Decision Making Process WRT Consumer Behavior

Question 1. Explain Decision making process and various types of decision with examples? Ans: Decision making can be regarded as the mental processes (Cognitive process) resulting in the selection of a course of action among several alternative scenarios. Every decision making process produces a final choice. The output can be an action or an opinion of choice. Developed by B. Aubrey Fisher, there are four stages that should be involved in all group decision making.These stages, or sometimes called phases, are important for the decision-making process to begin Orientation stage- This phase is where members meet for the first time and start to get to know each other. Conflict stage- Once group members become familiar with each other, disputes, little fights and arguments occur. Group members eventually work it out. Emergence stage- The group begins to clear up vague opinions by talking about them. Reinforcement stage- Members finally make a decision, while justifying themselves that i t was the right decision.When in an organization and faced with a difficult decision, there are several steps one can take to ensure the best possible solutions will be decided. These steps are put into seven effective ways to go about this decision making process. An Example illustrating Decision Making Process in an Organization * The first step – Outline your goal and outcome. This will enable decision makers to see exactly what they are trying to accomplish and keep them on a specific path. * The second step – Gather data. This will help decision makers have actual evidence to help them come up with a solution. The third step – Brainstorm to develop alternatives. Coming up with more than one solution ables you to see which one can actually work. * The fourth step – List pros and cons of each alternative. With the list of pros and cons, you can eliminate the solutions that have more cons than pros, making your decision easier. * The fifth step – Make the decision. Once you analyze each solution, you should pick the one that has many pros (or the pros that are most significant), and is a solution that everyone can agree with. * The sixth step – Immediately take action.Once the decision is picked, you should implement it right away. * The seventh step – Learn from, and reflect on the decision making. This step allows you to see what you did right and wrong when coming up, and putting the decision to use. Another example showing Decision Making Process with respect to consumer behavior. This model is important for anyone making marketing decisions. It forces the marketer to consider the whole buying process rather than just the purchase decision (when it may be too late for a business to influence the choice! The model implies that customers pass through all stages in every purchase. However, in more routine purchases, customers often skip or reverse some of the stages. For example, a student buying a favourite hamburger would recognise the need (hunger) and go right to the purchase decision, skipping information search and evaluation. However, the model is very useful when it comes to understanding any purchase that requires some thought and deliberation.The buying process starts with need recognition. At this stage, the buyer recognises a problem or need (e. g. I am hungry, we need a new sofa, I have a headache) or responds to a marketing stimulus (e. g. you pass Starbucks and are attracted by the aroma of coffee and chocolate muffins). An â€Å"aroused† customer then needs to decide how much information (if any) is required. If the need is strong and there is a product or service that meets the need close to hand, then a purchase decision is likely to be made there and then. If not, then the process of information search begins. A customer can obtain information from several sources: †¢ Personal sources: family, friends, neighbours etc Commercial sources: advertising; salesp eople; retailers; dealers; packaging; point-of-sale displays †¢ Public sources: newspapers, radio, television, consumer organisations; specialist magazines †¢ Experiential sources: handling, examining, using the product The usefulness and influence of these sources of information will vary by product and by customer. Research suggests that customer’s value and respect personal sources more than commercial sources (the influence of â€Å"word of mouth†). The challenge for the marketing team is to identify which information sources are most influential in their target markets.In the evaluation stage, the customer must choose between the alternative brands, products and services. An important determinant of the extent of evaluation is whether the customer feels â€Å"involved† in the product. By involvement, we mean the degree of perceived relevance and personal importance that accompanies the choice. Where a purchase is â€Å"highly involving†, th e customer is likely to carry out extensive evaluation. High-involvement purchases include those involving high expenditure or personal risk – for example buying a house, a car or making investments. Low involvement purchases (e. . buying a soft drink, choosing some breakfast cereals in the supermarket) have very simple evaluation processes. Post-purchase evaluation – Cognitive Dissonance The final stage is the post-purchase evaluation of the decision. It is common for customers to experience concerns after making a purchase decision. This arises from a concept that is known as â€Å"cognitive dissonance†. The customer, having bought a product, may feel that an alternative would have been preferable. In these circumstances that customer will not repurchase immediately, but is likely to switch brands next time.To manage the post-purchase stage, it is the job of the marketing team to persuade the potential customer that the product will satisfy his or her needs. T hen after having made a purchase, the customer should be encouraged that he or she has made the right decision. Question 2. Take any international country of your choice and list down their social, cultural, lifestyle, business etiquettes and trade practices in detail? Ans: Country in Discussion: Nigeria Social / Cultural and Life Style Background The culture of Nigeria is shaped by Nigeria's multiple ethnic groups. The country has over 50 languages and over 250 dialects and ethnic groups.The three largest ethnic groups are the Hausa-Fulani who are predominant in the north, the Igbo who are predominant in the south-east, and the Yoruba who are predominant in the southwest. The Edo people are predominant in the region between Yorubaland and Igboland. Much of the Edo tends to be Christian while the remaining 20 percent worship deities called Ogu. This group is followed by the Ibibio/Annang/Efik people of the coastal southeastern Nigeria and the Ijaw of the Niger Delta. The rest of Nig eria's ethnic groups (sometimes called ‘minorities') are found all over the country but especially in the middle belt and north.The Hausa tend to be Muslim and the Igbo are predominantly Christian. The Efik, Ibibio, Annang people are mainly Christian. The Yoruba have a balance of members that are adherent to both Islam and Christianity. Indigenous religious practices remain important in all of Nigeria's ethnic groups, these beliefs are often blended with Christian beliefs. Nigeria is famous for its English language literature and its popular music. Since the 1990s the Nigerian movie industry, sometimes called " Nollywood" has emerged as a fast-growing cultural force all over the continent.All over the country, and even increasingly in the conservative north, western music, dresses and movies are ever popular. The music of Nigeria includes many kinds of folk and popular music, some of which are known worldwide. Traditional musicians use a number of diverse instruments , such as the Gongon drums Football (soccer) is extremely popular throughout the country and especially among the youth, both field soccer and professional international soccer, has developed into a cult of unity and division.Supporters of English football clubs Manchester United, Arsenal, Liverpool and Chelsea often segregate beyond the traditional tribal and even religious divide to share their common cause in Premier League teams. The Nigeria national football team, nicknamed the Super Eagles, is the national team of Nigeria and is controlled by the Nigeria Football Federation (NFF). Nigerian food embellishes a rich blend of traditionally African carbohydrates such as Yam and Cassava as well as vegetable soups made from native green leaves.Praised by Nigerians for the strength it gives, Garri is a powdered Cassava Grain that can be readily eaten as a meal and is quite cheap. Yam is either fried in oil or pounded to make a Mashed Potato like Yam pottage. Nigerian beans, quite diff erent from green peas, is widely popular. Meat is also popular and Nigerian Suya, a barbecue like method of roasting meat, is a well known delicacy. Bush meat, meat from wild game like deer and giraffes is also popular. Fermented palm products is used to make a traditional liquor, Palm Wine, as is fermented Cassava.Business Background in Nigeria The fact that Nigeria is not a magnet for international investment could be seen as a tragedy of immense proportions. Years of political instability, regional strife and the weakening influence of massive corruption have resulted in the country failing to capitalize on its many advantages; leaving the mass of the population in relative poverty and the country enormously infra-structure poor. A large number of international organizations and business people have been wary of doing business in Nigeria for many years.This may seem strange given that Nigeria is one of the most populous countries in Africa as well as being one of the most oil-ric h places in the world. Couple this with the fact that the country is abundant in many other natural resources and has good port facilities and you might think that international business would be fighting for a piece of the action in Nigeria. Huge strides have been made in the last few years to try to tackle the many endemic problems which assail the country — with political and economic stability being seen as the key