Consumer Decision Making (Essay Sample)

Consumer Decision Making
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TOC \o "1-3" \h \z \u Executive Summary PAGEREF _Toc388775652 \h 3
Overview of the Product-Coca-Cola PAGEREF _Toc388775653 \h 3
Consumer Decision Making Process PAGEREF _Toc388775654 \h 4
External Factors Influencing Consumer Decision Making PAGEREF _Toc388775655 \h 5
1. Culture PAGEREF _Toc388775656 \h 5
2. Sub-Culture PAGEREF _Toc388775657 \h 6
3. Social Classes PAGEREF _Toc388775658 \h 8
4. Reference Groups PAGEREF _Toc388775659 \h 9
Functions of reference Groups PAGEREF _Toc388775660 \h 10
5. The Family PAGEREF _Toc388775661 \h 13
6. Opinion Leaders PAGEREF _Toc388775662 \h 13
7. Diffusion of Innovations PAGEREF _Toc388775663 \h 14
Public Policy and Consumer Protection PAGEREF _Toc388775664 \h 15
Conclusion PAGEREF _Toc388775665 \h 17
References PAGEREF _Toc388775666 \h 18
Executive Summary
The consumer decision making process is influenced by both internal and external factors. The external factors include reference groups, the family, social class, cultural and sub-cultural aspect. These factors have different levels of influence on the decision making process. Some are more influential than the others.
This paper looks at external factors that affect the consumer decision making process for the case of Coca-Cola. It looks at these factors in depth and discusses the influence that they have and how the company deals with them in its marketing efforts.
Overview of the Product-Coca-Cola
The Coca-Cola beverage was developed in 1886 by John Stith pemberton. He later sold the brand and formula to Asa Candler in 1889 who later registered the Coca-Cola Company in 1892. The story of Coca-Cola since then has been remarkable. In 196 the company would start manufacturing its unique bottles which it uses to date. The company went beyond the U.S boundaries in 1928 under Robert Woodruff who was the company president at the time. In the 1960s, the company expanded its product range by developing new flavors such as Sprite, Fanta and Fresca and also acquired Minute Maid company. This brought a completely new line of products to the company, greatly changed its image and opened up new markets thereby increasing its sales volumes. The story was no different in the 1980s when the company became renowned for its incredible innovativeness that ultimately changed the company. It introduced diet coke which instantly became the world’s most famous low-calorie soft drink. The company continues to grow and today is the unbeatable market leader in the World soft drink market. Its products have markets all over the globe. Every day, over 1.4 billion Coca Cola products are sold (Brief company history, 2011).
Most of the marketing efforts undertaken by companies and marketers are aimed at influencing the decision making process of the consumers. In marketing, the consumer means everything. This is the person who buys a product or service in order to satisfy his needs at a convenient place and through monetary consideration. Marketers need to understand consumer behavior which is defined as "the study of consumers and how they decide on the good or service to choose, consume and dispose among the many available choices to choose from." understanding consumer behavior is critical for marketers as it can guide their marketing activities, messages and focus (Defining Consumer Behavior, 2014).
Consumer Decision Making Process
Before a consumer buys a product or service, he goes through stages in making that decision. These are: problem recognition, information search, evaluation of alternatives, purchase decision, purchase and post purchase evaluation. The actual purchase is just one stage of the process. It is not all decision processes that will lead to purchase and it is not all consumer decision that involves all the stages (Romm & Sudweeks, 1998).
The decision making process is influenced by both internal and external factors. External influences lay a vital role in determining the decision that a consumer will make. These include: culture, subculture, reference groups, social stratification, demographics, families, households, geographics and marketing activities. Coca-Cola understands these factors and incorporates their understanding in its marketing approach.
