Consumer buying behavior is study based on consumer purchase decision making process and act of consumers involved in buying and using products. (businessdictionary.com, 2010). Understand the needs of consumers and their purchase behaviors are important when a marketer comes to success delivering products to the market. (Sheth, 1973) However, the most challenging thing about that every consumer is unique and has his own reason for purchasing a particular product in satisfaction of his needs and wants. Consumer buying behavior also trends to move with change continually in influential factors. As marketers, they must know what factors influence consumer purchase.
The earliest literature review on consumer buying behavior is the book of Golden Rules of Business Success by Tao Zhu Gong (Fan Li, 439BC), which record about the importance of understanding the current and forecasting the future consumer purchasing trends, and then educating consumers, thereby influence their purchasing decision (Kotler et al, 1994).
There is a wonderful example of how does Apple through evaluate consumer behavior to obtain an effective online marketing. Apple assume about consumer behavior are reflected in their online shopping. In consideration of an assumption for consumers’ time presses and technical savvy, Apple focus on their products and technology, and design with a tag relating to their core products like iPod, iPhone, Mac and iTunes in website. The design aim at facilitate information intensive and more convenient to consumers online shopping based on Apple behavioral assumption for consumers. This is a minimalist method that Apple assumes their target consumers are suspicious of hard sell, so Apple tries marketing toward “soft sell” approach.
2.2 Six Stages Consumer Purchasing Process
A consumer gets through six stages in any purchase (Vashisht, 2005) (see Figure 1). According to this model, a consumer must first be recognizing a problem based on his needs. This perceiving could be external stimulated by marketing communication, physical cues or seeing the product in use (Neal, 2006).
When the consumers are aware of they need, and then meaning the identification of product consumer needs, this stage depends on how important the product is to consumer by socially, economically and psychologically (Adcock, 2001).
Once the consumers have recognized a problem, they enter the information search stage on products that look for solutions to their problems. Consumers could undertake both an internal search (memory), and an external search from commercial or public sources (Belch, 2007). Consumers will also tryout the product if possible. The consumers will have a rank or shortlist from which they will buy the products by then.
After the information search, the shortlisted products will be compared and evaluated by product attributes, subjective factors or personal criteria (Gilligan, 2007). By the end of alternatives evaluation stage, the consumers would have decided on an ideal product to buy.
When the alternatives have been evaluated, the consumers will decide to purchase product includes from whom to buy, where and when to buy, even whether to buy (Vashisht, 2005). Khosla, Swati (2002) notice that marketer must facilitate the action of consumers on purchase intention.
In the final stage of post-purchase evaluation, the consumer compares it with his expectations and ranks his purchase levels of satisfaction. The evaluation determines if the consumer will purchase this product again and tell others (Mullin, 2008).
With the newest MacBook in June, 2012, a case about the influence of Apple successful marketing on a typical consumer’s purchase decision making process based on six stages mentioned above.
At first a consumer is going to recognizing need. This problem is recognized by the stimulus, like Apple’s secretive press conference. The result as may not be a truly essential item but still become his needs and he so desperately want it.
After recognizing his needs, consumer starts an information search stage. Depend on a high interest, he is going to search all pertinent information for the newest MacBook, because he want understand it better, it include opinions for others and reviews to weight his own options.
During this consumer to evaluate the alternatives, the result in the newest MacBook is very different from others and it is an innovative product. Now to his purchase decision, he is inclined to purchase the newest MacBook base his evaluations on a truly need level. Lastly, when he has gained the newest MacBook, he feels satisfaction on the post purchase.
2.3 Factors Influencing Consumer Behavior
Various analysts categorize the many factors influencing consumer behavior in different classification. Relevant ways are internal and external factors by Koudelka (1996) and categorization in to sociocultural and psychological factors by Hitesh Bhasin (2010). Mowen and Minor (2009) identifies five factors, which they categorizes in to Personal, Social, Cultural, Psychological and Situational factors effect on consumer purchasing decision (see Figure 2). This way is also endorsed by Kujnish Vashisht et al. (2005).
