Characteristics Affecting Consumer Behaviour

Characteristics Affecting Consumer Behaviour Consumers buying behaviour has been comprehensively researched by marketers in order to understand how, what and why customers buy products and on what are the basis of their decisions. The fundamental basic approach into analysing consumer buyer behaviour is considered the Stimulus Response model developed by Pavlov shown in Figure . In this model consumers are subject to marketing stimuli as well as other stimuli such as economic, technological, political and cultural events. These are then evaluated by the customers black box which is based on personal buyer characteristics and decision processes, and hence different buyer responses are observed (Kotler Armstrong, 2001). Figure : Model of Buyer Behaviour Kotler Armstrong (2001) define the traditional buying decision process in five consequent steps which consist of: Problem identification Information search Evaluation of Alternatives Purchasing decision Post purchase behaviour The above model implies that the buying process initiates quite before the actual purchase and continues after. The process starts with the need recognition where the consumer recognizes a problem or a need, which could be caused by internal or external stimuli. The consumer will hence start to search and gather information in order to satisfy their needs. Information can be obtained from a variety of sources such as personal sources, commercial sources, public sources, and experiential sources. Once the consumer is armed with the required information, the consumer uses this information to evaluate alternatives in selected the brand. Following the evaluation of the options available, the consumer is required to make the purchase decision and select which brand to purchase. The loop doesnt close with the purchase of the product, but rather post purchase behaviour recognises whether the product meets the consumers expectations. Customer satisfaction is key because it will result in rep eat customers and positive word of mouth. Characteristics affecting consumer behaviour Consumer behaviour is highly influenced by external and internal factors. The external factors are divided into five sectors: Demographics, socio-economics, technology and public policy; culture; subculture; reference groups; and marketing. The internal factors include a variety of psychological factors, such as beliefs and attitudes, motivation, perception, learning and self-image (Malcolm, 2001). Studies have shown that these factors and others that fall beyond the marketers control have a significant impact on consumers behaviour and purchasing decisions (Dibb, et al., 2001; Solomon Stuart, 2003). Shah (2010) refers to traditional consumer behaviour in purchasing goods and services as the process of selecting, purchasing and consuming of goods and services that satisfies consumer wants. Consumers select the product they would like to consume by identifying the good or product that provides them with the greatest value in return. Hence the consumer will focus on the available spending power to obtain the commodity. Following the analysis of cost and price of the commodity, a final decision is taken to select the best option that satisfies the consumer needs. This process does not occur in vacuum, and is highly influenced by various factors such as social, cultural, personal and psychological factors. Although marketers have little or no influence on the mentioned factors, they still have some very important tools which may affect the buying decision process. The marketing mix, also known as the 4Ps product, price, place and promotion, is the set of controllable marketing tools that the firm uses to influence consumers behaviour in order to obtain a desired response from the target market (McCarthy, 1960). Online Buying Behaviour Since the expansion of the World Wide Web in the mid-1990s, the Internet has grown to become one of the most powerful distribution channels with a rapid increase in ecommerce transactions. This raised the need for marketers to discover the customers online behaviour and understand their decision making process when making purchases online. There are substantial differences between offline and online consumer behaviour. In his study, Vijayasarathy (2001) tried to clarify consumer online shopping behaviour by integrating web specific factors into the Theory of Reasoned Action (TRA). Furthermore Song and Zahedi (2001) examined the effects of website design on the adoption of internet shopping by developing on the model of the Theory of Planned Behaviour (TPB). Oppenheim and Ward (2006) argue that consumers are motivated to buy online because of the convenience provided. The internet provides unlimited opportunities for potential customers to purchase products at any given time and place. The internet also provides limitless information about products and services which is easily accessible to online visitors. Furthermore when comparing online shopping to traditional shopping, there are no waiting lines for shoppers on the internet and no pressure coming from sales people (Smith Rupp, 2003). However studies show that the internet has become a useful tool for comparative shopping, where users browse the web to search and compare products, whilst making it easy to abandon the purchasing process (Degeratu, et al., 2000). Furthermore Anfusos research (2004) shows that the