Assumptions Of Consumer Behaviour By Psychology Marketing Essay

The term consumer behaviour refers to the behaviours that consumer display in searching for, purchasing using, evaluating and disposing of products and servers. Psychology attempts to examine the consumers’ behaviour in order to assist them to achieve maximum economic satisfaction. Human wants are unlimited while the resources available to satisfy the wants are limited as such man needs to choose among his unlimited wants in order to achieve good satisfaction. Usually, consumer fails to consider his scale of preference when he comes to make choice meanwhile he behaves irrationally and the problem leads him to make poor choice. Psychology as a field of study tries to examine how consumer behaves.

Application of psychology to the economic business is of great importance as it tries to examine the needs and demand of consumer. The filed of psychology tries to adopt scientific procedures in order to examine consumer behaviours and to make the knowledge available for the benefit of business enterprises. Understanding consumer behaviour by a business enterprise assists greatly in reducing the rate of risk and uncertainty. Many factors influence the decision of consumer and the fields of psychology attempt to observe those factors to enable industries has good market for their products. Industries adopt the use of psychological principles and theories to predict future behaviours of consumers, thus enable the industries to make good preparation for consumer satisfaction.

This paper attempts to observe how understanding of consumer behaviour enables industries to motivate consumers in a business setting. Infect, the field of consumer psychology emerges as a result of high level of economic competition among industries. Consumers’ motivation is very essential for goods profit just as personnel motivation is to an organization.

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ASSUMPTIONS OF CONSUMER BEHAVIOUR BY PSYCHOLOGY.

Consumer is assumed to behave in the following ways:-

-Consumers act in their own self interest. This generally of goods and services they themselves consume and is independent of qualities consumed by others (Reider, 1947). These interactions which we believe are on the core of consumer behaviours are thus assumed away at the outset. There is notable exception. (Leibenstein, 1976) has analyzed what he termed “band-wagon, snob and veblen” effects in consumer behaviour and of course Veblen himself put the effect on consumer’s spending on other people at the centre of his theory.

– Consumers act to maximize (utility, profit, and output) is rational. This assumption permits use of the powerful mathematics of optimization differential calculus mathematic programming and optimal control in consumer theory but raise the question whether this body of theory has reached a state of thomistic refinement with little discernible relation to the actual or possible behavior of flesh and blood human being (Simon, 1957). He also proposed a theory of “satisfying” when consumer pick the first acceptable alternative instead of scanning the choice set for the optional one.

– Consumers tastes are stable and unchanging. An introductory economic textbook (Lipsey and Steiner, 1972) states that changes in demand that are due to changes often cannot be measured. “A more extreme view (Stingler and Becker, 1977) holds that tastes are infect constant over an individual’s life time. Psychology can make a remarkable contribution to increased realism and predictive power of consumer theory by showing how consumer tastes, wants, values and desires are endogenous change over the life cycle, can be precisely measured. The huge literature on market research large ignored by micro-economics focuses on this topic.

– Self- interest is measured by “utility” in simple function of quantity of goods and services bought; utility functions are characterized by diminishing marginal utility. An early study by Thurstone (1931) posited long linear utility functions supported by theory and by experiments. Scitovsky (1976) has attacked the simplistic utility function cannot to micro-economics. Relying on empirical work by such psychologists as the D.E. Berlyne. Scitovsky reasons that our satisfaction from eating a meal depends on when we last ate and the rate at which our hunger is satisfied. He termed this effect “comfort” “novelty” and “pleasure” respectively and uses them to explain why modern societies have more goods but less happiness. Scitovsky show in particular how immediate satisfaction of wants common to societies of abundance (comfort) can rob us of greater satisfaction, through satisfying wants that have been allowed to grow by waiting (pleasure).

THE ROLE OF PSYCHOLOGY IN UNDERSTANDING CONSUMER BEHAVIOUR FOR THE BENEFIT OF BUSINESS ORGANIZATION.

Just as consumers and marketers are diverse, the reasons why psychology studies consumer behaviour are also diverse. The field of consumers behaviour holds great interest for us as consumers as marketers and as scholars of human behaviour. As consumers we benefit from insights into our own consumption – related decisions: what are buy, why we buy, how we buy, and the promotional influences that persuade us to buy. Psychology enables us to be better that is wiser consumers.