weapons in attacking the corrosive influence of corruption.Whether the actions being taken on the ground now lead to dramatic improvements in levels of transparency and levels of corporate governance remain to be seen — in the meantime, the country struggles along and those doing business in Nigeria need to be aware of the issues that await them. Business Etiquettes Nigerians like to use language in a fairly flowery fashion and will often address you with great courtesy and overt signs of respect. This desire to show respect to people is shown in the Nig erian use of titles and honorifics.People will often be addressed as Uncle, Auntie, Chief, Mazi, Doctor etc. rather than by the use of first names. Business conversations will often veer towards the personal and you may be asked questions about family, hobbies and other interests within business meetings. This is an important section of the meeting and should be treated as such. It is not seen as overly personal but rather as a signal of warmth and friendship. Handshaking is very important and it is usual to exchange long, lingering handshakes with everybody you meet. Nigerian Management StyleAs you would expect in a strictly hierarchical culture, managers are expected to lead quite strongly. The boss is expected to make decisions (with or without wider consultation) and the decisions of the boss are expected to be carried out to the letter. Directions should be given in a polite and friendly but definitive fashion. Spell out in detail what needs to be done — anything which i s not explicitly requested, is likely to remain undone. This does not mean that subordinates are inefficient or lazy, merely that they expect the boss to know exactly what he wants to happen and to explain things to them fully.It is important to dress well in Nigeria as the way you are dressed will signal your relative level of importance. Men should wear dark suits and ties and women should wear dark, demure business-style suits. In return for loyalty, the manager will often take on a paternalistic role with regard to colleagues. The manager is expected to take an interest in subordinates beyond their directly work-related duties. People are as likely to ask the boss advice on personal matters as they are on business issues. Indigenous Nigerian companies will, however, have an approach and flavor all of their own.All native Nigerian companies will display massively hierarchical tendencies as befits a country rich in tribal tradition and culture. Thus the boss expects and receives r espect from those below them in the structure. As age is highly valued in Nigerian culture, managers are often of the older generation — age brings wisdom. Although people at a middle-management level will like to give the impression that they have great power in the organization, they rarely do. Decisions are invariably made right at the top, so try not to waste too much time trying to force decisions out of more junior employees.If possible, go right to the top. This does not, however, mean that people lower down the corporate structure can be ignored as they may very well be pivotal in influencing the eventual decision-maker. As a relationship-oriented culture, it is important to be seen to be trying hard to develop good relationships at all levels within the organization. Economic Facts previously hindered by years of mismanagement, economic reforms of the past decade have put Nigeria back on track towards achieving its full economic potential. Nigerian GDP at purchasing power parity more than doubled from $170. 7 billion in 2005 to $374. billion in 2010, although estimates of the size of the informal sector (which is not included in official figures) put the actual numbers closer to $520 billion. Correspondingly, the GDP per capita doubled from $1200 per person in 2005 to an estimated $2,500 per person in 2009 (again, with the inclusion of the informal sector, it is estimated that GDP per capita hovers around $3,500 per person). It is the largest economy in the West Africa Region, 3rd largest economy in Africa (behind South Africa and Egypt), and on track to becoming one of the top 30 economies in the world in the early part of 2011.Although much has been made of its status as a major exporter of oil, Nigeria produces only about 3. 3% of the world's supply, and though it is ranked as 15th in production at 2. 2 million barrels per day (mbpd), the top 3 producers Saudi Arabia, Russia, and the United States produce 10. 7mbpd (16. 8%), 9. 8mbpd (15. 4% ), and 8. 5mbpd (13. 4%) respectively, collectively accounting for 63. 6mpd (45. 4%) of the world's total production. [2] To put oil revenues in perspective: at an estimated export rate of 1. 