online search for information about products drive offline sales. Consumers prefer to search for product information online since it is much more convenient, and hence purcha se the product from a brick and mortar store. Different authors have identified various divergent personas describing what the online buyers look like. Marker (2011) suggests that online buyers tend to exhibit the following psychological characteristics: egocentric, impatient, impulsive, educated, informed, thrifty, private, cautious, indecisive and pleasure-driven. In their study Donthu and Garcia (1999) propose that online shoppers tend to be convenience seekers and tare easily influenced by marketing campaigns. Furthermore they also put forward that internet users are less price and brand conscious, whilst also suggesting that these have a higher purchasing power. Other studies show that online customers are more likely to be of a young age with a high disposable income. It is also propose that they have a solid level of education especially in computer literacy, as well as being big retail spenders (Allred, et al., 2006). As mentioned earlier there are various factors which impact the traditional consumer behaviour. Liang and Lai (2000) suggest that online consumer behaviour has similarities with the traditional consumer behaviour, where consumers recognize a need for a product or service, use the internet to search for information, evaluate alternatives to choose the best solution and finally purchase the product followed by post purchase evaluation. However other studies indicate that there exist various factors that differ from the traditional consumer markets to the online environment. Refernce groups effecting consumer behaviour online have taken the form of virtual communities, consisting of blogs, forums and other forms of discussion groups (Huarng Christopher, 2003). Social influences, such as experiences, recommendations and tastes of online bloggers have an effect on online consumer buying behaviour and have a significant impact on the final decision the consumer makes. In their study Hasslinger, et al., (2007) highlight the fact that cultural differences also highly influece online consumer behaviour, especially the difference in social class the consumer belongs to. Consumers who form part of a higher social class have a higher probability of owning a computer with internet access, and thus they are more likely to purchase online than consumers from lower social classes. Personal influences effecting online behaviour also relates to the income the consumers earn, since there exists a positive correlation between households with higher income and computer possession, internet access and advanced level of education (Monsuwe, et al., 2004). Age was also recognised as being another determinant for effecting online shopping behaviour (Smith Rupp, 2003). Younger people are more pertinent in using the internet as a shopping medium compared to the older generation, since the latter tend to have less technical know-how and are far less inclined to commit and trust online vendors. Furthermore Smith and Rupp (2003) classify motivation, perception, personality, attitude and emotions as the set of psychological characteristics influencing online consumer behaviour. With the launch of Web 2.0 in 2004, the interaction between online consumers and vendors has become a reality, which became possible due to evolution of high-speed broadband connections. Web 2.0 consists of a collection of interactive tools and social communication techniques which are aimed to increase user participation and engagement online through its virtual word of mouth (Chaffey, 2011). In their study, Wirtz, et al., (2010), identify social networking and interaction factors as the two most important factors affecting online consumer behaviour from the Web 2.0 era. Moreover social networking provides online consumers with enhanced trust factors and helps retain online customers, which is fundamental for online retailers (Jarvenpaa, et al., 2000). In their research, Cheung, et al., (2003), analysed 351 publications and classified the theories used to understand online consumer behaviour. They conclude that the principal models in assessing this area are the Theory of Reasoned Action (TRA) together with the Technology Acceptance Model (TAM) and the Theory of Planned Behaviour (TPB). Other theories which have been tested include The Expectation Confirmation Theory (ECT) and Innovation Diffusion Theory (IDT). Table provides the list of the most frequently tested theories in the area online consumer behaviour together with their references. Cheung, et al., (2003) take a holistic view of the online consumer purchase process, where they investigate the connection between the intention, adoption and continuance of purchase from online consumers. Their Model of Intention, Adoption and Continuance (MIAC) recognised that businesses primarily focused their efforts in attracting online customers. However due to stiff competition, organisations changed their attention from initial purchase to retaining customers and building customer loyalty. Table : References of Online Consumer Behaviour Research Online marketers persuasion tools Consumers are subject to influences from marketers which might impact their purchasing behaviour. Marketers provide stimuli to the consumers black box in order to try and influence the consumers decision prior to