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HOW TO BE A SMART CONSUMER

PREPARED BY:
ZELIHA
TAY LIANG ENG
NOR FARALISA


INTRODUCTION

Each home might be completely different from one another, but what they all share in common is using home appliances. From the fridge, freezer, microwave, dishwasher and oven, you can find most of them in every kitchen across the world. All these help with proper preparing of the food and other kitchen related tasks. While years ago only cook chefs had access to most of these appliances in their restaurants, nowadays every family can easily buy all of these appliances and more.

One goal we have when we shop is to be able to save money on the purchases we make. But we all face the challenge of making sure that when we spend our money, we are also doing so wisely and safely. Recently, the fallout on product recalls, scams and shoddy workmanship have led to finger pointing, scapegoating, lawsuits and even penalties or imprisonment. Many of these moves have resulted in better regulations and practices, but ultimately, we share the responsibility for keeping ourselves safe.

We need to be more aware of what it is we buy and try not to get all excited just because something sounds too good to be true. This is why knowing how to shop for the best will be beneficial for whenever you will be put in the position to actually do the shopping yourself, be it online or at a local store.

According to Yamamoto Y. (2008), consumer decision-making in electricity consumption is dependent on the characteristics of the particular electrical appliances they use. The decision-making about electrical appliance use and electricity consumption in the home is not always rational and is affected both by the particular characteristics of appliances and the payment system for electricity consumption along with human psychology.

FACTORS INFLUENCING CONSUMER PURCHASE DECISION

Factors that influence customers’ purchase decision are as below:-

1. Environmental Factors
A family member can strongly influence consumer's behavior. Husband and wife involvement varies widely by product category and by stage in the buying process. They affect behavior and shopping habits of consumers and may be related to the release of new products or become a source of innovation for brands.

2. Personal Factors
The decision making was also influenced by personal factors such as an increase in family income, attractive sales promotion, and also the additional sources of income. Therefore, the high level of education increase an individual in awareness of product availability, product features, and technological advancements has led to a more complex nature of purchasing style.

3. Psychological Factors
There are four psychological factors impacting the purchasing decision. These are motivation, perception and learning beliefs and attitudes (Wolfe, 2001).

4. Motivation
Motivation is important to determine the motive for making the purchase. Motives are based on Maslow's hierarchy of needs starting with physiological and ending with self actualization. Motives are often subconsciously driven and therefore measuring them is difficult.

5. Perception
Individual perception has a significant role on consumer's information search and how the information is interpreted. Consumers choose what information they perceive as important/relevant and discard the remaining. Therefore, they are more likely to remember information that supports their existing beliefs and disregard information that does not.

6. Attitudes
An attitude is derived through experiences, interactions, personality and lifestyles. Marketers usually try to match their products image to the personalities of their target market. Thus, it creates a means of allowing consumers to identify with the product.

CHOICE OF DECISION

When it comes to buying appliances, it is not always easy. There are a lot of pieces of information that can make the process more confusing. If you know what questions to ask or what answers to have before you head to the nearest housewares section, then you will be able to buy the new appliances you need more easily.

Your level of awareness begins with asking yourself “What am I buying?”

• Buy From Reputable Sources
As a consumer, we should know where the appliance we wish to buy is coming from.

• Keep Your Eyes Open For Counterfeits And Pirated Products
As consumer, we should know the product we purchased of what it is made of.

• Recognize Quality
When we buy food, scrutinize the ingredients intently and look through other items like toys, clothing and other merchandise with a fine tooth comb.

• Buy Local
This is a personal choice and may not be a matter of black or white. There are some appliances you may prefer to get locally because they function spectacularly well as imports.

• Knowledge of Your Appliance
When shopping for new home appliances, read the information listed on the required Energy Guide labels found on such items as room air-conditioners, clothes washers, dishwashers, freezers, refrigerators, refrigerator-freezers, and water heaters.

It is also important to ask yourself the following questions:

• "Do I really need the particular appliance I am thinking of buying?"
We should not buy the particular appliance which we do not really need it. Purchase unnecessary products will cause us to waste money.

• "If I don’t spend the money on the appliance would it be more useful to use it for something I need more?"
If you are thinking about buying a freezer, consider such things as the initial cost, cost of electricity to operate, and how much you could save by purchasing items on sale.

