Marketing is a mutually beneficial exchange of something of value. It is a strategy businesses use to achieve; amongst other things, their goals and to create brand awareness. It is about identifying and understanding a business' customers and customer wants and needs. The marketing concept helps a business understand its potential customers, identify new or potential opportunities, and helps plan the process of the way a business interacts with its target market. Since marketing involves research and analysis, successful marketing helps businesses increase its ‘bottom line'. For example, how a business is positioned in a market, who the target market is, the price of products and services, and the quality of products offered and the factors affecting consumer buying behaviour. (Business.gov.au, 2018).
Why do marketers study buyer behaviour?
The study of buyer behaviour is crucial in marketing, because the market place has become very competitive, this gives marketers an advantage over its competitors; with the right amount of research and evaluation. The study of consumer behaviour shows what a customer wants to buy, where the customer would potentially buy it, the amenities that are important to the customer, the method of purchase and the reason behind the purchase.
Figure 1.0 (Kotler et al., 2014)
To illustrate this further, Figure 1.0 shows how marketing and other stimuli enter the customer's “black box” and produces certain responses. The first step that stimulates a buyer's black box consists of product, price, place and promotion. However, there are other stimulus besides these, such as, economic, technological, political and cultural stimuli. Once these stimuluses enter the buyer's black box it produces the buyer's response. The choice of product, brand, purchase timing and purchase amount is based on the buyer's characteristics and decision process. It is important for marketers to understand how these stimuluses change into responses in the buyer's black box. Because everyone is different, marketers need to understand the characteristics that affect consumer behaviour.
How an individual responds and perceives a stimulus is strongly influenced by factors such as cultural, social, personal and psychological factors. Although these factors cannot be controlled by marketers, but it has to be taken into consideration when coming up with marketing strategies. It is important for marketers to understand these different factors in order to understand how they affect consumer buying behaviour and how to use these factors to come up with different strategies for their target markets.
Culture is one of the most important and determining factor when it comes to buyer's behaviour (Kotler et al., 2014). It is engrained in individuals and establishes their basic values, perception and wants. The context of cultural factors can then be further divided into subculture and social class. According to Marketing for Hospitality and Tourism, sixth edition, ‘Culture is expressed through tangible items such as food, architecture, clothing and art. It determines what we eat, how we travel, where we travel and where we stay' (Kotler et al., 2014). For instance, in Asian cultures it is common to consumes rice for breakfast, however, in Western culture people do not consume rice for breakfast and have; for example, eggs and bacon instead.
Since many companies these days are international companies, international marketers must comprehend these differences and adjust their products and marketing strategies accordingly. Failure to understand different cultures, their customs and behaviours could potentially affect a company's product and reputation. McDonald's is a good example of this, it adapts its menu items in different countries to fit the needs of that particular target market. McDonald's offers a pork burger in Thailand but does not have this option in Malaysia for instance; as Malaysia is a Muslim country and it is against Muslim beliefs to consume pork.
Social factors are comprised of groups, family, roles and status. Reference groups could be direct (face-to-face) or indirect points of references that influences a person's behaviour, such as, individuals who follow a certain celebrity's way of dressing or diet. Reference groups influence an individual in at least three ways. Firstly, they portray a new behaviour and lifestyle to a person. Secondly, they are able to influence a person's attitude and self-concept. And lastly, they create pressure that may affect they person's buying behaviour in terms of product choice, brand preference and merchant choice. (Kotler et al., 2014).
Membership groups are groups that person belongs to that have an immediate influence on them. This group can be further divided into primary and secondary groups. Primary groups are groups such as family, friends, neighbours and co-workers; people with whom they have a regular and informal interaction. Secondary groups are groups such as religious groups and trade unions; groups with whom they have formal and less regular interaction. (Kotler et al., 2014).
Research shows family members have one of the strongest influences on consumer buying behaviour. Therefore, marketers are focused on the different roles husbands, wives and children play on the purchase of distinct products and services. (Kotler et al., 2014). As people grow older, their lifestyle changes and so do their purchasing behaviour. To illustrate further, McDonald's uses their ‘Happy Meals' to appeal to kids. Kids then make their parents buy them these meals.
An individual is part of many groups, such as clubs, organisations, family, etc. Their place in these groups are defined in terms of role and status. Roles for example are roles such as wife, husband, manager or employee; they are activities a person is expected to perform according to the people around them. Status on the other hand are statuses generally given to these roles by society. For instance, a daughter might behave differently when celebrating her birthday with her family members, as opposed to if she were to celebrate her birthday with her friends. Hence, an individual's role at the time of purchase affects their purchasing behaviour.
