Buying Decisions of Consumers Evaluation Essay

Since the introduction of the first Blackberry Smartphone in 2002, the Smartphone market has tremendously grown from a backdrop of information explosion. Park (2011) claims that the number of people who use Smartphones have tremendously grown to about one in every three adults.

This increased the demand for Smartphones heralded the expansion of the Smartphone market. Chow and Chen (2012) project the global shipment of Smartphone gadgets to increase to about one billion, by the year 2015.

The increased adoption of Smartphones in the mobile phone market has come at an opportune time because feature phones are becoming increasingly obsolete.

Feature phones have traditionally dominated the mobile phone market, but because of the increased demand for new applications among mobile phone users (and the sophistication of software engineering), feature phones are slowly phasing out, to give way for the adoption of Smartphones.

Since Smartphones have infused new features and technologies that were earlier nonexistent in feature phones, the factors informing its adoption greatly differ with those that affect the adoption of feature phones.

Indeed, Smartphones are able to perform even the most sophisticated tasks (normally a reserve for computers), while feature phones were only able to perform basic tasks such as calling and text messaging. Therefore, from the increased adoption of new applications in Smartphones, the gadgets have penetrated a new category of customers, tech-savvy customers.

Considering the adoption of Smartphone is a new and emerging trend, it is critical to point out that most research studies investigating the adoption of Smartphones have done so by viewing Smartphones as a specialised tool, such as Smartphones for clinical purposes.

However, researchers like Cheong and Park (2005) disagree with this view because they see the adoption of Smartphones, not for specialised purposes but rather, for general purposes.

According to Hutt (2009), the purchase of a Smartphone (for any consumer) highlights an information cascade, which also stems from a decision-making pattern, where decisions from people of influence affect consumers’ purchase decisions.

For example, before a consumer decides to buy a Smartphone, he considers other buyers’ decisions (creates awareness regarding other buyers’ decisions) and infers a specific message from what is known by previous buyers (Hutt 2009).

Ilyas (2006) contends that the decision to buy a Smartphone is normally dependent on the level of satisfaction a customer experiences when the purchase ends.

Before consumers make the decision to purchase the product, Ilyas (2006) believes that consumers experience several cognitive processes including “recognition, search information, evaluation, and ultimately the purchase decision” (p. 4). The provision of feedback regarding the customer’s user experience may follow this process.

Varying psychological and market factors normally affect a customer’s buying experience. However, these factors do not always show similar results for different customer groups.

Indeed, different consumers have different tastes, preferences, motivations, and lifestyles that affect their decisions to buy a Smartphone. For example, some consumers are always willing to buy Smartphones at a premium, while others are hesitant to do so.

Similarly, some consumers are always looking out for good quality Smartphones in the market, while others do not see this need. Park (2011) believes that most of these consumer dynamics represent varying customer characteristics.

“Brand conscious, price conscious, quality conscious, recreation conscious, innovation conscious, confusion over choice, impulse, and brand” (Chow and Chen 2012, p. 44) further characterise these characteristics.

From the complexities and dynamics informing consumers’ buying decisions, the importance of understanding the factors that affect consumers’ buying decisions is very important.

Product Features

Product features distinguish different products, not only in the Smartphone market, but also in other competitive markets as well (Kupiec and Revell 2001). In the Smartphone market, a product feature denotes a product’s attribute that is capable of satisfying a specific consumer need.

This need is satisfied from using the product’s feature. Sexton (2007) posits that today’s rapidly changing market has proved that different features bring different levels of satisfaction for every Smartphone user.

Indeed, as Chow and Chen (2012) demonstrate, “in this new era, phones now feature with wireless connectivity, a built-in Web browser, application installation, full programmability, a file management system, multimedia presentation and capture, high-resolution displays, several gigabytes of storage and location and movement sensors” (p. 45).

Chow and Chen (2012) say, besides the above features, users also look for the best operating systems and cameras when making their decision to purchase Smartphones.

In this regard, Chow and Chen (2012) say the most popular operating systems for Smartphone users are “Symbian, RIM Blackberry, Apple iPhone, Windows mobile, Google’s Android, and Linux” (p. 46). Each operating system manifests its uniqueness, based on the different backgrounds they hail from.

Oulasvirta and Wahlstrom (2011) add that Smartphone consumers normally select phone attributes that provide them with the specific benefits they are looking for. He also adds that most of these attributes reflect consumer personalities (Oulasvirta and Wahlstrom 2011).

Therefore, Smartphone users select phones that mirror their personalities and add value to their lives, depending on how much importance they attach to integration.

Wickliffe and Pysarchik (2001) also say consumers use phone attributes to make the distinction between competitive brands and Smartphone brands that marketers impose on them.

Marketers similarly acknowledge this distinction and create advertisements that highlight a phone’s attribute to influence a consumer’s ability to substitute a phone’s attribute for another (Puth and Mostert 1999). Comprehensively, product features influence consumer buying decisions.

Brand Name

In today’s globally competitive market, companies cannot underrate the importance of product differentiation. Indeed, portraying brand superiority adds to a company’s profitability (within several competitive brands).