• “Should I replace or repair?”
Sometimes replacing a particular appliance will be cheaper in the long run than having it repaired. Make the decision which will give you the greatest financial advantage.

• “When is the right time to purchase?”
Buy on sale rather than pay full price for appliances. Usually, most appliances will be on sale sometime or several times throughout the year. You could save from 25 to 30 percent or more of the original price. You may be surprised at the discount the dealer will be willing to give you.

• Which shop offers the best price?

When looking for a new or used appliance, shop around and compare prices at different places at your place of work and in your community. In general, select the make and model that will give you the greatest overall financial advantage.

• “Is it suitable?”
Do not buy an appliance with a capacity larger than you really need. In general, the larger the capacity will cost more for consumer to purchase the home appliance. It is not worthwhile to our money pay for more capacity than we need.


GOOD DECISION MAKING

Do you have trouble making decisions? For most of us, it is difficult to know if we are using good judgment as we make daily decision. It becomes even harder with important, life-changing decisions. Below are five stages of decision making process:-

STEP 1: Problem/Need Recognition

Recognition of need or a problem is the first stage of the decision making model. The recognition of a problem arises in the circumstances where an individual realizes the difference between the actual state of affairs and desired state of affairs. The recognition of a problem or need depend on different situations such as personal or professional and this recognition results in creation of a purchasing idea. For instance, consumer may recognize the need to buy a laptop when there is need to carry it use it in different places which is convenient compared to a desktop computer.

As stated by Tyagi (2004) convincingly argues that an individual might not be aware of the need for a specific product until he or she encounters with the product as a result of engaging in ‘window-shopping’, media advertisements, or in a range of other circumstances. The human need has no limit therefore; the problem recognition is a repetitive in nature. According to Maslow theory, human being is always dissatisfied, when an individual’s one need is satisfied another one will come out and this trend continues repetitively.

STEP 2: Information Search

The next stage of the model is information search. Once the need is recognized, the consumer is likely to search more product-related information before directly making a purchase decision. However, different individuals are involved in search process differently depending on their knowledge about the product, their previous experience or purchases or on some external information such as feedback from others.

Search of information process itself can be divided into two parts as internal search and external search. Internal search refers to the consumers compare the alternatives from their own experiences and memories depending on their own past experiences and knowledge. For example, searching for fast food because customers often use their knowledge and tastes to choose the right product they need rather than asking someone for an advice. On the other hand, external search ends to be for bigger purchases such as home appliances or gadgets. For instance, consumers who wish to buy a mobile phone tend to ask friends’ opinion and advices before making a purchasing decision.

STEP 3: Evaluation of Alternatives

After gathering enough information at the first stage the consumer gets into comparing and evaluating that information in order to make the right choice. In this stage the consumer analyzes all the information obtained through the search and considers various alternative products and services compares them according to the needs and wants. Moreover, another various aspects of the product such as size, quality, brand and price are considered at this stage. Therefore, this stage is considered to be the most important stage during the whole consumer decision making process.

Furthermore, according to Ha et al (2010), the process of evaluation of alternatives can sometimes be difficult, time consuming and full of pressure for a consumer. This is because it is quite hard to find an ideal product or service that satisfies the needs of the customer as there are numerous factors that hinder the consumer purchasing decision making process. For instance, when it comes to online hotel reservation or furniture purchasing evaluation process, it can be quite complex. Several factors and aspects need to be considered before making a purchasing decision.

The individual factors such as age, culture, taste and budget have all impact on the evaluation process by the consumer. For example, when purchasing a furniture, the young people consider the factors such as convenience and price where as the old people are likely to consider the quality and design.

STEP 4: Purchase Decision

Once the information search and evaluation process is over, the consumer makes the purchasing decision and this stage is considered to be the most important stage throughout the whole process. In this stage, the consumer makes decision to make a final purchase as he or she has already reviewed all the alternatives and came to a final decision point.

Purchased further can be classified into three different types: planned purchase, partially purchase and impulse purchase (Kacen, 2002). Moreover, author stating that there are a number of factors that can affect the purchasing process. For example, the desired product may not be available at the stock. In this case the purchase process is delayed and consumer may consider buying the product through online stores rather than visiting traditional physical stores.

