Term Paper on "Consumer Behaviour Is a Matter of Fundamental"

Term Paper 14 pages (4630 words) Sources: 14

[EXCERPT] . . . .

Consumer behaviour is a matter of fundamental interest in nowadays business environment. It helps companies get an idea about the preferences that the present and potential customers may have, as well as about their acquisition patterns. In addition, it helps them understand through what means it might be possible to influence these preferences and patterns. One particular customer who is considered to be extremely interesting for most of the companies trying to sell something out there, is represented by the person who has a financial power which allows him to acquire high-end goods. In other words, we are speaking about people who buy Mercedes cars, Rolex watches, Louis Vuitton bags and diamond rings.

Creating the profile of such a customer is not difficult, although influencing his tastes and preferences might be a task more difficult to accomplish than one could believe. Regardless if we are talking about men or women, the high-end gods consumers live in urban locations, have high and very high annual incomes, they usually have superior studies and a fast rhythm life. They are usually kept very busy by their jobs and businesses. They buy high end goods not only because they can afford goods of superior quality, but also in order to demonstrate their social status. Such is the case with cars for example. Furthermore, the client who has the ability to buy high-ticket goods is updated with the latest technology trends and does a considerable amount of shopping online.

In order to buy from online stores, there are three conditions that one must fulfil. He must have the "ability, willingness and readiness to buy before a direct sale can be consummated" (Wunderman, 2005). The ability is no longer a problem for anyone who wishes to buy merchandise online. All you need is a card and an internet connection. The willingness exists as well, as online shopping comes with a lot of advantages, the most important one being the fact that you save time and effort and you also get the acquired item delivered to your door.

The readiness however could be influenced by the expectations that one might have from the acquired item and the financial impact upon one's income that the acquisition has (Wunderman, 2005). Supposedly, the readiness would decrease together with the increase of the price. Nevertheless, the fact that Mercedes has been a leader in online car purchase may be a proof that people are comfortable buying even cars over the internet. Personally I would not be very comfortable buying an ML 500 Mercedes over the Internet. This is not because I would not trust the quality of the product. The sale point does not influence the quality of the sold product, at least not when it comes to brands that can not risk ruining their names and losing credibility (and Mercedes is one of them). My reluctance towards buying my car online does not come from the potential lack of information. Online sales portals usually provide customers with all the necessary information and photos of the item from all the possible angles in order to make the experience as pleasant as possible. In addition, one who wants to invest in a Mercedes already knows what the desired attributes of the car are. However, the pleasure of touching the car and its various pieces, looking at the engine, taking the car for a drive, talking to the salesman are important steps in the acquisition of a high class car, steps which can not be replaced by any photo or text that I may find online.

As far as online acquisition of high -end goods is concerned, one my speak about watches and jewels. From this point-of-view the sites Rolex and DeBeers come in mind. Diamond jewellery and exquisite watches can be bought online from the brand websites which provide you with all the necessary information. The DeBeers site however is better organized and gives you an increased feeling of interaction as well.

b. It is not only the individuals who act as buyers, but the organizations as well. Even if an organization acts as an unique entity when acquiring something, it is important to underline that the possible consequences of that particular acquisition will affect more than one individual.

From this point-of-view, it is worth adding that the process of decision-making (which is at the basis of any acquisition act) is an extremely difficult one.

Usually, the process of decision -making involves a team. The reasons for doing so are obvious, the more the experts involved, the better the chances of success. It is not only the manager who knows what the best interests of the organization are, but also the people who are in positions which allow them to predict how the taken choice will affect various layers of the company's future functioning.

The basis for any process of decision making is represented by information. When information comes from more reliable and relevant sources, there are more chances for the company to make a better choice. This is how the team work is justified under these circumstances.

Within any typical organization, flow of the information needed in the decision-making process is influenced by the gatekeepers- the people who link the organization with the outside environment" (Lau, 2003). The gatekeepers have a fundamental importance from this point-of-view because they contribute to a more efficient selection of the information which is to be used as relevant for the organization's functioning.

Another point of crucial importance in the process of decision-making is represented by the selection of the most relevant gatekeepers. And here one can speak about the persons who constantly communicate with parties which are essential to the functioning of the company. These parties are represented by the suppliers, for example. "Buyers trust be enhanced if buyers perceive suppliers to be trusting of the buyers and if buyers perceive the suppliers to be highly committed to the relationship" (Tao, 2005).

Buying from suppliers which are trusted by people who buy from the organization has been demonstrated to be efficient from this point-of-view and is an observation that might make things easier within the decision -making process. The important variable to be taken into consideration at this point is represented by trust. Trust helps reduce uncertainty.

Uncertainty is always associated with change and any decision has the power to change things. Change management is therefore important and must be connected with the process of decision -making. Organizational decisions are important because they might bring about changes within and these changes must be dealt with at all levels. Any acquisition might affect the future functioning of the organization because of its financial consequences (sometimes the consequences are to be found also at psychological level).

In order to increase the chances of a making a decision which will prove be to as efficacious and efficient as possible for the organization which took it, it is important to base it on expertise (hence the necessity for team work and the existence of gatekeepers in crucial positions) and on scientific data. This is why already existing models and management tools come in handy when one needs to make calculi regarding its future investments.

c. Ethnicity, religion, culture and race are elements which played a fundamental importance upon the behaviour of people as customers. All the choices that people make are influenced by their attitudes. Attitudes are influenced by values and beliefs. Obviously values and beliefs are a cultural product and the cultural background of people has a tremendous importance in defining who they are.

Nevertheless, marketing having technology at its basis has succeeded in crossing these cultural barriers. It is time to speak about the latest business trend, a trend which is nevertheless imposed by the business environment and its development, the trend called Customer Relationship Management. The main conception of CRM is that the best approach to the relationship that an organization has with its customers involves creating a life long relationship which is based on trust and mutual advantages.

According to the principles of CRM: " new customers are expensive to capture, lost customers rarely come back and one should spend their major efforts on excellent customers or groups of customers " (PHS Management Training). The advantage of making your customers loyal is to be found in the constant profits that com from constant acquisitions. A customer who is loyal to a brand is also more likely to buy other products manufactured under the same time, as he or she has trust in the brand's characteristics.

In addition, loyal customers who are satisfied by the organization's products and services are likely to become advocates for the organization, letting everybody know about their favourable experience. Should they happen to be opinion leaders, it is all the better for the brand. Since it has been demonstrated that customers who have not had a pleasurable experience tell the others about it and there are small chances for them to come back, the logical conclusion is that it is wiser… READ MORE

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