External Factors Influencing Consumer Decision Making
1. Culture
Culture is the most important external consumer decision making factor. This is because human behavior is shaped by culture. It is defined as the characteristics of a given group of people pertaining to such aspects as language, religion, social habits, cuisine, music and arts (Zimmermann, 2012). The interaction between humans and their culture determines their behavior. When it comes to a consumer, he is influenced by his culture when deciding what to buy. He is subconsciously guided by his culture because it sets the boundaries within which he can think and act. Culture defines what is acceptable and what is not. If a commodity is not culturally viewed positively, a consumer will avoid it. It is therefore imperative form marketers to ensure that the products they market are acceptable to different cultures. Coca-Cola has managed to do this through decades of relentless vigorous marketing in both new and old markets.
Human culture is of a scholastic nature meaning it is acquired. It is learned through imitation and observation of the reward-punishment process in a society. A child learns the symbols of his culture from his family, friends and teachers. This is how culture is leaned and transmitted to other generations and it has a great influence on a person’s behavior, thoughts, reactions, beliefs and sensitivity to surrounding issues.
For a brand, it is necessary to understand cultural factors in each market and adapt its product to suit that market in its marketing strategy. This plays a vital role in the habits, perception, expectations and behavior of consumers thereby determining whether they will buy the product or not. For instance, in the West, it is an acceptable social norm to invite friends for a drink at home whereas in Eastern cultures such as Japan, it is preferable to invite such people for an outing in a restaurant. Usage and consumption times area also different for different societies and as such, marketers must take this into consideration. Coca-Cola advertises its products using different approaches in different cultures. They are customarily marketed as refreshment and social drinks which augur well for most cultures.
Since Coca-Cola’s market encompasses the entire world consisting of thousands of cultures, it has a dynamic way of dealing with different markets and cultures. In its website, it has specific pages dedicated to consumers from different parts of the world. The pages target people from general cultures such as African-Americans, Latin Americans, Asians, Japanese, Africans, etc. It has different messages relevant for the different groups. The website also has a map in which viewers choose the language in which they want to access the website. Brands strive to ensure that majority of the consumers feel recognized and Coca-Cola does this by ensuring the website is available in different languages to be useful for as many people as possible (Kosko, 2013).
2. Sub-Culture
A sub-culture is an identifiable small social structure within a large dominant culture. It is composed of people who share similar behaviors, values, symbols and attitudes which distinguish them from the large dominant culture (Atkinson & Young, 2008). In other words, subcultures can be viewed as nationalities, ethnic groups, gender, age groups, and religions. Brands take subcultures into consideration when laying out their marketing programs. This helps adapt a commodity or communication strategy to the values and norms of a particular segment of the consumer base. Coca-Cola uses geographic segmentation in its marketing program which focuses on subcultures. For instance, the marketing approach in India is different from the one used in Pakistan even though the two countries share cultures with some similarities. The flavors are also different from country to country and are reflective of the cultures of people in any particular region.
Subcultures are distinguished by unique beliefs, customs and values. They are also distinguished by central core cultural themes, languages used and self identification. These subcultures can be ethnic, religious, geographical, regional, racial and age-based. In Australia, ethnic subcultures include Asian-Australians, Whites, Sojourners and indigenous cultures such as Aboriginals. The main Religious subculture is Catholic Christians.
The main sub-cultural division that plays a major role in consumer behavior for the case of Coca-Cola is age. For marketing purposes, it can be divided into generation-X and generation-Y. Generation-X is for those born between 1965 and 1979 while generation-Y is those born between 1980 and 1994. The groups require different marketing approaches. Generation-Y is young, open to change, technologically sophisticated, influenced easily by reference groups, confident, optimistic and disloyal to brands. Generation-X on the other hand is highly educated, spends a lot on recreation, and is concerned with job satisfaction more than with salary and purchases reputable brand names. Coca-Cola targets these groups depending on their ages. For generation-X, it is easy to market the brand because it has a reputable name worldwide and is renowned as a recreational drink. On the other hand, marketing to generation-Y is tricky because the group is disloyal to brands and is adventurous. However, the task is made easier because these people have grown up drinking Coca-Cola and most were induced to like it at an early age at the family level.
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