2.3.1 Personal Factors
Gilligan (2009) opinion that each of us is unique traits such as age, knowledge, profession, personality, lifestyle and financial situation will influence our consumer behavior. Kotler (2009) identifies that individual factors are highly linked to the human psychological factors.
According personal factors, Apple will segment market into a meaningful consumer groups, better serve toward target consumer groups, provide differentiated serve to target consumers and positioning themselves in the minds of consumers.
Another compelling example highlights how does Apple utilizes personal factors to implement their marketing successfully. Due to Gilligan’s opinion for everybody is unique, Apple allow consumer according to their own favor to download the different software in their devices so that assemble into a unique product for theirself, such as iTouch allow consumers to download their own favor games, music or moves by iTunes, thus everyone has a unique iTouch that should aim to maximize consumer satisfaction.
2.3.2 Cultural Factors
Bob Perry (2009) suggests that cultural factors has most important effect on consumer purchasing decision due to they are the major cause of a personal needs and behavior. Cultural factors include personal value, attitude, perception, etc. cultural factors dominated by personal social culture, geographical area, education level or religious belief and life experiences of shape the personal consciousness or behavior ways (Wilson, 2009). Berkman (1986) note that social status also plays a role will be reflected in the consumer purchasing habits by a combination of income, wealth, education, occupation and others.
For example, consumers used to measure their social status by their consumption level, higher consumption level represents the higher social status, Apple successful utilizes this variable to induce consumers purchase Apple product on an expensive side. Owning an Apple product has become a contemporary social sign. It means that you’re doing well enough financial conditions to piss away on a higher-priced consumption level.
2.3.3 Social Factors
Human beings live in a society and social factors are really important influence for individual buying behaviors. Family members, friends, relatives or colleagues often form reference groups who play an important role in influencing the purchasing decision of individuals (Hoyer & Haythornthwaite, 2002).
Hence, Apple did a smart application about networking, public forums discussion, and online reports share to indirect influencing the consumer emotion. Based on the modern socially-connected world, Apple marketing has benefited to public praise, word of mouth way, social proof or media hype by this variable (Macinnis, 2010).
2.3.4 Psychological Factors
Psychological factors include personal motivation, views, needs, attitudes or perception. Marshal (2007) believes that individually psychology is the biggest challenges will be managed.
“If a resource is scarce, people will put a lot of value to it”, Fernbach (2012) said, “consumers go nuts, and they want to buy it.” “The rarer a thing is, the more it is value” has been become the Apple’s marketing mantra is used to driven consumers’ psychology.
Fernbach also indicated two other psychological behavioral factors play a role in helping Apple draw their consumer behaviors to marketing are impatience and herd mentality. Apple thinks that when we see others doing something, we will automatically to following. When Apple release iPhone 5 in September 21st 2012, many consumers take the time to line up outside Meadows mall in order to first to get an iPhone 5 (Denver, 2012). Conformity psychological trend will add personal value, acknowledge and self-recognition (Herzberg, 1987).
2.3.5 Situational Factors
Foxall (1998) identified that situational factors accounted for a large proportion of consumer purchasing decision. The act of purchase is influenced by many factors: physical environment (mood, weather or lighting), social surrounds (store’s atmosphere) occasion (seasonal pressures) and even temporal perspectives (Stewart, 1987).
2.4 Types of Consumer Buying Behavior
Henry Assael (1987) divide buying behavior into four types (see Figure 3), depending upon the extent of involvement and degree of difference among products: complex buying behavior, dissonance reducing buying behavior, habitual buying behavior and variety seeking buying behavior.
2.4.1 Brief Four Types of Consumer Buying Behavior
Habitual buying behavior in results when the consumers choose between different substitute products with same features and functions, consumers will go for the one that they has been using before or familiar with it. Kotler (2009) is of the opinion that more due to brand loyalty than habit.
Variety seeking consumer buying behavior is a randomly buy, the result when the consumer has decided on a different product every time. Adcock (2001) holds that switch a new brand not due to dissatisfaction for old brand, it only satisfy they to try out the new one.
Dissonance reducing buying behavior as the third, consumers will be highly involved in this type of buying behavior due to the cost and risk of the purchase, but will recognize less or no product difference between the brands. They feeling distrust or disappoint (Wilson, 2009).
