Impact of Culture on Consumer Purchase Decision Process
Questions:
1.You are required to identify at least two social influences that are relevant to the consumers of your firm or the firm you intend to work for (choose one product/service if more than one is offered by your firm) and analyse, specific to your firm, how the two or more social influences (culture, social class or reference groups) impact on the consumer purchase decision process.
2.Draw on the theories in chapters 2-4 to discuss how marketers (in your firm) can apply this critical understanding of social influences on consumer behaviour to improve/enhance your firm’s marketing strategies (4 Ps or 7 Ps, targeting, market segmentation).
1.The two social influences, which influence the personal banking services consumers of the chosen organisation namely, Australia and New Zealand Banking Group Limited are culture and social class factors like lifestyle and income of the customers. The following is the analysis of the manner the three factors namely, culture, social class and reference group influence consumer purchase decision. The chosen organisation is Australia and New Zealand Banking Group Limited headquartered in Melbourne and the chosen product would be personal banking services the bank provides to its individual customers (anz.com.au, 2017). The answer would analyse how the three stated factors influence consumption purchase decision-making process. Consumer purchase decision-making process can be defined as the process in which the consumers decide their consumption of the products (goods and services). The analysis is as follows:
The term culture can be defined as the synthesis of beliefs, values and customs that influence consumer behaviour. Culture also encompasses art, moral beliefs, lifestyle, income, and education. Consumers take these factors while purchasing goods and consuming them. Banking companies like Australia and New Zealand Banking Group Limited provide personal banking services to these consumers. The personal banking services includes savings bank accounts, credit cards, insurance products, travel related services and loans to purchase expensive products like cars and houses (Martins, Oliveira & Popovi?, 2014). Income and lifestyle decides the level of savings, purchases using credit cards and taking of loans to buy assets like premium cars. The savings banks services provided by banks like Australia and New Zealand Banking Group Limited encourage consumers to save for their future needs (Fonseca, 2014).
Melbourne is the capital of the Australian state of Victoria and an international cultural centre. Australia is a developed economy with a high per capita income. This means that the people of Australia have more disposable to spend on luxurious goods and services. An analysis of the consumption habits of the people of Australia and Melbourne in particular shows that the consumers have high consumption habits. The culture of Australia shows influences of European, American and Asian culture. The consumers of Australia enjoy buying premium goods imported from these markets. This aspect of Australian culture makes the people of Australia personal loans and use credit cards of multinational banks. For example, they take car loans from multinational banks like Australia and New Zealand Banking Group Limited to buy cars and expensive electronic goods imported from these markets (Shaikh & Karjaluoto, 2015).
Influence of Social Class on Consumer Behaviour
Education and lifestyle have very strong influence on consumption decision of people. The literacy rate of Australia is very high which enable people to get highly paid jobs. The Australian consumers spend a huge amount of money on culture and recreation. They enjoy watching films, gifting, celebrating festivals and visiting places. They use banking services like credit cards and internet banking to make payments for these enjoyments, which form a part of Australian culture (Baptista & Oliveira, 2015).
Travelling has emerged as a part of Australian culture due to increase in disposable income. The Australian customers use personal banking products like travel insurance and foreign exchange services provided by the multinational banks like Australia and New Zealand Banking Group Limited while travelling (Lin et al., 2014)
The analysis above reveals fours aspects of how culture influences consumption decision of the consumers of Australia. First, the banking system encourages the consumers to save which makes them use the saving bank account services of banks like Australia and New Zealand Banking Group Limited. Secondly, foreign influences from Europe, Asia and America have become a part of Australian culture. They use credit card and loan services of the bank to avail expensive foreign goods (Khan & Fasih, 2014). Third, entertainment and gifting have become important aspect of Australian culture. The consumers use credit cards and internet banking services to meet this cultural need. Fourth, the Australians love travelling and use services like travel insurance and foreign exchange facilities for the purpose (Yadav, Rai & Srivastava, 2014). Thus, one can infer from the discussion that culture has strong impact on the consumption purchase decision process.
Social class is an important factor, which influences consumer behaviour. Social class can be defined as the population of consumers who have approximately same social position. The consumers take factors like income, power and occupations while deciding their consumption. Social class has strong influence on the products consumers consume. For example, the Rewards Travel Adventure Card of the Australia and New Zealand Banking Group Limited charges the consumers with $225 and is designed to meet the requirements of people who travel. Similarly, ANZ Low Rate credit card charges the user annually $ 58 and does not give travelling benefits. These two credit indicate the consumption patterns of the two social classes of consumers (Kaura, Durga Prasad & Sharma, 2015). The Rewards Travel Adventure Card charges higher annual maintenance cost and offer the holders benefits like travel insurance. These two features clearly point out to the upper class of the society. ANZ Low Rate credit card on the contrary charges amount of $ 58 and does not give the holder benefits like travel insurance. This product is clearly target consumers who do not travel much. One can also infer from this comparison that the Rewards credit card target the high-income social class who travel for both entertainment and profession. Thus, the first credit card targets the upper class consumers while the second credit card target lower class consumers (Narteh & Kuada, 2014). This analysis shows that social class influences the consumption pattern of the consumers.