Personal factors are influenced by age, life-cycle stage, occupation, economic situation, lifestyle, personality and self-concept. As people age, their preferences for food, entertainment, clothes, etc change. Marketers must always keep in mind how these changes affect consumer buying behaviour and adapt its strategies to it. For example, using bright colours to grab the attention of kids or teenagers, and using bigger fonts when their target markets are the older generation.
A consumer's occupation, economic status or lifestyle influences their buying behaviour. For instance, a businessman would purchase lunch from a full-service restaurant, whereas a university student might buy a sandwich from a convenience store. Marketers should always follow economic indicators and adjust their marketing strategies accordingly.
A person's personality and self-concept affects his or her buying pattern. Analysis of consumer's personality can be practical for certain products. Case in point, a person who is an extrovert may be drawn to big parties and clubs. This fact can be used by bars for example, to promote their brand and use appropriate images in their advertisement.
Lastly, a person's psychological factors such as motivation and perception plays a role in their buying options. Maslow's theory of motivation explains why people are driven by certain needs at a given time. He says, people's needs are arranged from the most crucial to the least crucial, which are physiological needs, safety needs, social needs, esteem needs, and self- actualisation needs.
Once a person's most crucial need it satisfied, it will stop being a motivator, they then move on to the next crucial need. A third world country will be concerned with being fed rather than looking after the environment for example.
No two people have the same perception even though they share similar motivations. Moreover, they may react differently if faced with the same situation. This is due to the fact that each person receives, organises and interprets information (from the five senses: sight, smell, hearing, touch and taste) differently.
Characteristics that would have the greatest impact when deciding on a restaurant to celebrate a special occasion
As mentioned above, there are many factors that influence the decision-making process when it comes to purchasing a product or service. I am turning 25 in a few weeks and I am planning on celebrating my 25th birthday in a restaurant. The factors that would help me decide on a restaurant to celebrate this special occasion include the type of cuisine, the group of people I will be inviting, restaurant reviews and the type of restaurant (casual or fine dining).
The type of cuisine is a cultural factor. The cultural factor in this situation plays the biggest role in helping me make my decision. I am of Indian heritage, I grew up eating food full of flavour and spices. My preferences in food are always based around Asian cuisine as they are generally full of flavour and spicy. My favourite cuisines are Thai, Japanese and Indian. Therefore, I would definitely choose between these three cuisines.
The group of people I will be inviting and checking restaurant reviews are social factors. I will be going to this restaurant with a group of friends instead of my family, therefore, the role I am playing at the time of purchase is a friend, not a daughter. This means I will behave differently with my group of friends and my purchasing behaviour will be influenced by this. Besides that, I will also do some research on restaurant reviews before I decide on the restaurant. I will ask the opinions of my reference groups (family and friends) who have been to this restaurant.
The type of restaurant is a personal factor. Based on my economic situation would like to go to a fine dining restaurant, that serves good food paired with good wine. I have saved my tax return for this year specifically for this special occasion and would like to spend a bit more on good quality food and wine. Moreover, it is a lifestyle choice as well. Most of my friends enjoy wine, good food and fancy restaurants which has made me choose this lifestyle as well.
The ethical considerations relevant to a restaurant owner collecting data on customers' purchasing behaviour
Many restaurants these days collect personal data of its customers to track purchasing behaviour. Based on the data collected businesses know how customer's personal details such as, phone number, house address, marital status, how often their customers eat out, their food preferences and allergies.
There are several ethical considerations restaurants should bear in mind when collecting data on their customers. Firstly, restaurants should know the reason behind collecting this data and ensure all parties involved are aware of the reasons; this includes the customers. Customers' consent should be asked for before data is collected.
Secondly, is to ensure transparency. If a restaurant handles customer data, then customers should be fully aware of the business' practice and even control the collection and use of this information.
Thirdly, restaurants should know the rules surrounding data collection. Processes should be put in place to understand the authority related to holding such data and the risks of misusing it. There should be control over who has access to this information. In the end, businesses want to captivate their customers, therefore, restrictions and regulations should be placed, and only certain members of staff should have access to customer information. This minimises the risk of the data being misused and doesn't surprise customers about how their data is being handled. This can cause distrust and restaurants could potentially lose customers. (Reichenbach, 2018)
In conclusion, marketing is a business strategy used to achieve business goals and create brand awareness. Businesses identify target markets and use different strategies to approach these target markets. The factors that influence buyer behaviour are cultural, social, personal and psychological factors. It is pivotal for marketers to understand these factors and how these factors can be used to influence buyer behaviour. Data mining has become something very common with the evolution of technologies. Businesses should consider the ethical issues surrounding the collection of customer data and customer purchasing behaviour data. Businesses should always know the reason behind data collection, ensure transparency between all parties involved and know the rules and regulations of data collection.
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