Complex buying behavior takes place when highly involved consumers who compare with full brands of the products in the market. This type of consumer will go through a relative lengthy stage of information search and evaluation based on their needs (Baker, 2003).
2.4.2 The Application for Apple Company
The analysis shows that four types of consumer buying behavior-based, Apple successful built their brand loyalists, this type consumers loyal to Apple brand goes beyond the product itself. For example, the loyalists who purchase Apple Mac because of them like and believe in the Apple brand. Apple positions their brand values in mind of consumers. Apple applies these values to design anything. If Apple were to sale a car as result in they should be also successful with their loyal consumers due to loyalists will believe that the same perceived across every Apple product they offer.
In this research, according to the concepts, influential factors, purchasing decision making process and types of consumer behavior, consumers’ gender, age, education level, and income level as the most important demographic variables will be involved in Apple marketing. Apple applies these individual demographic factors to create marketing mix in order to cater consumers’ satisfactions. These demographic factors play a major role in consumer purchasing decision making process. Hence, the hypothesis one was stated as follow:
H1: The significant differences exist in the relationship between demographic variables and consumers’ intentions to purchase Apple product.
2.5 Marketing & Marketing Mix
Adock (2007) using Neil Borden’s 4Ps (1953) (see Figure 4), identifies marketing is that a right product, in a right place, at the right time and at the right price. Around this conclusion, the market competition between the businesses has moved from product, price, place and promotion to a single “p”-people, and that people are the consumers.
Marketers are able to obtain more consumers that play a major role in deciding the winner in a diverse, complex and rapid changing situation (Uysal, 2005), because of they recognize that it look unlikely to produce one product that will satisfy all consumers in this competition. Instead, marketers must plan marketing mix to guide marketing. The marketing mix is the strategic framework to focus on developing best tactics and strategies to achieve marketplace success based on objectives of marketing. Marketing mix also as a strategic tool is that used in marketers to communicate their marketing objectives and control variables to their target market (Kolter, 2001). It includes 4 types of variables in marketing mix, also called the 4Ps: (1) product: supply of a tangible or intangible item to meet the needs of consumers, such as brand name, functions, design or packaging etc. (2) price: the amount of money a customer pay for the product, it may include pricing, discounts etc. (3) promotion: the methods of communication that companies to delivery information to consumers, the means like advertising , sales promotions etc. (4) place: a location where is consumer to purchase, the decision such as distribution channels or transportation (Clemons, 2006).
2.6 The Extended Marketing Mix
The Extended Marketing Mix of Booms and Bitner (1981) also called 7Ps (see Figure 5), as marketing tool that increase 3 variables based on 4 traditional Marketing Mix framework for seven. The 7Ps model is more useful for technological-intensive industries to attract and retain their consumers (Mauborgne, 2004).
The expanded the marketing mix by replenishing the following three additional P’s:
People refer to all individuals directly or indirectly involved in the consumption process. They include the workers, employees, management and consumers themselves. Process as methods, procedures of providing quality services and products and is an essential element of the marketing mix. Physical Evidence refers to both tangible and intangible ability and environment in which the services & products are delivered, such as buildings, stores, experience or customers satisfaction (David Pickton &Rosalind Masterson, 2009).
The benefits about applying the marketing mix are that help marketers to translate their competitive advantages to target consumers helps with goal achievement and promote customers satisfaction (Rice, 1993).
A criticism stated that traditional marketing mix is too simply due to consumers environment has become more complex now (Chiliya, 2009), so, in order to extend the usefulness of it, I will try to best research the influences of the extended marketing mix on Apple by a successful 7P’s strategy. Under this criticism, the hypothesis two was stated as follow:
H2: The significant differences exist in the relationship between demographic variables and consumer’s responses for the Apple marketing mix.
2.7 The Application of Marketing Mix for Apple Company
If use one word to summarize Apple marketing mix, it should have to be a “differentiation.” Apple makes huge efforts to differentiate their anything from their competitors. There are several typical examples to respectively reveal how the marketing mix of Apple can differentiate others in success.