Indeed, researchers have affirmed the importance of brand superiority in improving a product’s value among its customers. Mei and Dean (1999) admit, brands also communicate a product’s knowledge structures that are cognisant of the product’s brand superiority.

Brand names therefore improve a product’s value by simply appealing to the consumer’s cognitive perception. Therefore, when a product comes from a respectable brand, consumers automatically attach the same value to the product.

Different companies advertise different product attributes in their branding strategy. Some companies package their products to be superior in quality, while others package their products as ‘pocket friendly.’ Some Smartphone manufacturers even package their products as reliable brands that withstand even the toughest environments.

Recent years have seen Smartphone companies package their phones as durable items. Consumers have tested such attributes through experiments like dropping a phone on concrete, to see if it cracks. People have broadcast such experiments in social media sites including YouTube (and the likes).

Branding helps to package such product attributes (such as durability) to create a perception that such products portray the conveyed message. For example, as portrayed in the above example, a company’s branding strategy may hinge on durability.

Therefore, whenever consumers see a given brand, they immediately assume the product is durable. A company may similarly brand its products to be reliable and therefore, whenever companies expose consumers to the given product, consumers assume it is reliable (Chow and Chen 2012).

Some phone companies have successfully managed to brand their products as such, and are attracting a huge user base. Some technology companies like Apple Incorporated have successfully managed to brand their products as having superior quality and reliability.

Apple Incorporated has also successfully managed to market its brand as innovative and therefore, whenever customers purchase Apple iPhones, they expect it to have some ‘innovative attribute’ that other brands do not have. Srinivasan and Till (2002) define the value of brands as brand equity.

Dodds and Monroe (1991) add that brand equity plays a big role in brand building. The advantages of successful brand building are obvious to companies because companies have been able to develop sustainable competitive advantages through this process. This works when consumers have a successful perception of specific brands in the market.

Since the early 2000s, companies have identified their most important assets to be their brand names. Chow and Chen (2012) affirm this observation by saying

“In the recent aggressive competitive marketplace, the most critical success element for companies is the brand name, that were being used in a product, and further stated that the brand names are considered the last source of differentiation for the companies’ products and services” (p. 50).

According to Khasawneh and Hasouneh (2010), brand names have a strong impact on consumer’s buying decisions because they affect their product evaluation process, which later informs their buying decisions.

Therefore, through branding, Smartphone companies have been able to differentiate their products from the competition. Nonetheless, at this point, it is crucial to say, brand names do not only denote ‘names,’ they could also mean symbols, terms, or designs.

Many companies have benefitted from introducing brand extensions. Many companies have adopted this strategy to benefit from brand knowledge. In other words, new products that stem from a successful branding campaign experience a low failure rate and low marketing costs.

Comprehensively, consumers are likely to be attracted to successful brand names in the market. In turn, companies gain from brand recognition (in the short-term) and brand loyalty (in the end).

Price

For a long time, researchers have investigated the effect of price on consumer buying decisions. These researchers later say price plays a big role in the consumer decision-making process because price acts as a monetary value for the trade of goods and services (Chow and Chen 2012).

In this regard, Nagle and Holden (2002) claim that price remains a key concern for consumers, before they make any purchase decision (not only within the Smartphone market). The price of a Smartphone normally affects the behavioural intentions of consumers.

Price also has a close association with a product’s brand because price defines a product’s image. Market researchers have always said that consumers perceive high pricing to mean high product quality, while low pricing denotes low product quality (Chow and Chen 2012).

For purposes of conceptual convenience, it is pertinent to understand that pricing models divide into two groups: low priced goods and highly priced goods (Smith and Carsky 1996). As explained in this paper, highly priced Smartphones have a very keen emphasis on the product’s image.

Therefore, consumers who purchase such highly branded products also want to enjoy the positive product image that comes with the high pricing. Such consumers are also willing to pay a premium so that they have a premium product of high quality.

Ordinarily, such a consumer group is willing to buy a Smartphone (expensively) for its perceived high quality and status. When such consumer groups form the biggest part of the market, such a market is price inelastic.

Consumers purchase low-priced Smartphone because of their perceived value. Such groups of consumers are more wary of the utility they are going to derive from such purchases than the perceived status they derive from the same.

Such purchase decisions therefore centre on utilitarianism (perceived value for the price). Consumers who make purchase decisions using this strategy always look for lowly priced Smartphones or substitute some brands for others because of their perceived value (Chow and Chen 2012).

Despite the decision-making clusters adopted by each consumer group described above, Aaker and Keller (1990) still believe that both consumer groups (high-end and low-end) believe that high product prices reflect premium quality, while lowly priced Smartphones reflect inferior quality.

These findings reflect similar findings done by Etgar and Malhotra’s (1981). Indeed, Etgar and Malhotra’s (1981) affirmed that consumers would always perceive products with high quality to have a superior quality and low-priced products to have a lower quality.

However, this perception may not always be true in the Smartphone market considering there may not be much difference in product features or quality of different bands (from completely different price categories).

However, Chow and Chen (2012) admit that if a Smartphone is highly priced and the product quality relatively meets the consumers’ expectations, the consumer may still be willing to pay a premium for the specific product.