STEP 5: Post-Purchase Evaluation

The final stage in the consumer decision making process is post-purchase evaluation stage. Many companies tend to ignore this stage as this takes place after the transaction has been done. However, this stage can be the most important one as it directly affects the future decision making processes by the consumer for the same product. Therefore this stage reflects the consumer’s experience of purchasing a product or service.

Under post-purchase evaluation stage, the consumer may either get satisfaction or dissatisfaction with the appliance purchased depending on the evaluation of the purchase and comparison of their own expectations. The outcome forms the experience of the customer and it this experience is believed to have a direct impact on the next decision of the consumer to purchase the same product from the same seller.

Simply, if the consumer is satisfied with the purchase it is likely that the purchase may be repeated while if they have a negative experience from the purchase it is unlikely that the consumer may make the decision to buy the same product from the same seller or even may not buy the product at all.


SUMMARY

Consumers are influenced by many factors to buy cars, such as family needs, social pressure, economic resources, and product characteristics, and they usually undergo a long decision making process. Although major household appliances usually last for many years, the initial purchase can take a large amount of your money at one time if you pay cash. If you finance the purchase, you will have monthly payments for an extended period of time. You will have monthly operating costs (utility bills) to pay also.

When you buy your appliance for the cooking area, there are some things you need to consider. One of the most important criteria nowadays for shopping is getting items that are energy efficient. They help enormously in reducing the monthly electricity bills and running your household on a much lower budget. The appliances need to be durable, long lasting and efficient. After all such a big appliance is much more expensive than other small tools and gadgets. If you buy such an appliance and it does not last you at least for the next 10 years, you have made a bad choice in your shopping experience.

When buying appliances, don’t buy models with features you probably will never use. They should pay more attention to brand name, features, style, and packaging of their significant products than life-changing products. Also, buy appliances with only the options you really need and plan to use.

As a user, we should aware on the eco-friendly home appliance products such as recycle and reuses the resources, install an inverter to save energy and reduce of chemical substances. By introducing the environment-friendly product in the wider community can reduce the unnecessary wastage and minimize the negative impact on the environment Malaysia.

These decisions become complex depending on the consumer’s perception about a particular product because before selecting and purchasing among the different types of product, they have to go through the evaluating and comparing processes. Therefore, understanding the process of consumer decision making is becoming a common view point by many manufacturers and consumers.


LIST OF REFERENCES

Dudovskiy, J. (2013). Consumer Decision Making Process: a detailed analysis. [Online]. Available at: http://research-methodology.net/consumer-decision-making-process-a-detailed-analysis/ (Accessed: 5 February 2014).

Gorman C. Ways to Save on Purchasing Household Appliances. [Online]. Available at: http://www.thefrugallife.com/frugalappliances.html (Accessed: 11 January 2014).

Ha, H., Janda. S. and Muthaly, S., (2010). “Development of brand equity: evaluation of four alternative models”, Service Industries Journal, 30(6), pp. 911-928

Kacen. J. J. and Lee. J. A., (2002) “The influence of culture on consumer impulsive buying behaviour”, Journal of consumer psychology. 12(2), pp. 163-174.

Hong, McCullough, Jim (2010). Differences in consumer behavior when purchasing life-changing and significant products. [Online]. Available at: http://www.freepatentsonline.com/article/International-Journal-Business-Research/279263005.html (Accessed: 12 February 2014).

Wiedmann, K., Hennigs, N. and Siebels, A. (2007) “Measuring Luxury consumer perception: A cross-culture framework”, Academy of Marketing Science review, 2007(7).

Wolfe (2001). Differences in consumer behavior when purchasing life-changing and significant products. [Online]. Available at: http://www.freepatentsonline.com/article/International-Journal-Business-Research/279263005.html (Accessed: 12 February 2014).

Yamamoto, Y (2008). 'Decision-Making In Electrical Appliance Use In The Home'. Sciencedirect.com. N.p., 2008. Web. Available at: http://www.sciencedirect.com/science/article/pii/S0301421508000281 (Accessed: 12 Feb. 2015).

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