making their purchase decision (Kotler Armstrong, 2001). The set of controllable (i.e., traditional marketing) and uncontrollable (i.e., environmental factors and personal characteristics of the consumer) factors between online and traditional markets do not vary fundamentally, where both markets have factors which are within the influence of marketers and some factors which fall beyond their reach. As discussed above, most uncontrollable factors are quite similar for both the traditional and online markets (Dibb, et al., 2001; Solomon Stuart, 2003). However a thorough analysis of the online consumer purchasing decision indicates that the controllable factors influencing the traditional markets are distinct from those influencing the online market. Although most of the traditional marketing activities, such as mass advertising and sales promotions, can be applied to the online market in order to try and influence the online consumer behaviour, they are likely to be futile due to the changing nature of the online consumer (Urban Hauser, 2003). Moreover, Constantinides and Geurts (2005) suggest that traditional marketing tools are ineffective when targeting potential global online customers dispersed across different geographical regions. Since most of the interactions between online customers and online vendors occur on the web, a logical assumption is that the main marketing influences produced from the online vendors are experienced by customers online. Online marketers can influence the online consumer behaviour primarily by delivering the proper online experience, more known as the Web Experience. The virtual marketing elements constructing the online consumers Web Experience are under the e-marketers control and can shape or influence the consumers behaviour during an online interaction (Constantinides, 2004; Constantinides Geurts, 2005). Forces influencing customers purchase intention (Model) The Web experience is a combination of online functionality, information, cues, stimuli and products/services (Constantinides, 2004). The company website is primary medium of delivering the Web experience, which is the gateway between the organisation and the online customers. Constantinides (2004) explores the idea of introducing the Web experience as one of the controllable marketing factors influencing the online consumers behaviour. Figure illustrates the controllable and uncontrollable elements influencing the online consumer behaviour. Figure : Forces influencing the online consumers behaviour Source: Based on Constantinides framework (2004) Web Experience Web Experience Elements Content Category Aesthetics Marketing Mix Psychological Category Trust and Commitment Functionality Category Usability Interactivity

Not All Homeless People Are Crazy Essay -- Are the Homeless Crazy?, 20

One of life’s truly rarest treasures is human unselfish charity. The greatest thing in the world is mutual understanding and the endless feeling of appreciation of having a Home. A place that every one of us has to have: where a happy, loving family could be born, where love, support and acceptance, no matter what, always are, and where kindness, warmness, understanding are sincere and never go away. I think those of us who have homes have to count ourselves exceedingly fortunate, because we are blessed. Home--the roof and the walls--protects us from outside pressure, and gives strength and desire to live, which is the important moral base of a psychologically healthy human being. But what about those who don’t have it? Those who we call Homeless? Unfortunately, there is always a dark cloud in a blue sky, and in â€Å"Are the Homeless Crazy?† Jonathan Kozol questions the primary cause of homelessness in the United States. Are the homeless people really â€Å"pa ranoids of the street† and â€Å"among the most difficult to help?† When I read, â€Å"Are the Homeless Crazy?† I was amazed how clearly and skillfully the writer shows the reality, the conditions, and causes of homelessness through presenting an impressive array of statistics and showing the numbers of homeless children. The author writes: â€Å"nearly half the homeless are small children whose average age is six,† and â€Å"since 1968 the number of children living in poverty has grown by 3 million† (463). He uses statistics to show the level of Federal support for low-income housing, which â€Å"dropped from $30 billion (1980) to 7.5 billion (1988),† the average of rents, the declining welfare benefits for families with children, the loss of traditional jobs in industry, â€Å"2 million every year since 198... ...the attempts of homeless people to overcome the misery and destitution must be heard and evaluated. People need the response from society on their unbearable and intolerable life conditions. Kozol makes very clear for everybody that nothing would be solved until everyone will be understood. Let’s just imagine what if we were in those people’s places, without a place to live, and in total destitution. Are we going to ask for help? I think people cannot be degraded to the level of crazy beasts; they don’t have to demean themselves and their families to ask and to accept official charity. I strongly believe that they can desperately implore for Dei gratia but not for society to deign to help. It isn’t too much to desire to have a Home. And it is not a crime to have it. Works Cited Kozol, Jonathan. â€Å"Are the Homeless Crazy.† Yale Review, 1988.