As marketers and future marketers, it is important for us to recognize why and how individuals make their consumption decisions, so that we can make better strategic marketing decisions. If marketers understand consumer behaviour, they are able to predict how consumer are likely to react to various informational and environmental cues, and are able to shape their marketing strategic accordingly. Without doubt marketers who understand consumer behaviour have great competitive advantage in the market place (David B 1987).

As scholars of human behaviour, we are concerned with understanding consumer behaviour; with gaining insights into why individuals act in certain consumption related ways and with learning what internal and external influences impel them to act as they do. Indeed, the desire for understanding consumption related human behaviour has led to a diversity of theoretical approaches to its study.

The initial thrust of consumer psychology was from a management perspective, marketing managers wanted to know the specific causes of consumer behaviour. They also wanted to know how people receive, store, and use consumption related information, so that they could design marketing strategies to influence consumption decisions. They regarded the consumer behaviour as an applied marketing science. If they could predict consumer behaviour, they could influence.

Psychology enabled marketers to note that consumers did not always act or react as marketing theory and would suggest. The size of the consumer market in many countries was vast and constantly expanding. Consumer preferences were changing and becoming highly diversified. Even in industrial markets where needs for goods and services were always more homogenous than in consumer markets, buyers were exhibiting diversified preferences and less predictable purchase behaviour. In fact, psychology helps marketers to adopt effective strategies that would enable them have good market for their goods and services (David B. 1987).

The primary purpose of studying consumer behaivour as part of a marketing curriculum is to understand why and how consumers make their purchase decisions. These insights enable marketers to design more effective marketing strategies. Yet some people are concerned that an in depth understanding of consumer behaivour makes it possible for unethical marketers to exploit human vulnerabilities in the market place. In short, they are concerned the knowledge of a consumer behaivour gives marketers an unfair advantage consumer is a human being whose behaviours are difficult to be predicted and control, many factors influences human being as such psychology always finds it very difficult to measure human behaviour (Leon G.. 1995).

Even though consumer is a complex character but the application of psychological principles to examine how he behaves help business enterprises to persuade consumers to have good market.

APPLICATION OF PSYCHOLOGICAL THOERIES IN BUSINESS PRACTICE

Many psychological and economic theories make an attempt to explain consumer behaviour and how the explanation benefits business enterprises. Consumer Behavioural Theory attempts to distinguish between so-called rational motives and emotional (non-rational) motives. The theorists use the term rationality in the traditional economic sense which assumes that consumer behaves rationally when they carefully consider all alternatives and choose those that give them the greater utility. In a marketing context, the term rationality implies that consumer select goals based on totally objective criteria, such as size, weight, price, or miles per gallon.

The theory also assumes that emotional motives imply the selection of goals according to personal or subjective criteria (e.g. the desire for individuality, pride, fear, affection, status).

The assumption underlying this distinction is that subjective or emotional criteria do not maximize utility satisfaction. However, it is reasonable to assume that consumers always attempt to select alternatives, that are their view, serve to maximize satisfaction. Obviously, the assessment of satisfaction is a very personal process, based on the individual’s own need structure as well as past behavioural and social experiences. What may appear irrational to an outside observer may be perfectly rational in the context of consumer’s own psychological field.

The theory assumes consumer is influenced by both his objective and subjective feelings. It tries to observe that there is an individual difference among consumers, our preferences, tastes and fashion differ. Business enterprises are expected to examine consumers’ tastes, preferences and fashion, doing that will enable them to produce goods and services suitable for their tastes and preferences. The theory provides good explanation of consumer behaviour that actually helps business enterprises to have good market or to generate good profit as a result of increase in the demands of its good and services etc. The theory encourages business enterprises to engage in consumer research so as to know their preferences and tastes. The theory encourages business enterprises to design the size, color and smell of its products suitable for the consumers’ interest etc.