Chow and Chen (2012) say the proliferation of Smartphone brands in the phone market has further intensified the price perception among Smartphone buyers because it has become increasingly difficult to distinguish one brand from the other.

Consumers are therefore using product pricing to distinguish one brand from the other. Most of the cognitive or buying decisions formulated by the buyers purely stem from perception.

From this background, Khasawneh and Hasouneh (2010) claim that it is very crucial for Smartphone companies to stop ignoring the impact of pricing decisions on their products because price has been proven to affect consumer buying behaviour.

The importance of pricing decisions on consumer purchasing behaviour manifests in the online shopping phenomenon where consumers are willing to pay a premium (high prices) for the convenience and security offered on online shopping.

Chow and Chen (2012) also agree that 90% of customers use price constructs to scrutinise different products from different companies. Customers do so frequently.

Comprehensively, price constructs denote a psychological phenomenon that appeals to consumers’ cognitive processes and buying decisions. Comprehensively, this persuasion improves the sales margin. This happens through the exploitation of consumer willingness to pay (especially for high-end products).

Therefore, among all the marketing mixes exploited by marketers worldwide, pricing is a very critical tool for appealing to customer willingness to buy products. Comprehensively, in the context of this study, pricing is one factor that determines consumer-buying decisions when purchasing Smartphones.

Social Influences

Social influences border on the ability of a person to influence the activities of another person. This influence occurs through the ability of a person to influence the attitudes, feelings, and thoughts of others. This may occur either intentionally or unintentionally (through the interaction with other people).

The main influences in social interactions come from media sources, friends, and people from other spheres of influence (such as colleagues). Social influences thrive on the perception among customers regarding the perception of other people towards them.

This group of customers also thrives on having a sense of belonging to a specific social group or class. A research group in America claims that peer influences are the primary source of influence in social interactions (Chow and Chen 2012).

Secondary influences are the media and parents. However, today, the role of the media in defining consumer tastes, fashion, and interests regarding a specific brand is increasingly strong (from the influence of the media and other sources of influence, consumers learn the skills, knowledge and attitudes relevant for consumption).

Nelson and McLeod (2005) draw a sharp distinction between conformity, power, and authority, which manifest whenever the influence of social interactions occurs as the main influence for consumer buying behaviour.

Mourali and Loroche (2005) say conformity always manifests when consumers make buying decisions so that they meet the expectations of other people. However, power is a way of exerting one’s influence over people to gain control and determine the overall outcome of their interaction.

Those who wield this power often perceive authority as a legitimate power. Power and authority are therefore strong influences regarding the way consumers make their purchasing decisions because people derive their actions from the word of other people. This is human nature.

For example, among teenagers and other young people, researchers affirm that both males and females seek their fashion advice from friends and other people of influence in their lives. Therefore, depending on the fashion preference of these people, consumers are bound to follow the same fashion preference as their peers.

The same pattern occurs during the decision-making process to purchase Smartphones from phone manufacturers. Consumers are then motivated to buy phones that their friends approve and have.

A recent research by Mourali and Loroche (2005) showed customers who purchase Smartphones as the greatest consumers of social networking applications (such as Facebook and Twitter) because of the ability of such applications to ease social interactions.

Consequently, Smartphone users use these applications to stay in touch with their friends and other people of influence in their lives. Through such applications, the influence of peers, friends and colleagues in informing consumer buying decisions remains strong (even though indirectly).

Motivated by the willingness of people who have the same school of thought, feelings, and attitudes, Smartphone users are motivated to seek phones that enable them to stay in touch with one another within their circles of influence. Through this sphere of influence, social interactions influence consumer-buying decisions.

Hutt (2009) claims that another issue affecting a buyer’s decision to purchase a Smartphone stems from the direct benefits that the customer enjoys from the purchase.

This effect is normally realised when the direct benefits to be enjoyed from the purchase stems from the reactions or opinions of other people regarding the purchase. Therefore, unlike the ‘informational effect’, the direct benefits effect does not depend on changing one’s information.

For example, if a prospective Smartphone buyer intends to make a choice regarding which type of operating software to use, he would potentially consider the user base for every type of software available in the market (Android, windows, and the likes).

The size of the user base therefore influences the consumer experience when using such a phone (often, the user experience improves with operating systems that have a wide user base because of an increase in applications).

The logic behind the selection of applications that have a wide user base stems from the expansive array of willing users to help a frustrated user through online support (Cheong and Park 2005).

Through this logic, it is easier to understand the reasons for the large consumer base that android Smartphones have around the world. It is also easier to understand why it is more economical for Smartphone developers to develop more applications for an expanded audience, rather than a small audience.

From the above consumer decision-making frameworks, evidently, many factors affect consumer buying behaviour. Product brand name, price, social interactions, and product features are among the most notable factors influencing the way consumers make the decision to purchase Smartphone.

Almost all consumer groups feel motivated by at least one factor (among the above) to make their purchase decision. Depending on the demographics of the consumer group, price, brand name, social interactions, and product features are bound to affect consumer purchase decisions in the Smartphone market.

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