Ford Motor Company Analysis Essay

Executive Summary Ford Motor Company is an American automobile manufacturer founded and headquartered in Dearborn, Michigan but incorporated in the state of Delaware. The company was started by Henry Ford in 1903 and is historically famous for the creation and implementation of the assembly line in manufacturing processes. Ford’s mission is to produce and sell automobiles – cars, trucks, SUVs, etc – from the ones initially designed and engineered by Henry Ford all the way through the newer versions created in the last few years. (Profitable Growth for All, 2012) In 2011, the company performed strongly – producing revenues of $134,264,000,000 and net income of $20,213,000,000. Financial data has been gathered from the 2011 annual report and 10-K forms filed with the SEC for further analysis. Appendix A contains these reports and appendix B contains select financial ratios calculated in the analysis. The ratios are divided into six major categories: short-term liquidity, capital structure and solvency, return on invested capital, asset turnover, operating performance and profitability, and financial market measures. All six combine to provide an overall picture of financial health for the company. The below analysis provides evidence that, although Ford’s public stock may be overvalued, the company itself is in good financial health. Company/Industry Description Ford is one of the world’s largest producers of cars and trucks but also engages in other business sectors, particularly vehicle financing, through subsidiaries. The major segments of the automotive production and sales portion include Ford North America, Ford South America, Ford Europe, and Ford Asia Pacific-Africa. Ford Motor Credit Company is the predominant financing subsidiary of the firm. (Profitable Growth for All, 2012) As of 2011, Ford Motor Company’s vehicle brands included Ford and Lincoln; between the two lines, the company sold over 5.5 million vehicles through almost 12,000 dealerships around the world. (Profitable Growth for All, 2012) Since vehicles are durable goods, Ford and the entire automotive industry is highly affected by general economic conditions. Given the 2008 financial crises and its lasting effects, the sale of durable goods has been  relatively low in recent years. In addition to economic factors, Ford must also contend with competitors worldwide. The automotive industry is highly competitive and ever growing in terms of brands and the various vehicles offered by each. The high level of competition within the automotive industry, particularly in mature markets like the United States, has led to a very competitive pricing environment. Competitive pricing in automotive sales tends to surface in the form of price discounts, marketing incentives, and financing incentives to attract customers to a particular brand since vehicles do not tend to be highly differentiated products. In terms of brand recognition, Ford is well known as one of few American car makers still thriving and is probably best known for its pick-up trucks and sports cars, particularly the Mustang. Findings and Assumptions Select financial ratios have been calculated based on Ford Motor Company’s financial statements from 2011 and can be found in Appendix B. The financial statements used for calculations are contained in Appendix A. Based on the calculations, analysis of short-term liquidity, capital structure and long-term liquidity, return on invested capital, asset turnover, operating performance and profitability, and financial market measures are included here. Ford’s short-term liquidity looks promising. The current ratio of 1.16 is good; it shows that the company can pay its short-term obligations 1.16 times. Typically, a current ratio over 1 is considered healthy, though higher is definitely better. (Wahlen et al, 2008) At first glance, Ford’s cash ratio of 0.52 seems a bit weak. It shows that, although the company can meet its short-term debts per the current ratio, it only has enough cash on hand to meet 52% of its short-term obligations. The financial statements included tend to combine cash and marketable securities into a category labeled â€Å"cash and cash equivalents†. If the cash ratio is recalculated using this value instead of simply cash than the ratio improves to 1.10, which shows much stronger liquidity capabilities. Long-term solvency for Ford Motor Company also appears to be strong. The company’s times interest earned ratio of 1.96 means that it can cover its  interest charges on current debt issues almost two times over. This is a good sign that bankruptcy is not eminent and the company is solvent in the long-run. A higher debt to equity ratio means a company gets a larger portion of its financing from creditors than shareholders, though higher is a subjective measure and depends on the industry. (Wahlen et al, 2008) Automotive manufacturers tend to have debt to equity ratios above 2 because the industry is capital intensive. (Debt/equity ratio, 2014) Ford’s debt to equity ratio in 2011 was 10.89, far higher than the industry standard, potentially due to the circumstances of the time. The financial crisis of 2008 resulted in major financial bailouts across the automotive industry. These large levels of debt to the government would increase the debt to equity ratios of all compa nies that accepted the money. In addition to both short and long term solvency, a company’s return on invested capital should be analyzed when determining its financial health. Ford’s return on assets from 2011 is 11.3%. This number seems strong on its own but the best information comes from comparing it to either competitors or previous years in the same company since return on assets varies drastically across industries. (Wahlen et al, 2008)) In 2010, Ford’s