1 Consumer Behavior (MKT510) Table of Contents: I. Introduction.................................................................................................................3 1.1 Background to the report..........................................................................................3 1.2 Aims..........................................................................................................................3 II. A brief overview of Nike............................................................................................4 III. Motivation..................................................................................................................4 3.1 Theories of motivation………………………………………………………………4 3.2 Influences of motivation on consumer decision process……………………………5 3.3 Application..................................................................................................................6 3.4 Recommendation..........................................................................................................7 IV. Personality....................................................................................................................8 4.1 Theories of personality.................................................................................................8 4.2 Influences of personality on consumer decision process..............................................9 4.3 Application………………………………………………………………..…..……...10 4.4 Recommendation…………………………………………………………………..…11 V. Conclusion.....................................................................................................................12 References……………………………………………………………………..………13-14 2 I. Introduction: 1.1 Background to the report: In recent years, the study of consumer behaviors is very important for marketers to improve marketing strategy, as well as increasing the sales profit for the products. Through analyzing consumer behaviors, marketers can get information related to the consumer purchase decision. Thus, they can design a specific marketing strategy to appeal to their consumers (Lamb et al., 2011). It is suggested that most organization should appreciate the importance of consumer behavior in making every decision related to marketing strategies. There are external and internal factors that impact on the consumer purchase decision process (Quester et al., 2014). In term of external factors, culture, social group and reference group are identified that significantly influence the consumer behaviors. In contrast, internal factors which considerably impact on the consumer purchase decision are needs, motivations, personality, consumer perception, learning, and involvement and consumer attitudes. This report will focus on two individual factors including motivations and personality. Firstly, according to Quester et al. (2014), motivation is the stimulating force that activates the behavior, as well as provides purpose, direction for that behavior. Secondly, personality is described as an individual’s characteristic response tendencies in similar situation (Quester et al., 2014). 1.2 Aims: This report aims to: • Identify and discuss in details two individual influences such as motivations and personality • Analyze their impact on the consumer purchase decision process • Discuss how the marketers of Nike can apply the understanding of individual influences on consumer decision making to enhance the marketing strategies 3 II. A brief overview of Nike: Nike is established in 1969 and operates in North America, Europe and Asia markets. The firm produces and sells athletic footwear, apparel, sporting equipment and accessories. In its annual report in 2014, one of Nike’s objectives is focusing on analyzing customer behaviors to implement an effective and efficient marketing strategy for increasing sales profit (Nike Annual Report, 2014). III. Motivation: 3.1 Theories of motivation: Firstly, it is essential for marketers to identify the motives that influence their target markets (Lamb et al., 2011). Recent studies indicated that motives can provide marketers with useful insights into how they can design strategies for different products and services with different target markets (Quester et al., 2014). In general, motivation is the reason for behavior of consumers. According to Quester et al. (2014), a motive is a construct that represents an unobservable inner force of consumers and drives their response until the inner force is satisfied. Therefore, a motive has three basic elements such as the triggering of a behavior, the general direction of that behavior and its persistence until satisfaction is achieved. However, Kruglanski et al. (2002) stated that a motive cannot be seen, so the existence of a motive is always inferred from behaviors. In addition, motivations depend on the specific situation (Leary, 2007). To be more specific, motives which influence behavior in one situation may not exist in another situation. For instance, some consumers with a strong need for affiliation may buy an expensive wallet to feel more comfortable in their relationship with their peer group. However, other consumers with a high need for affiliation may not be driven by that motive in the purchase of expensive wallets because this purchase is unlikely to be observed by others in their peer group. Therefore, although motivations are strong, they still depend on different situation. 4 There is one main theory of main theories of motivation named Maslow’s hierarchy of motives. Actually, Maslow’s hierarchy of motives is a macro theory designed to account for most human behavior in general terms (Maslow, 1970). Moreover, Maslow demonstrated a hierarchy of motives that is common to all individuals (Maslow, 1970). There are five levels in this hierarchy. • Physiological: These motives include food, water, and sleep. • Safety: These motives include physical safety, stability and family surroundings. • Belongingness: These motives include the desire for love, friendship, affiliation and group acceptance. • Esteem: These motives include the desire for status, self-respect and prestige. • Self-actualization: These needs include the desire for self-fulfillment. 