Role of Reference Groups in Consumer Decision Making
Social influence factor 3: Reference Group:
Reference groups have very strong influences on the consumption pattern of the consumers. The term reference group can be defined as the individuals or groups, which influences the attitudes, perceptions, standards and ultimately the consumption pattern of consumers. The reference group today also include the social networking sites and online review sites which influence the consumption decision of the consumers. Reference groups have strong influences on the consumer purchase decision process (Yadav, Rai & Srivastava, 2014). For example, positive reviews by consumers who have benefitted by the services of the Australia and New Zealand Banking Group Limited would encourage new consumers to purchase the services of the bank. Similarly, the positive reviews and perceptions of friends, relatives and acquaintances would encourage new customers from using the services of the bank. Contrarily, the negative reviews from the consumers who perceive the services of the bank to be of poor quality would discourage the new consumers from banking with Australia and New Zealand Banking Group Limited (Biran et al., 2014). Thus, it can be inferred from the discussion that reference groups have very strong influence on the consumption decisions of consumers.
2.The marketers of organisations like Australia and New Zealand Banking Group Limited can apply their understanding influences of the three social influences namely, culture, social class and reference groups on the consumer behaviour to improve and enhance their marketing strategies (Tsitsi Chikandiwa, Contogiannis & Jembere, 2013). The following section would analyse how business organisations can use these three influencing factors taking into account two theories namely, the marketing mix(4Ps) and the STP or the segmentation, targeting and positioning which are also marketing strategies.
Marketing mix, often referred to as the foundation theory of marketing strategies can be defined as the marketing strategies which business organisations make taking into account 4Ps namely, product, price, promotion and place.
Product:
The term product can be defined as anything that can be offered for sale in the market at a price and can create utility to the consumers. The term embraces both physical products or goods and intangible products, known as services. The business organisations should design products according to the consumption pattern of the consumers. The culture, social class and reference group have deep influence on the consumption and purchase decision of consumers. Thus, the producing organisations should incorporate the culture, social class and reference groups while forming product strategies (Parveen, Jaafar & Ainin, 2015). For example, Australia and New Zealand Banking Group Limited takes into account these three determining factors while forming service packages. The bank offers internet banking and credit card services so that customers can buy tickets to avail cultural shows and expensive products as per their convenience. Again, the Rewards range of credit cards are designed to suit the needs of the upper class consumers who travel as a form of entertainment. The ANZ low rate credit cards allow the lower class people to shop. The bank makes positive customer reviews available on its website to the customers to encourage them to bank with it (Williams & Adams, 2013). This analysis of the services of the bank shows that it incorporate the three deciding factor to form its product strategies.
Application of Understanding of Social Influences on Marketing Strategies
Pricing:
The term pricing refers to the strategy of fixing appropriate prices for products, which target customers, and generates revenue for the company. Australia and New Zealand Banking Group Limited incorporates culture, social class and reference group to price its products. For example, the bank prices the Rewards range of credit cards at $225 to attract upper class customers. Similarly, the bank targets lower class customers with the low rate credit cards (Muhanji & Ngari, 2015). This appropriate pricing strategy to target the right social class of customers allow the bank to create customer satisfaction and generate high revenue.
Place:
Place, in marketing place refers to the arrangement, which allow the producer meet the seller and sell the product. The term embraces both physical places like retail outlets and ecommerce platforms. Australia and New Zealand Banking Group Limited makes its services available to its customers both in the physical branches and on the internet platform through internet banking. The customers are able to avail banking services as per their convenience, which creates positive perception among them. This helps the bank to create positive reference group, which give positive reviews about the bank to the new customers and help the bank to gain new customers. This analysis shows that the bank uses reference group to market its products.
Promotion:
Promotion in marketing can be defined as the advertising of products by business organisations to create awareness among the customers, create demand, generate sale and earn profits. The Australia and New Zealand Banking Group Limited promotes its services taking into account the cultures, social classes and reference groups to attract appropriate customer group. For example, to attract the upper class of customers in Australia who enjoy consuming premium products like expensive cars, the bank offers personal loans, which allow these customers to increase their loan amount as per convenience. This helps the bank create customer satisfaction among upper class customers. These satisfied customers acts as positive reference groups to promote the services of the bank among new customers. This shows that the bank uses references groups and social class to promote its products.
The STP or segmentation, targeting and positioning theory can be defined as the strategies in which business organisations segment, target and position their products in the marketing.
Segmentation refers to dividing the market into groups of customers or segments based on their attributes like culture, social class and reference groups. The business organisations like Australia and New Zealand Banking Group Limited use segmentation strategy to attract appropriate customer groups to sell goods and services and earn profits. For example, the appropriate consumer segment for the ANZ low rate credit card are the low income customers while the apt consumer segment for internet banking services are the technologically aware customers. This analysis shows that the bank uses segmentation as a strategy to offer appropriate services to attract different segments of customers and earn huge profits.
Targeting refers to the targeting of customers to sell goods and services to earn profits. For example, Australia and New Zealand Banking Group Limited targets the upper class customers to sell its expensive high-end credit cards. This aggressive targeting strategies of multinational business organisations like Australia and New Zealand Banking Group Limited allow them to sell their products to appropriate customer groups to earn profits.
Positioning can be defined as the strategies, which business organisations use to create positive relationship with the consumers to encourage future business and generation of profit. For example, Australia and New Zealand Banking Group Limited positions itself in Australia as a multinational bank offering appropriate personal banking products like credit cards and savings bank account both for the upper class and the lower class customers. This helps the bank serve both the social classes to generate huge revenue. Thus, appropriate positioning strategy considering factors like social class enable organisations to cater to a large customer base and earn huge profits
References:
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