return on assets was only 4%. This increase is a significant improvement since the two ratios show that, in 2011, $100,000 of assets would generate $11,300 in income while the same assets in 2010 would have only generated $4,000 in income. Ford’s return on equity in 2011 was 134%, a hugely impressive ratio! This calculation shows that $100,000 in shareholder equity would generate $134,000 in income. Considering the ROE in 2010 was negative, this is an extreme improvement in profitability for the company. In 2010, Ford’s asset and inventory turnover ratios were excellent. The total asset turnover of 74.9% shows that the company is effectively deploying their assets and has been able to generate $74,900 profit for every $100,000 in assets. This is not surprising considering the high return on assets analyzed earlier. Days sales in inventory for Ford in 2011 was only 19 days – meaning the company could convert inventory to sales in less than 3 weeks. Like return on assets, the acceptable level of inventory convertability varies drastically from one industry to another. (Wahlen et  al, 2008) In recent years, automotive companies have averaged over 60 days for this inventory ratio. Ford’s 2013 days sales in inventory was almost 90 days and increased by 26% to over 100 days in January of 2014. These increased numbers are likely a result of the slow economic recovery and consequential decrease in car sales. (Young, 2014) Operating performance and profitability ratios, including fixed asset turnover ratio and operating performance ratio, also show financial strength for Ford Motor Company. The fixed asset turnover ratio of 5.62 shows that the company is able to generate significant revenues from fixed assets, i.e. property, plant, and equipment. Ford’s operating performance ratio of 15.06 also shows that the company is performing strongly. Ford’s price-earnings ratio of 3.15 means the company’s stock was trading at 3 times the earnings value as of December 31, 2011. This shows that investors were willing to pay 3 times its worth to own Ford stock, signifying that earnings growth was expected. The market-to-book ratio of 4.23 means that the market value of the stock is 4.23 times the book value of the same stock. In other words, Ford’s stock was overvalued in excess of 4 times its book value. Crucial Factors Many crucial factors play a role in analyzing a company’s financial situation. Some of these factors are internal – such as management, particularly changes in management, and the business model. Other factors are external – examples include governmental action, competitors, and the overall economic state. The above analysis of Ford Motor Company incorporated numerous crucial factors when interpreting the selected ratios and their piece in the overall financial health of the company. Conclusions Overall, Ford Motor Company seems to be in good financial health as of the end of 2011. Both short and long term solvency are strong, particularly when marketable securities are included in the cash ratio calculation. Ford’s capital structure is heavily tilted towards creditors, though this is likely due to the governmental bailout and lack of investors in the slowly recovering stock market. Return on assets and return on equity are both  impressive, particularly when compared to data from the previous year. In 2011, Ford had excellent asset and inventory turnover statistics. Unfortunately, these have since declined – most likely due to the decrease in automotive sales in today’s slowly recovering economy. Operating performance and profitability standards both show financial strength and good performance, though the financial market measures indicate that investors may be more ambitious than they should be about the performance strength. References (2012). Profitable growth for all: Ford motor company 2011 annual report. Retrieved from Ford Motor Company website: http://corporate.ford.com/doc/2011 Ford Motor Company AR_LR.pdf Debt/equity ratio. In (2014). Investopedia. Retrieved from http://www.investopedia.com/terms/d/debtequityratio.asp United States Securities and Exchange Commission, (2012).Ford motor company 10-k . Retrieved from Ford Motor Company website: http://phx.corporate-ir.net/phoenix.zhtml?c=87772&p=irol-SECText&TEXT=aHR0cDovL2Fwa S50ZW5rd2l6YXJkLmNvbS9maWxpbmcueG1sP2lwYWdlPTgwODI3MDYmRFNFUT0wJlNFUT0wJlNRREVTQz1TRUNUSU9OX0VOVElSRSZzdWJzaWQ9NTc= Wahlen, J., Baginski, S., & Bradshaw, M. (2008).Financial reporting, financial statement analysis, and valuation. (7th ed.). Mason, OH: South Western CENGAGE Learning. Young, A. (2014, Feb 13). Us new auto inventories highest since ’09; gm, volkswagen top list; kia, hyundai up most; toyota stock at ‘healthiest’ level. International Business Times, Retrie ved from http://www.ibtimes.com/us-new-auto-inventories-highest-09-gm-volkswagen-top-list-kia-hyundai-most-toyota-stock-healthiest

Sleep Loss On Attention And Cognitive Performance Essay

How often do you hear people complain about being tired all the time? Sleep deficiency has been investigated for years, but there has been no single method to explain why people nod their heads asleep in crucial times focus: during an important class lecture or even at the wheel. However, it is clear that without a good night’s rest, sleep-deprived individuals can find it difficult to pay attention, even if they want to stay awake. Thus, it becomes important to examine the underlying mechanisms that explain the negative effects of sleep loss on attention and cognitive performance. Sleep effects can be measured by alertness, which describes the overall state of the cognitive system and can be attributed to two primary components: a circadian system and a sleep homeostasis system (Ã…kerstedt Folkard, 1995). 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