining enough knowledge about the product that helps them to make the purchase. In this stage, the purchase of the product or service is being made (Rodrigues and Borges, 2015).

Evaluation of Decision

The final process in the decision-making process is the evaluation of decision for the purchasing products. Consumers tend to analyse the product and evaluates whether the product has been able to satisfy the demand of consumers or not. In this stage, consumers develop a valuable experience for their purchase decision and the product that would help them in the next purchase decisions. If they have good experience with the product, they are likely to buy the product again and help their friends and families in their buying decisions. However, if the experience of the consumer is not good, then consumers will not buy the product again. Moreover, the consumer will also forbid their friends and families for buying that product (Maniatis, 2016). 

Black Box Model

The black box model understands the cues (advertisement or promotions) that are responsible for the purchasing behaviour of consumers. The black box model is also called stimulus-response of the consumers because it evaluates all the internal and external factors that are responsible for altering the decision of buyers. Figure.1 indicates all the internal and external factors that are aimed to divert the decision of the buyer towards the product (Guidotti et al., 2019). 


Figure 1 Black box model (Courses.lumenlearning.com. 2019).

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Figure.1 illustrates all the factors that are responsible for the buying behaviour of the consumers. The external factors that tend to shifts the attention of the consumers towards the product include 4Ps of the marketing mix and environmental factors. The marketing is developed strategically by the company to attract their customers. For this purpose, the company tends to keep its product of the high quality and provide it in a nominal range to grab the attention of customers. Further, the company also utilises an effective strategy to promote its brand and diversify their customers. The environmental factors include the economic, technological, political, social, legal and environmental factors of the culture at which the company is operating. Combined environmental and product mix factors help the company to attract their customers (Guidotti et al., 2019).

The internal factors that heavily affects the decision of the consumers are termed as the black box. The black has various factors that are present in the mind of the consumer while making a purchase. Few of these factors include beliefs, values, lifestyle, perception etc. furthermore, the black box also includes the decision-making process of the consumer. All the steps that are involved in the decision-making process are the part of this black box and affect the decision-making process of the consumer heavily combined with the customer characteristics. Thus, companies devise strategies based on customer characteristics to attract a huge range of customers (Adler et al., 2018).

However, the black box model claims that regardless of the strategies by the companies and consumer decision-making process, almost all the consumers rely on their conscious and rationale process to make their decisions for purchase. Many of the business hold the view that most of the consumer make their decision based on their rational thinking. However, effective marketer knows that consumers’ irrationality and emotional behaviour allow them to affect their thinking with marketing strategies (Adler et al., 2018).

Consumer Decision-making Process for a Product or Service

The consumer decision-making process for the Tesco involves all the steps that are utilised in the consumer behaviour theory. The first step is problem recognition. Grocery is the need for every person and is the basic need for life. Therefore, every month, people come to shop in the grocery store to fulfil their needs (Panwar et al., 2019).

The second process is the search process. In this process, consumers search for the product or services that would fulfil their need. Tesco was started as a grocery store and currently is the biggest supermarket in the UK (Panwar et al., 2019). Therefore, it has all the basic items for the grocery that would satisfy the need of the customers. Moreover, the business of Tesco is aimed to enhance the customer experience in their business environment. Therefore, Tesco would be the first choice for people when thinking for grocery shopping (Panwar et al., 2019).

In the third stage evaluation of the alternatives, consumers would have several options to choose from to satisfy their grocery demand. There are big supermarkets like Sainsbury and ASDA that also provide grocery to consumers. However, they enhance customer satisfaction combine with the impressive brand loyalty of the Tesco would allow the consumers to divert towards Tesco (Tse et al., 2016).

The fourth stage is the purchasing stage. In this stage, consumers would have the opportunity to shop from various stores from the Tesco. Also, consumers could order their groceries through the online services of Tesco. The services of Tesco are aimed to enhance customer satisfaction; therefore, customers would have no trouble in shopping from the stores of Tesco (Krisnakumar et al., 2018).

The final phase is the evaluation phase in which consumers would evaluate their decisions. The customer services of the company would create a lasting impression on the consumers embedding the long-lasting experience of consumers. Thus, consumers would again shop from Tesco would not want to consider other services after their first experience with Tesco (Tse et al., 2016).

Research and Data in Consumer Behaviour

Similarities and Differences in the Decision-making Process

Tesco PLC operates as both B2C and B2B in the business environment of the retailing industries. The B2C section of the Tesco includes their relationship with the consumers while the B2B section of the Tesco includes their relations with other company. B2C is quite clear for the company as these are normal people. However, the B2B sections for the Tesco need to be defined. The B2B sections include other retailers that provide grocery and other services to Tesco in a bulk amount and Tesco in their inventory management. These retailers are not as popular as Tesco but plays an important part in the success of Tesco. There are certain similarities and dissimilarities and exist in the purchasing behaviour of the two sections (Lepora and Pezzulo, 2015). These similarities and dissimilarities are evaluated below;

Similarities

The key similarities between the purchasing behaviour of the two sections are that both sections demand excellent customer services for the progress of their business and customer experience to influence purchasing behaviour. Furthermore, both sections of the Tesco are oriented towards the customers and have adopted the customer-centric sales approach. Main principles for the two business includes authenticity and credibility to develop customer loyalty in achieving the organisational objectives and generating sales. Finally, one more similarity that is not related to the business of Tesco is that the consumers from both sections have become more knowledgeable than before (Hondo et al., 2017).