Almost everyone knows that Apple products are distinct, unique and different from their competitors. All products of Apple succeeded in its innovation for superior design and high-tech functions stand out from their competitors (Diana Samuels, 2010). Apple has been a unified design philosophy is based on their brand cultural for total products. They using similar word named their products: iPad, iTouch, iPhone, iAnyting to create and foster brand identity to consumers (Nick, 2010).
In addition, Apple’s core competitive advantage is control over experience of users by a user-friendly user interfaces and a “digital hub” strategy with iTunes and App store, etc. Apple has successful integrated hardware and software services from a single supplier to monopoly operations (Arthur, 2011).
The long awaited of iPhone5 has just launched and a lot of new design for a smaller dock connector, taller 4-inch screen, 20% lighter than the older version and 18% thinner. The appearance design will deal for users to holding with just one hand. Camera, battery life also has improved and the functional features will support LTE (The Guardian, 2012). And the graphics and processor are twice as faster than iPhone4S by “A6 chip”. The iPhone5 is identified as a most high-end product in current smartphone market.
Premium price is well known as price strategy in Apple, the biggest reason for the success of Apple premium price is that Apple provides a distinct products & services and it different from its competitors, so prices will automatically rise and higher than others depend on the distinct technologies provided by each product (Cohen, 2011).
The other tactics is skimming price has a great result of sales for Apple. Each time the Apple launch a new product, they will charge a higher price with a “hunger sale” that they confirm consumers will pay (Benjamin, 2012). And later introduces lower price version with fewer functions (for example, iPod) or a newer version with a higher price (for instance, for the pricing of iPhone 5 is same as previous versions and the older versions will drop pricing) (Jemima, 2012). As the early purchasers are satisfied, and then following the demand curve, the price will be lowered.
Apple Store has already successful out there around the world in different places, and will continues expanding in key locations around the world to improve their capabilities of distribution. Not only Apple Store provides to consumers a comfortable atmosphere of shopping, but also delivers a high touch shopping experience and education mode (Wolf, 2011). The place tactics of Apple Store is attention to detail layout, services like the larger Genius Bar and comfortable product-display tables. Consumers can stay in Apple Store anytime they want playing with the any products with website and nobody will boot out them to leave (Brownlee, 2012).
Apple is very active in its promotional tactics for create “hype” towards public. The main method is advertising, it can be found on anytime, anywhere and any way (Sean, 2010). This effort has successful in creating excitement and curiosity before the induction of new products every time. Today, the logo of Apple has become one of the most recognizable signs (McManus, 2012).
However it’s worth mentioning, the point of never changed is that Apple Inc. always keep a distinct and consistent style on its advertising (Gilmour, 2011), such as the commercials of company is focused on “innovation” and the iPod focused on the “coolness”.
The personal selling is one of promotional tool for Apple Inc. (Duckett, 2009) Apple Stores always employ many young and knowledgeable sales representatives to serve their consumers better.
Additionally, Apple knows that the word-of-mouth is usually as a more usefully and effective reference for consumers purchase their product (Martin, 2008).
The continued effect of Steve Jobs’ celebrity charm brings a large number of “Apple fans” (Dent, 2011). New Chief Executive Officer of Apple is Timothy D. Tim Cook and today, Apple Inc. owns a various members who are working together with mutual different technology and knowledge area in order to create more effective products and services.
2.7.6 Physical Evidence
Distinct design style and comfortable shopping atmosphere environment is major reason of the physical evidence strategy succeeded in revolute the traditional displays (Rachel Lamb, 2012). All experience touch point strong the Apple brand. Moreover, the Apple logo has evolved to an Apple with a bite taken out now.
Apple Company seeks to attract new consumers and retain their loyalty through focus on customer service (Peter, 2009). The service consultants are 24/7 available for the best service to their all users in order to help them optimize solution at the first moment. One to One service will help consumers do more than when they after purchase a new Mac (Grace, 2011). Apple has expanded their delivery channels in recent years such as the MacWorld Expo.
Although the marketing mix of Apple has been very successful, but it still lead to the difference exist in consumer behaviors. Under this line, the hypothesis three was identified as follow:
H3: The positive relationship exists between the consumer buying intentions for Apple product and their perceptions for Apple marketing mix.