9mbd, with a projected sales price of $65 per barrel in 2011, Nigeria's anticipated revenue from petroleum is about $52. billion. This accounts for less than 14% of official GDP figures (and drops to 10% when the informal economy is included in these calculations). Therefore, though the petroleum sector is important, it remains in fact a small part of the country's overall vibrant and diversified economy. The largely subsistence agricultural sector has not kept up with rapid population growth, and Nigeria, once a large net exporter of food, now imports some of its food products. In 2006, Nigeria successfully convinced the Paris Club to let it buy back the bulk of its debts owed to the Paris Club for a cash payment of roughly $12 billion (USD).Trade Practices: The Federal Government plays the ro le of protecting local industries and the labor market from unfair competitions and trade practices of developed countries. While Nigerian government appreciates that the world is a global village, in terms of exchange of goods, services and persons, it will not open the nation‘s borders to the influx of foreigners in whatever guise without considering the security and economic implication inherent in the administration of Expatriate Quota and other immigration formality. While it is true that Nigeria as a developing country needs to benefit from the xperiences and technology of the advanced nations, it is important that we protect our local manpower by ensuring that jobs that are meant for Nigerians are not occupied by foreigners in order to stem the unemployment rate in the country. Although the world is a global village and the WTO preaches free trade or liberalization of trade, it is the government’s duty both individually and as government to protect our local indu stries and markets in order to avoid being reduced to mere consumers of labor and technology of the advanced nations.Their focus at all times should be to develop indigenous technology, local capacity building for both our industries and markets". Also, the administration of Expatriate Quota helps attract foreign direct investment; fast track economic development; transfer technology through importation of modern machinery and equipment; build and enhance local capacity and skills; institutionalize Nigerian understudies attached to Expatriates and for appropriate documentation.ALTERNATIVE TRADE NETWORK OF NIGERIA (ATNN) The Alternative Trade Network of Nigeria (ATNN) was established in 1994 with 25 artisans drawn from different parts of Nigeria as a Non Governmental Trade and Development Network. It was formerly registered with Corporate Affairs Commissions Abuja on the 7th January 1999 as an Incorporated Trustee with a five member Governing Board. The daily operations of the n etwork are coordinated by program staff and team of volunteers under the leadership of the Director.ATNN is a registered pioneer member of the International Fair Trade Association (IFAT) formed in 1994 now the World Fair Trade Organization (WFTO) and also a founding member of the Cooperation for Fair Trade in Africa (COFTA) with its Africa Regional Office based in Nairobi, Kenya. With a founding membership of 25 artisans and groups, ATNN membership has grown to 120 cooperatives, groups and individuals (over 3616 individuals) engage in both food and Non food products from different parts of Nigeria who are grass root based and committed to the principles and standards of fair trade. 3% of the current membership is women, employing over 3616 people. 1774 apprentices have also been trained and are now self employed and running their business in different areas of micro enterprises. ATNN has the following thematic areas of intervention 1. Fair Trade Market Access, Retailing and Export T rading†¦Ã¢â‚¬ ¦ This program provides unique solutions to specific members based on identified needs, level of business development, size, structure, markets, retailing and other trading opportunities. 2. Producer Development, Community Mobilization and Empowerment.This program engages participatory method of development of both formal and informal groups of producers and communities in identifying and establishing core strength and weaknesses and collective designing of sustainable and achievable business solutions. 3. Fair Trade Advocacy and Economic Rights†¦Ã¢â‚¬ ¦ The objective of this program is to develop and disseminate appropriate fair trade information to raise beneficiary's awareness and stake holder's interest and support for effective and proactive fair trade participations.It also highlights and lobby against unethical business, production and trade practices and policies that are detrimental to community growth, environmental protection and other impacts that are related to sustainable production and development. The Alternative Trade Network of Nigeria believes in fostering an accelerated producers businesses development and sustainable income through developing, consolidating and advancing the core mission and objectives of the global fair Trade Movement within Nigeria, Africa and the world over.This is achieved through the offering and provision of technical guidance, market support, networking and awareness rising for favorable trade policies and micro business development measures. ATNN, in its business development services also ensures that producers do not just access profitable markets, but produce quality products and get appropriate value for their labor. ATNN generally desires to achieve the following: 1. Increased and improved business skills