3.2 Influences of motivation on consumer decision process: Through theories of motivation, it can be proposed that motivation significantly influences the consumer behaviors, especially the making purchase decision process. According to Quester et al. (2014), there are two types of consumer decisions including high involvement purchase and low involvement purchase. However, these two types have the same consumer decision process. There are five main steps in the consumer decision process including problem recognition; information search; alternative evaluation; purchase; and post-purchase activities. Actually, it is observed that motives significantly influence the first stage of consumer decision process. The problem recognition is defined the result of discrepancy between a desired state and an actual state that is adequate to stimulate and activate the decision process (Quester et al., 2014). The process of problem recognition includes two states which are actual state and desired state. While actual state is the way that the consumer perceives themselves to be at current time, desired state is the way that the consumer would like to be at current time (Quester et al., 2014). According to Punji and Brookes (2001), motivation has a great effect on the desired state of problem recognition. For instance, Maslow stated as a person becomes increasingly thirsty, the desired state emphasizes on being “not thirsty”. According to Maslow’s theories, the thirst of customer is considered as physiological motive. Thus, they will desire to buy water to satisfy 5 their thirst. Once their thirst has been satisfied, there are higher-order motives that would come to dominate the desired state such as safety, belongingness, esteem, and self-actualization motives. In general, all motives have specific influences on the problem recognition stage of consumer decision process. 3.3 Application: In fact, Nike always aims to discover individual influences on its customer behaviors for increasing innovation strategy, as well as marketing strategy (Nike annual report, 2014). In term of motivation researches, there are main techniques for organizations to discover purchase motives such as projective techniques and netnography (Quester et al., 2014). Actually, Nike has conducted projective techniques to measure feelings, attitudes and motivations that its consumers would be unable or unwilling to reveal (Arames et al., 2012). According to Nike report, through motivation research, it is identified that Nike’s consumers have two types of motives including manifest motives and latent motives. Firstly, manifest motives are defined as motives that are known and freely admitted (Quester et al., 2014). In contrast, latent motives are unknown to the consumers or are reluctant to be admitted by the consumers (Quester et al., 2014). In term of manifest motives, it is stated that there are several reason why people wear Nike shoes. For instance, they viewed Nike’s shoes as a high-quality and well-made product. Moreover, it is made by a reputable and trustworthy brand. Additionally, customers can experience superior customer service and after-sales service. In term of latent motives, customers consider that Nike brand symbolizes wealth and success. Therefore, they will feel important and respected when they wear Nike’ products. Furthermore, Nike is a preferred brand with celebrities, so it will make customers feel special and important. In general, all these motives influence the purchase of a pair of Nike shoes. Moreover, those motives also influence the process of problem recognition. Through Nike’s motivation research, it can be indicated that motives of Nike’s customers are related to the theories of Maslow’s hierarchy of motives. Especially, those motives lie on belongingness and esteem levels. At the belongingness level, consumers might recognize that they desire for affiliation or group acceptance such as peers, friends or colleagues. Since their friends or colleagues own Nike’ shoes, so they are motivated to purchase a pair of Nike’s shoes. Similarly, 6 at the esteem level, as Nike is a preferred brand with celebrities, so wearing Nike’s shoes would make the consumers feel superior, self-respect and prestigious. Therefore, they are motivated to own Nike’s shoes. As can be seen, motivation significantly influences the first stage of consumer decision process, problem recognition. 3.4 Recommendation: Once the marketers have understood the combination of motives that are influencing the consumer decision process, the next step is to design marketing strategy based on the influences of motives (Quester et al., 2014). Depending on the result of motivation research, Nike can define the target market for its products. Typically, the firm can target consumers who have manifest motives or latent motives including belongingness, esteem or self-actualization. After deciding the target market, Nike’s marketers should increase marketing communications which can directly appeal to consumers who have manifest or latent motives. Leary (2007) emphasized that direct appeals are generally effective for manifest motives because consumers are aware of and are willing to discuss their motives. Moreover, Leary (2007) mentioned that appeals to latent motives are more difficult to implement as consumers are unwilling to reveal them. However, Quester et al. (2014) proposed that on occasion, direct appeals can be used for latent motives. Therefore, Nike should design their marketing communications, especially advertisements that can directly appeals to not only manifest motives, but also latent motives. For example, Nike can run advertising campaign with an underlying message showing that Nike shoes can increase confidence. With this message, it can be seen that the advertisement direct appeal to the manifest motive to own and wear Nike high performance shoes, which offer natural movement and durability. Moreover, the message can also directly appeal to more latent motives such as prestige, self-respect and superiority. In general, it is suggested that advertisements of Nike should be designed to effectively target customers with manifest and latent motives for purchasing Nike products. Because there are many motives and many different situations in which these motives are activated, so there are frequent conflict between motives (Quester et al., 2014). Thus, it