Psychoanalytic theory:- Researchers who applied Freud’s psychoanalytic theory to the study of consumer behaviour or personality that tend to stress the idea that human drives are largely unconscious and that consumers are primarily unaware of their true reasons for buying what they buy. These researchers tend to focus on consumer purchases situations, treating them as a reflection and an extension of the consumer’s own personality. In other words, what one wears, carries, and displays are taken to reflect the individual’s personality.

Consumers not only ascribe personality traits to products and services, they also tend to associate personality factors with specific colours. For instance, yellow is associated with “novelty” and black frequently connotes “sophistication”.

The theory helps to understand that consumers are sometimes interested in certain goods and services in order to determine who or what they are. Some consumers buy certain goods to show the social class they belong. The knowledge of consumers personality enables business enterprises in persuading consumers to purchase certain goods and services. Your personality determines who or what you are, it also determines your likes and dislikes and this knowledge enable business enterprises to meet or satisfy the consumers want. The theory helps in providing the true picture of consumers and helps business enterprises to maintain cordial relationship with consumers.

Maximization Theory: – assumes that an individual behave in order to maximize as et of properties in its environment. For instance, under a given set of experimental conditions, a rat might behave so as to obtain food and water and plant orients its leaves and water. Such ideal combinations are maxima given the environmental condition.

Departure from the maximum satisfaction obtained under one set of condition (which constrains behaviour in one way) would occur when conditions were changed, that is when the behaviour (of the rats, or plants) was constrained in another way. The task of maximization theory is to predict behaviour under the new constraint. Consumer behaves differently under a different circumstance. Consumer always tries to achieve maximum satisfaction out of consuming a particular goods or services. Form of maximization theory has appeared from time to time in psychology. One can find maximization expressed more or less plainly in the motivation theories of Leob (1918), Lewin (1938) and the new-Hullian Miller (1959) conflict theory and Lugan’s (1960) receptive theory ) our maximization theory is stimulus, a theory of motivation.

The theory helps to predict consumers behaviours as such it enables business enterprise to know the preference and tastes of consumers. Such knowledge would enable the said business enterprise to win the interest of consumers and to get good profit. The knowledge of different factors that make consumers to behave differently enables business enterprises to know the marketing strategies to be adopted to advertise their goods and services.

Comparative analysis between consumer and personnel motivation in an organization.

Consumers are motivated through advertisement to start or increase the consumption of certain goods and services. In a similar vein an organization motivates its workers through various means to increase their output. The progress of an organization heavily relies on the quality of its workers. Similarly, consumers determine the productive output of business enterprises, the ability of business enterprises to motivate consumers to purchase their goods and services determines the efficiency of the enterprises.

As organization adopts strategies to motivate workers to increase their output, similarly business enterprises adopt. Similar strategies to motivate consumers to have good market, as industries try to maintain cordial and harmonious relationship with their consumers; organization also tries to maintain good relationship with its staff or workers.

Karl max (1818-1883) emphasized that the quality of a product is determined by the quality of those that produce it i.e. the personnel organizations therefore motivates its workers and give them good training to enable them provide high quality service. Personnel in an organization play a good role towards motivating consumer to consume their products.

CONCLUSION

Many scholars offer some explanation on consumer behaviour. The ability of a business enterprise to have good market for their goods and services heavily relies on their ability to understand the consumer behaviour. This is due to the fact that consumers have preferences and tastes which need to be studied in order to influence them to consume particular goods. The degree for the demands of goods and services actually determines the rate of profit. As such industrialists must engage in motivating consumers through understanding their behaviours. The adoption of psychological principles to the business practice in understanding consumer behaviour is not only important but necessary. Just as organizations motivate workers to increase their productivity, it also motivates consumers to start or increase their rate of consumption for its good and services.

In view of the above, industries engage in the advertisement of their goods and services so as to motivate consumers to buy their goods. Personnel are also encouraged to maintain cordial relations with consumers in order to motivate them. Motivation of personnel and the motivation of consumers go hand – in- hand. They both play a good role in sustaining the organization.

Many scholars observe the importance of psychology in understanding consumer behaivour and how such understanding enables business enterprise to have good market. Business enterprises need to employ the use of psychological theories and principles to enable them meet the contemporary economic challenges.