BACHELOR IN BUSINESS ADMINISTRATION

SEMESTER 3

E-COMMERCE.

ASSIGNMENT 1

Prepared for:

Lecturer’s name: Mr. Saboor

Prepared by:

Student’s Name: Anyanwu Christian Chibuike – ID No: Alfa2018-0497

 INTRODUCTION

In present, the most challenging concept for marketers are to identify what consumers buys and
don’t buy and why and when they buy specific product or service. This consumer purchasing
decision related information is difficult but critical for marketers as it helps them in identifying
what is significant to the consumer and what influences him/her most at the time of taking their
purchase decisions. The information about consumer behavior and their purchasing decision
influences marketers in creating their marketing programs or strategies in accordance to the need
of specific consumers. In this concern, the most substantial help for marketers can be done by
going through the process of consumer behavior and identifying specific internal and external
influences on consumers. The process of consumer behavior is a conceptual model and it does
not entail enough information that assist in predicting specific behaviors of consumers. However,
the consumer behavior process manifests general beliefs of consumers that can be very helpful
for marketers to design their products and services according to identified beliefs (Predicting
who buys what, how and where).
 QUESTION 1

INFLUENCE OF INTERNAL AND EXTERNAL FACTORS ON CONSUMER’S

DECISION MAKING PROCESS OF A PRODUCT (COFFEE)

CONSUMER DECISION MAKING PROCESS: Consumer decision making process

involves the consumers to identify their needs, gather information, evaluate alternatives and then
make their buying decision. The consumer behavior may be determined by economic and
psychological factors and are influenced by environmental factors like social and cultural values.

The consumer decision making behavior is a complex procedure and involves everything starting
from problem recognition to post-purchase activities. Every consumer has different needs in their
daily lives and these are those needs which make than to make different decisions. Decisions can
be complex, comparing, evaluating, selecting as well as purchasing from a variety of products
depending upon the opinion of a consumer over a particular product. This renders understanding
and realizing the basic problem of the consumer decision making process for marketers to make
their products and services different from others in the marketplace.

5 STAGES OF CONSUMER DECISION MAKING PROCESS

1. Need Recognition: Need recognition occurs when a consumer exactly determines their
needs. Consumers may feel like they are missing out something and needs to address this
issue so as to fill in the gap. When businesses are able to determine when their target
market starts developing these needs or wants, they can avail the ideal opportunity to
advertise their brands.

2. Information Search: The information search stage in the buyer decision process tends to
change continually as consumers require obtaining more and more information about
products which can satisfy their needs. Information can also be obtained through
recommendations from people having previous experiences with products.

3. Evaluation of Alternatives: This step involves evaluating different alternatives that are
available in the market along with the product lifecycle. Once it has been determined by
the customer what can satisfy their need, they will start seeking out the best option
available. This evaluation can be based upon different factors like quality, price or any
other factor which are important for customers.

4. Purchase Decision: When all the above stages have been passed, the customer has now
finally decided to make a purchasing decision. At this stage, the consumer has evaluated
all facts and has arrived at a logical conclusion which is either based upon the influence
 from marketing campaigns or upon emotional connections or personal experiences or a
combination of both.

5. Post Purchase Behavior: The purchase of the product is followed by post-purchase

evaluation which refers to analyzing as to whether the product was useful for the
consumer or not. If the product has matched the expectations of the customer, they will
serve as a brand ambassador who can influence other potential consumers which will
increase the customer base of that particular brand. The same is true for negative
experiences; however, it can halt the journey of potential customers towards the product.

WHY ARE PEOPLE WILLING TO PAY MORE FOR COFFEE

People who willing to spend for quality services, good environment, Wi-Fi area and located
convenience places because they are coffee drinkers, that’s why people will choose to spend
their money in the expensive places rather than cheaper ones. In another way, people are
influenced by their buying behavior from their friends and family, in loyalty which is to test-
marketing ideas to keep the customers fully constant to the brand and the environment which is
in the changing life style.

Other than that, they are also influenced by culture, sub-culture, places, races, past experience
and reference groups. These types of thinking, feelings and actions will influence the changing
attitude from the consumer. Customer past experience will affect millions of people around the
world to patronize the coffee bean outlet.

THE IMPORTANCE OF FINDING OUT CONSUMERS BEHAVIOR

Consumer behavior is what consumer wants and needs. They may be perceived in quality differs
from management-based of product quality and objective. When consumer is buying on the
quality and a nice product, there will be based on believe signal, consumer will focus on finding
the lowest price product and buying on promotion. In another way, consumer will focus on
aspects of the product that satisfy a consumer’s needs and wants. Consumer behavior is
influenced by these factors, for examples: motivation, perception and learning. Those factors are
known as internal factors or personal factors. In addition, factors like norms, family and cultural
in external or internal.

Consumer is most important person for the marketer because the marketer takes in to
consideration on the taste and dislikeness of the consumer as well as produces the goods and
services accordingly. In addition, marketers willingly to fulfill the customer wants and needs,
then only will design out the optimal product or service for the customers, after all the survey,
marketer will only decide what price customer will purchasing on their product or service,
marketer will use different kind of marketing strategies to do their promotion to get the customer
to buy a product or service. This will help the marketers to launch their new product and
changing the decision making of the consumers. Marketers will improve the performance of the
company and achieve their goals.