is required that Nike should develop its marketing strategy based on motivation conflict. Blackwell (2007) defined motivational conflict as the outcome of different motives which drive consumers 7 to opposite behaviors. In general, motivational conflict often influences consumption patterns. Thus, Nike should carefully analyze situation that are likely to result in a motivational conflict to provide a solution to that motivational conflict. For instance, a consumer might be motivated to buy Nike’s product on the internet but concerned about the quality of the product. To diminish this concern, the marketer could provide a money-back guarantee to encourage the consumer to purchase the product. It would reduce the consumer’s perceived risk if the product’s quality is not satisfactory. IV. Personality: 4.1 Theories of personality: Personality refers to the personal qualities that demonstrate how a specific individual typically responds to the world around them (Quester et al., 2014). Qiu et al. (2012) indicated that a person can easily describe their own personality, as well as the personality of a friend. Moreover, the study of personality is concerned with accounting for the consistent patterns of behavior. Therefore, Lin (2010) concluded that the personality of an individual can reflect the ways a consumer might respond to marketing strategies. There is a range of personality theories, and they can be categorized as three major theories including psychoanalytic theory; sociopsychological theory; and trait-factor theory (Blackwell et al., 2007). If the marketers can understand these theories to personality, they will have an appreciation of the potential uses of personality in marketing decisions (Quester et al., 2014). Moreover, understanding the influences of personality on consumer behavior helps marketing communication become successful as the consumers often expect that the marketer understands them and respects their personality (Blackwell et al., 2007). Firstly, Blackwell et al. (2007) stated that psychoanalytic theory identifies the human personality system includes the ego and superego. Secondly, socio-psychological theory recognizes the interdependence of the individual and society (Blackwell et al., 2007). Finally, trait-factor theory identifies that an individual’s personality comprise pre-dispositional attributes called traits (Blackwell et al., 2007). To be more specific, Blackwell et al. (2007) described that a trait is any distinguishable; relatively enduring way that one person differs from another. In addition, Quester et al. (2014) emphasized that personality traits is the greatest factor that 8 influence the consumer purchase decision process. Therefore, marketers should understand clearly theories of trait-factor to improve the marketing strategies for attracting consumers. 4.2 Influences of personality on consumer decision process: As mentioned before, each individual has a variety of personality traits and becomes involved in many situation that active different aspects of personality. Moreover, it is stated that personality traits influence the way that people purchase products, especially the process of making purchase decision. Actually, it is identified that personality has a great effect on the process of information search of consumer decision process (Quester et al., 2014). Firstly, information search refers to the process of seeking for information related to the products when the consumers recognize their problem (Pride et al., 2012). Information search includes two approaches which are internal search and external search. In term of internal search, consumer uses information from their memory. In contrast, Pride et al. (2012) descried that external search focuses on using information from the internet, reviews by other consumers, information provided in brochures, articles, and books, or information provided by advertisements. It is observed that the personality traits of customer influence the decision of using which approaches for information search. Particularly, consumer who self-doubt and worried would increase information search before purchase, especially carry out a particular level of external information search (Aiken et al., 2000). For instance, these consumers would search information related to the product by recommendation of a friend whose opinion is respected, reviews of experts, as well as feedback of other customers. In contrast, consumers who anticipate positive personal are likely to feel more confident in their information search activities. In addition to the influences of personality traits on information search process, there is another concept called brand personality that significantly influence consumer purchase process. Particularly, brand personality is the personality of consumers interprets from a specific brand (Quester et al., 2014). Shiffman (2001) mentioned that brands can be characterized in a variety of ways including old-fashioned, modern, fun, provocative, masculine or glamorous. For instance, one brand of clothes might project youth, sensuality and adventure, whereas another brand might be viewed as modest, conservative and aristocratic. Aiken et al. (2000) argued that each brand 9 has a distinct personality and is likely to be purchased by a different type of consumer for different situation. Furthermore, customers tend to purchase products with personalities that most closely match their own (Quester et al., 2000). Therefore, it can be seen that brand personality considerably affect the consumer behavior, and marketers should carefully consider the influence of brand personality in their marketing strategies. 