2.8 Relevant Theories and Models
The objectively explanation theories & models to complex consumer buying behavior actions tool a major part in this subject, which based on economics, environics, sociology, ethnic and cultural studies, political science, philosophy, marketing science, psychology, behaviorism and anthropology (Schiffman, 1993). These also bring the wealth of valuable literature available on this subject.
2.8.1 Marshallian Theory
According to the economic doctrine by Smith and Jeremy Bentham (1879), Marshall propounds the Marshallian model that assumes individual buyer will spend his income on a rational commodity and conscious economic calculation. This theory attempt to driven the buyer’s equilibrium for their psychological needs of commodity and individual financial situation with supply price (Runyon, 1987).
Let’s go back to 2001, one of the more prominent example is when iPod introduced by Apple, there were already many other MP3 players on the market, iPod were not the first, it were a new technological product that were unfamiliar to people, and iPod were also on an expensive price. Under the background of global economic crisis, Apple was realizing that likely to be missed out on a potential sales opportunities due to the middle and lower classes whose income levels are so low, and Motherbaugh (2008) indicates that the middle and lower classes make up 75% of global structure for the time. According to this reason, Apple changed the product and price of iPod in order to accommodate to meet a social-demographic structure differentiation. Apple introduced the different memory capacity of iPod such as 8G, 16G etc. and different models like a smaller iPod shuffle. Apple did a clever move by create the new marketing mix to cater the different purchasing power based on different social demographic structures.
Applying this principle of theory, Apple has successful seized the potential consumers ‘psychology, create products differentiation to handle a consumer’s needs and strong urge to purchase on a premium price.
The main criticism of this theory is that consumers are get affected by other variables such as marketing and social factors observably. Consumers are unlikely to be due solely to the prices of Apple products to decide their purchase intentions. Hence, the theory is ignores all the other aspects, is too simple and inadequate (Arena, 2003).
A second view is that the consumers are not likely to fully aware of the market, Kotler (1979) believe that this theory is unrealistic.
2.8.2 Maslow’s Hierarchy of Needs Theory
Maslow is a well-known hierarchy of psychological needs theory (Abraham Maslow, 1943). Maslow categorizes five basic levels of human needs in lower level needs to higher level needs (see Figure 6), range from biogenic need to psychogenic need (Kabuk, 1997). Loudon (1993) support this model is that better understands the consumers’ motivation and used to market segments.
Wahba & Brudwell (1976) has argued that found little evidence to rank the hierarchy of needs in their extensive research. Manfred Max Neef (1990) has also argued the result for the hierarchical human needs have not included all, such as freedom. Maslow’s model has also been criticized as difficult to categorize because of the ever-changing needs along with a changing environment (Della Bitta, 1993).
Despite the much criticism on this model, the marketers of Apple think that it is useful in marketing mix strategy as result in it can provides an understanding for consumers’ perceptions and motivations. For instance, there is main motivation for consumers to purchase an iTouch are to listen to music, play games, or see the moves and as a higher status symbol. These are the primary drives of their motivations to purchase iTouch. The drive of motivations is a pressure that is come from the consumers by their social groups and intentions are the final satisfaction of the buying cycle.
The motivate level can be measured through the iTouch if satisfy the consumers’ expected for quality. According to the Maslow Theory of Need Hierarchy, the consumers purchase the iTouch in order to satisfy their wants and needs due to the iTouch as a luxury product that makes the consumers feel pleasure and satisfy the highest hedonistic needs within total hierarchy.
Additionally, Apple use this hierarchy as a comprehensive framework to guide their create advertising through appeals for the need level towards target consumers, focus on their distinct products features and service experience.
2.8.3 Pavlovian Model
O’Shaughnessy (1992) describes that the learning of Pavlovian model is also called classical conditioning (see Figure 7). Pavlov (1890) explains that the relationship with drive, cue and response results in habits. This model contributes to provide insights to research concerning consumer behavior and marketing.