INFLUENCE OF INTERNAL AND EXTERNAL FACTORS

EXTERNAL FACTORS: Internal factors are representing the consumer’s ability the benefit
straight from the product. Consumer motivation to purchase any product is an internal factor, and
it may rely on a person’s desire to achieve their satisfaction. Perception really determines a
consumer’s behavior, allowing them to justify their actions or another based on the perceived
outcomes. A marketer of perception is to motivate a consumer, simply by showing the young and
attractive people who are very cheerful and successful and who are using their product. Some of
the internal factors include;

a. CULTURE: A consumer is sometimes influenced by another society. Every society also

is different from another and direct by set of different consumer wants perception,
behavior and values. This will be depend on culture, subculture, and social class.
b. SOCIAL: In the social factor, consumers are influenced by the people who are around
them such as family, roles, neighbors, friends and consumers will try to follow them.
c. PERSONAL: Personal factors for instance age, life style and occupation of the
consumers, product life cycle can also influence the consumer’s mind. People with
different occupation sometimes have different choice of products or services.
d. ECONOMIC: Economic factor is a buying potential for consumer that doesn't have
enough money for purchase of product. This factor will influence when buying the
products by bargaining to lower prizes, otherwise the consumer will start looking for
alternative choices.
e. PSYCHOLOGICAL: Psychological factor influences every consumer based on
perceptions, attitude and beliefs. Marketers must understand those psychological factors
and motivate the consumers to buy their product.

INTERNAL FACTORS: Internal factors are also known as personal influences and it includes
perceptions, attitude, motivation, lifestyle, learning and roles. These internal influences affect all
our purchase decisions.
a. Decisions: Internal influences basically come from consumers own lifestyle and way of
thinking. These are consumers’ personal thoughts, self-concepts, feelings, attitudes,
lifestyles, motivation and memory.
b. Personal Needs & Motives: The most substantial internal influence that affects
consumers purchase decision is his personal needs and motives. The need of a consumer
can be defined as a lack of something or the difference between his desired and actual
state.
c. Attitudes: The next substantial internal influence that affects consumers buying behavior
is their own attitude. Attitude pertains to what an individual feels or thinks about
something. It is always reflected in individuals’ acts as well as in their buying patterns.

QUESTION 2

COMMON CHALLENGES RETAILERS FACE GIVING CUSTOMERS WHAT

THEY WANT

The retail industry is in a state of constant transformation and there is an increasing urgency
to reduce costs and to increase efficiency in operations. As customers become more
demanding, there is also extra pressure to exceed their expectations with regards to the
quality of the product, service and overall experience. Below are 5 common challenges
retailers face today;

1. Need for customization: Customers can prove very demanding and they are increasingly
looking for unique experiences that allow them to build and customize their own
products. Retail managers must rethink the role of their stores and develop smarter, more
personalized offers. With the growing popularity of online retail stores such as
LAZADA, overcoming this challenge is central to creating retail experiences that still
draw in customers.

2. Retail price inflation: With consumers having to pay more and more for their daily
essentials, many have less disposable income and are now more likely to cut down on
their budget for luxury products likes clothes. For this reason, it is now up to retailers to
give consumers a valid reason to shop and to prove that what they will have represents
excellent value for money. Equally, retailers are struggling to deal with higher costs
which are likely to rise further.

3. Communication: Operating a retail business is undoubtedly a hard job, and managing

internal communication is no exception. The complexity of this process will depend on
the size of the business, how many stores there is, the number of workers. However, there
 are four other less obvious challenges that should always be considered, but are
sometimes left forgotten.
 Scalability – Increasing the scale of something equates to more complex teams
and communication flows. There is a need to optimize interaction between staff
and the managers.
 Tracking – It is essential to track communications to guarantee the compliance
and excellence of every retail process. This includes conducting reviews,
approvals, production, design, logistics, among others,
 Automation – Automated signs are important to ensure team members are held
accountable for their actions, to help them to organize their tasks and to help them
to solve problems rather than just creating stopgaps.
 Reporting – It is crucial to measure results and to check that the teams are hitting
their targets. This is especially an important task for operation managers, as it
allows them to make better-informed decisions, based on a review of current and
upcoming communications.

4. Sustainability: The younger generations are becoming increasingly demanding of having

a degree of transparency with regards to the ethical practices of the products they are
purchasing. This ‘conscious consumer’ is changing the retail industry as brands must be
more socially, environmentally and politically conscious which has a huge impact on the
daily running of operations.

5. Digital disruption: Technology and the scope of its uses are growing exponentially. It
means that retailers need to merge online and offline businesses, from back-office
operations to the final delivery to the consumer in-store. Data collection is also evolving
rapidly and helping us all to make decisions in sales, marketing, customer service, and
operations. For example, with access to real-time data, it is possible to replenish a store,
define optimized labor schedules, and manage KPIs to achieve positive financial results.
Retailers should use data to set actionable targets and solve issues.
 CONCLUSION

In conclusion, I learned that consumer will be influenced by the people who is around and the
importance of the consumer. People who are willing to spend for services, quality products and
good environment. They are also influenced by culture, sub-culture, places and races, past
experiences and reference groups. Besides that, consumer decision making can be influenced by
factors such as motivation, learning and perception. Consumer is most important person for the
marketer because the marketer takes into consideration on the taste of the consumer, as well as
producing quality goods and services accordingly.