Differences

Despite certain similarities in the two sections of Tesco, there exist several differences between the two sections. The B2C section of the Tesco is driven by the brand and product features, whereas the driving force for the B2B section is the relationship that influences the business of Tesco in their purchasing behaviour. Furthermore, the purchasing motivation for the B2B section is to generate value for the business while the purchasing behaviour for the B2C section economic considerations, personal gratifications and customer characteristics. The pricing process for the B2C section is comparably easy than that of B2B section. The main purpose for the sale team in the B2B section is to create relationship while for B2C section, the purpose of the sales team is to maximise the transactions. Finally, the purchasing relationship for the B2B section is built for the long term, while the relationship for the B2C section is based on a short term relationship (Nguyen et al., 2018).

Market Research Methods

For the market research method of the B2B section, Tesco should study the competition with its competitors that could influence other businesses with their impact. The prime example for these businesses includes ASDA, Sainsbury and Morrisons. Furthermore, Tesco could evaluate the strengths and weaknesses of their competitors and utilise a systematic process of Porter five forces to understand its competitive advantage. All this information would provide the B2B section of Tesco the possibility to influence other business and its success in the business environment of retailing industry (Hair Jr et al., 2019).

However, for the B2C section of the company, Tesco could use the qualitative and quantitative research approach to gain better insight into the market. The qualitative process includes surveying the customer market and interviews with experts of the industry to analyse the business environment of the industry better. For the B2C section, the business needs to get familiar with the views of the consumers in the market. By understanding the need of the consumers in the market, Tesco would be able to develop an effective strategy to target a wide range of customers. Interviews with the experts and the focus groups would provide the B2C section of Tesco with the opportunity to target their weak areas and work on these areas to improve their customer retention and to target various new markets of the regions (Bell et al., 2018).

Influence of Market Research on Decision-making Process

Effective market research could alter the success of the business in both B2B and B2C sections. Therefore, the business of Tesco must spend resources on market research for both of their B2B and B2C sections. Market research could significantly affect the decision-making process for both B2B and B2C sections. The first step of the decision-making process includes problem recognition. Therefore, Tesco could conduct heavy research to identify the needs of their consumers. For this process, Tesco could utilise POS (Point of Sale) strategy to determine the need of their consumers both in the B2B and B2C sections.

The detailed market research would help the business of Tesco to evaluate the different needs of their consumers in different regions of the UK and around the globe that would enhance the sales for their B2B and B2C section of the businesses.  Furthermore, market research would provide an analysis of the customer characteristics of the consumers and would help the B2C and B2B section of the Tesco to target the market segments based on these customer characteristics. For example, by evaluating the sales pattern for groceries in a specific region, Tesco based on that pattern would be able to strategise its process to enhance its sales in that specific region (Karimi et al., 2015).

Influence on the Decision-making Process

Factors Influencing the Decision-making Process

Learning and Perception

Perception is one of the main factors that affect the decision-making process for consumers. In evaluating the alternatives of the products, perception becomes the driving factor in the sale of a specific product. For example, if a consumer has to select from a normal grocery store that has just been organised and other being Tesco, the consumer will choose because of the perception of the brand image and brand loyalty of the company. Learning also impacts the consumer decision-making process. Therefore, Tesco needs to create a strong perception about their brand to attract customers (Santagata and Yeh, 2016).

Cultures and Sub-cultures

Cultures and sub-cultures of the consumers also impact the decision-making process of the consumers. The example of Nike is of prime importance in this case. Nike printed elephant on their shoes; however, an elephant is considered as a sacred animal in the sub-continent, especially India. Therefore, the whole of India boycotted the Nike company until they remove the print from their shoes. Therefore, Tesco should also keep in mind various cultures to avoid troubles for their B2C and B2B sections of the company (Cain et al., 2018).

Conclusion

The discussed essay examines the consumer-decision-making process. For analysis of the decision-making process, the organisation of Tesco was considered. The essay analysed the stages of the decision-making process, along with the black box model. Later, the essay analysed the market research methods that influence the decision-making process for the business of Tesco.

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References

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Cain, C.L., Surbone, A., Elk, R. and Kagawa-Singer, M., 2018. Culture and palliative care: preferences, communication, meaning, and mutual decision making. Journal of Pain and symptom management, 55(5), pp.1408-1419.

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