4.3 Application: In addition to conduct motivation research, Nike also implements personality research to understand their customer behaviors in purchasing products (Americus et al., 2012). Actually, the research found out that there are three core traits of personality of Nike’s customers such as extroversion traits, openness traits, and conscientiousness traits. Firstly, Costa and McCrae (1980) described that extroverts are sociable, active, talkative, energetic, optimistic, and shy. It is identified that customers who are extrovert people will be more purposeful in information need and their searching always to be high. To be more specific, Heinsrom (2003) emphasize that they are high information seekers and actively using, sharing and exchanging information to the maximum. Moreover, they also do their information search in more diverse and wider way, and use most of the resources including formal and informal for seeking information (Heinstrom, 2003). Through analyzing extraversion traits, Nike can recognize that these traits partly influence the information search process of consumer decision process. Especially, customers who are extrovert people are more likely to focus on external sources such as Nike’s website, blogs from experts, and reviews of other customers on forums to seek information related to Nike’s products. Secondly, consumers who have openness trait are active, imaginative, sensitive, and independent in their judgment (Blackwell et al., 2007). Moreover, Quester et al. (2014) stated that openness illustates broad information seeking incidental information acquisition, critical information judgment. There are recent studies indicated that consumers who have openness traits will have an active motivation for search, use diverse approaches for seeking information, as well as use the maximum range of external sources. It can be seen that in similar with consumers who have extrovert trait, individuals with openness trait also tend to emphasize on external sources to search for product’s information. Finally, Heinstorm (2003) described that conscientious individuals are competent, orderly, disciplined, and reliable. They highly focus on 10 seeking information in individual (Heinstorm, 2003). Thus, Nike can identify that customers who have conscientiousness trait tend to use internal search including memories of past searches or personal experience to seek information related to Nike’s products. 4.4 Recommendation: In recent years, there has been an increase in using social networking sites for marketing purposes (Quester et al., 2014). Moreover, Blackwell et al. (2007) observed that the personality traits also influence individual’s use of social media. Particularly, Quester et al. (2014) recognized that individuals who have extroversion trait have been associated with Facebook users. Actually, Rekom (2006) stated that insight into a customer’s personality through their use of social networking may give insight into how to attract customer’s attention by matching personality traits to marketing communication. Therefore, it is suggested that Nike should carefully consider using social media for supporting marketing purposes. For example, Nike can create fan pages on Twitter or Facebook where individuals can discuss, seek information about and exchange opinions on Nike’s products. Through social network, customers not only can seek information related to the products, but also can be informed information about Nike’s promotion strategies. As a result, it can motivate the customers to purchase Nike’s products. In addition, it is proposed that brand personality is an effective application for marketing strategy (Quester et al., 2014). As analyzed above, brand personality influences purchase behavior of consumers. Thus, consumers tend to assign personalities to brands based on factors including the characteristic of the product category, the brand’s features, its packaging and its advertising. Moreover, Thomson et al. (2005) stated it is required that Nike’ marketers need to manage the personalities of their brand for facilitating marketing communications. Especially, Nike’s marketers can use celebrities such as athletes to endorse their brand, in order to develop a brand personality associated with that celebrity’s image. For example, Nike’s marketers brand can continue to express the personalities of athletes including confident, durable or patient. As a result, it would appeal to young generation, especially teenagers or young adults who desire an image like these athletes. Generally, because consumers tend to prefer products with personalities that are pleasing to them, so it is important that Nike’s marketers should design advertising messages that portray consumer’s personality. 11 VI. Conclusion: In conclusion, it can be concluded that the study of consumer behavior is a critical concept for Nike to be successful in its business. For having an effective and efficient marketing strategy, marketers of Nike should carefully analyze individual influences on consumer purchase decision process. There two internal factors that significantly influence the process of making purchase decision such as motivation and personality. Firstly, consumer motivations are the energizing forces that activate behavior and provide purposes, direction and drive to that behavior. There are five levels of motivations such as physiological, safety, belongingness, esteem and self-actualization. Moreover, it is identified that motivations affect the problem recognition step of consumer decision process. Therefore, it is necessary to understand specific motives that influence consumer behavior to design marketing strategy, especially marketing communication approaches for Nike’s products. Secondly, the personality of a consumer guides and directs the behavior chosen for accomplishing objectives in different situation by their responses. Every consumer can find some are of their personality that can influence their making purchase decision. It is recognize that personality traits have great effect on the stage of searching for information of the products. Moreover, there is another concept called brand personality which also influences the purchase of consumers. Thus, marketers of Nike are expected to have a clear understanding of the influences of personality traits, as well as brand personality to enhance the marketing strategies for Nike’s products. Basing on the influences of individual factors, marketers can design marketing straggles more effectively and efficiently. 12 References: Aiken, K.D., Koch, E.C., & Madrigal, R. (2000). What’s in a name? Explorations in geographic equity and geographic personality. AMA Winter Education Conference Proceedings, 11, 301-308. Americus, R., Forehand, M. R., Puntoni, S., & Warlop, L. (2012). Identity-based consumer behavior. Intern Journal of Research in Marketing. 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