Apple marketing is like the dag of Pavlov, the reason is that once the bell of Pavlov rings, numerous consumers are queuing outside the Apple retail store to purchase Apple product around the world, a huge proportion of consumers are almost become habit. For instance, when the iPad 2 was introduced in last year, nobody mind or even aware of its camera was less than 0.92 megapixels, but the Motorola Xoom’s was 5 megapixels and clearer.
The weakness of Pavlovian Model is inability to adequately explain the interpersonal influences, perception etc. to be important result (Gatersleben, 1998). For example consumers may not be able to purchase the Apple product under their financial situations.
However, this model contributes to Apple by offers industry insights, in term of guidance for advertising strategy to target consumers. Apple active in a hype way and repetitive slogan has frequent appear in anywhere and anytime to arouse consciousness of consumers and strong brand identify.
2.8.4 Howard Sheth Buyer Behavior Model
Howard Sheth Model was considered as an advanced theory of consumer behavior by most scholars (see Figure 8). The major advantage of the model presents with a large number of variables has been linked in the consumer purchase decision based on behavioristics (Bridgewell, 1987).
This model help Apple to identify that their target consumers’ individual characteristics, consumer purchasing decision making process, interaction of their marketing mix stimuli, and consumer responses on Apple products under the macro environment stimuli depend on internal personal stimuli and external force stimuli. Apple applies it as guidance of marketing mix that better understanding for a relationship between the stimuli and the response of the consumers by behaviorism.
However, in reality many decisions are not made in awareness of a determined problem by the consumer.
However, the limitation of study is that the model too comprehensive involvement of almost all variables and many consumers’ decisions are not awareness, it’ll difficult to measurement and cannot be realistically tested (Francesco, 1976).
2.8.5 Porter’s Generic Strategies
Michael E. Porter (1995) developed a model of generic strategies to how a company to sustain the competitive advantage and better position in a market (see Figure 9). Porter suggests three generic strategies of achieve a market leadership position, which are cost leadership strategy, differentiation strategy and focus strategies based on target market.
Cost leadership is where the company must offer lowest costs than its rivals (Thompson, 2007). Cost leadership can be achieved by cost-saving, minimizing waste, standardized product and large scale production (Martin 2006). Differentiation strategy makes use of unique product, special brand, innovative services and superior value to capture the market (Stahl, 1997). Focus strategies concentrates on a limited range of market segments. Focus strategy can gain both cost leadership and differentiation (Stopford, 1992).
Critics have always questioned the use of generic strategies, its lack specificity, lack flexibility, and are limiting nature (W.Chan Kim, 2009). Two objectives of cost leadership and differentiation will likely conflict mutually (Baden-Fuller, 1994).
Based on Porter’s model, Apple is pursuing a broad differentiation strategy to marketing by providing a wide range of products and services for a high quality, luxury design, distinct features, personalized and user-friendly service. The products and services are breaking through all of race, gender, age and culture targeting populations. The example is personal computers products, such as the iMac, iBook. Apple computers pay more attention to innovation rather than pricing products at lower level. The Macintosh operating system of Apple computers is a unique system in the computer industry. Apple marketing is able to charge a premium price on their products by their differentiation strategy.
2.9 Current Market Trends and Challenges facing the Industry
Consumer electronics industry is a very fast moving and continually changing marketplace where new product is launched on an everyday basis. Today the consumer electronics companies work on the mantra of providing more significant product at faster speed than their rivals (Alan Flitcroft, 2008). Time is a key element where the new winner innovative competitive rules at speed (Hart &Murphy, 1998). Every day one marketer is rolling out new technology. In such a trend, no one knows what each marketer will bring out tomorrow that will pose threat to others. So fast innovation pace makes the companies’ challenge is that it have been hit by more competitors who have entered market (Carter, 2005).
Thus, the marketers must seek for their competitive advantage, focus on innovate the new selling points to attract or retain customers. The words of Hart (1999) “must be able to getting different”, which especially in the top managed company to go on the market in an invincible position.
2.10 Conceptual Framework
The purpose of this research is to identify the influence of marketing mix on attitudinal buying behaviors consumers. Determine the significant differences exist in the relationship between Apple marketing mix perceptions of consumers and their con