Simulation Modeling of Consumer Behavior

Question: Discuss about the Simulation Modeling of Consumer Behavior. Answer: Introduction: Modern marketing greatly uses the concept of group influence where individuals share their ideas, thoughts, values or norms or share their goals and beliefs with others. In context to consumer behavior and marketing studies, it is defined as a reference group taken into consideration. This group is called the advertisers that influence the behavior of individuals who are considered as the reference point and an important factor in studying human behavior (Solomon, 2014). Advertising is aimed at influencing the consumers about different products or services. It is also aimed at increasing sales by influencing their behavior, attitude or consumers purchasing decisions. In the course of doing so, the advertisements are misinterpreted by the consumer group. It is considered as a source of learning the consumer behavior. This consumer consists of individuals of any age group from children to adults. The advertisements have a positive impact as it helps in providing information that assist s the customers in product evaluation (Percy Rosenbaum-Elliott, 2016). However, they have a negative impact as it misleads and misinformed leading to buying of inappropriate products. The advertisements show emotional and psychological features that resonate and outsell the products. Advertisements are made according to the age group, needs and what the consumers like (Schiffman et al., 2013). For example, the health drinks for women would be featured with a female model so that the target audience could connect themselves with the product. Among the reference groups, children are the most influential individuals who are influenced by the advertising campaigns. They are an excellent example of describing group influence and behavior. They are the main focus for the advertisers as they convince their parents for buying products. They are considered as individual consumers as they directly or indirectly influence their parents. The children get aware of the brands as they grow up and notice their parents regarding what brands they use. For example, McDonald's spends millions to get the attention of the children group. They spend a lot of time in watching television and therefore, they are considered as the soft targets for promoting their products and services. Fir stly, they observe a childs interaction with the market imagining the McDonalds marketplace pictures and sounds, colors related to it. Secondly, they convey their gestures and desires to their parents. Thirdly, the children after locating and retrieving the products make selections. Finally, the stage of purchasing the product and without parents consent is the final stage when they become independent consumers (Boyland Halford, 2013). This is how the advertisers target group influence. Previously, according to economic theory, consumer behavior is rational as people buy products based on decisions made after examining the evidence available and makes logical decisions (Foxall, 2016). However, with increasing demand for KFC, Beanie babies, Macdonalization and Disneyfication, it is evident that people are making choices based on their interests and are highly irrational. This irrational behavior is greatly influencing the purchasing market and the decision making of the consumers have become highly irrational as mentioned by the neoclassical method of economic theory. The irrational elements overpower the rational decisions. According to Dan Ariely, the professor of human behavior explained that human behavior is largely influenced by the perceptions made during the first time and the price tag that have a great impact on their buying (Kadyrova Panasyuk, 2016). The behavioral economics theory explains that consumer behavior is irrational as it made choices according to short-sighted judgments and based on others perspectives. They do not rely on the rational properties of the products they offer and therefore, the customers ends up buying the brand. People are willing to pay for something when something free is involved with it. The figure zero is an irrational excitement that triggers human behavior. Therefore, people buy things that make them get something free along with the transaction. There are many options open for the consumers that distract them from choosing the right product for them. Organizational buying is the process of decision making by the formal organizations in order to establish the need for the purchased services and products (Baker Parkinson, 2016). It also identifies, evaluates and choose the alternate suppliers and brands. There are a number of factors that influence their decisions making and is different from consumer behavior. They are rational in their decision making and are motivated by emotional factors. Their decisions involve technical and complex decisions and there are several steps involved in their buying decisions. The economics is the major criteria that lead to organizational buying behavior rational. This is done because they have to justify their decisions to other members and to the organization. This rational decision making proved successful for the customers. They are making life cycle costs and valued analysis for the evaluation of their products. The organizations also calculate the price at the time of purchasing, running of the product and maintenance related to goods. The problem recognition, general description, product specification, suppliers research, proposal solicitation, supplier selection, order specification and performance review are the rational steps involved in organizational buying behavior (Lilien, 2014). Consumer misbehavior is an important phenomenon that affects the experiences of the consumers being an inseparable part of it. The behavioral activity by the consumers that violate the accepted norms of conduct in consumption and disrupt the consumption order is defined as consumer misbehavior (Daunt Greer, 2015). The marketing activities do contribute to the consumer misbehavior. The consumers misbehave in many ways. The consumers misbehave when they are on a holiday or traveling. The disposal of things in an environmentally damaging manner, misbehaving consumers shouting at waiters in a restaurant, shoplifting and disruption of reputed brand companies by making false allegations are some of the examples of consumer misbehavior. The marketing activities like pricing and distribution make consumers misbehave. Some consumers avoid paying; take advantage of loans, credit cards despite knowing their financial condition, shoplifting, claiming for false change or credit card fraud influe nces other consumers in such activities (Goworek, 2014). The vandalism of shopping malls and shops, unauthorized distribution of bootleg products and physical damage to in-store displays. The concept of deshopping in which people return the products in a damaged condition deliberately to get the refund is also a type of consumer misbehavior. The switching of the price tags, driving away from a petrol station without paying also depicts consumer misbehavior. The promotions are done by marketers also influence consumer misbehavior. The adding of graffiti to the advertising posters, advertising in order to disrupt a brand and abusing the details of other customers also reflects consumer misbehavior. Thus, the marketing activities contribute to the consumer misbehavior. The marketing databases are also misused by the consumers. The stealing or misbehaving other consumers personal information, credit card details by hacking the marketing databases for fraudulent use also shows consumer m isbehavior(Moorman Day, 2016). The marketing research activity shows consumer misbehavior like poll-rigging and deliberate false response. The consumers also misbehave with the marketing officials and employees. Consumers abuse the call center operatives being the front line staffs in marketing, abuses the complaint department and service staffs. Moreover, some consumers also recover consumer details from scratch and pretend to be from a legitimate organization defining consumer theft. The shoplifting is one of the major types of consumer misbehavior that includes hotel theft, phone call fraud and identity theft are the fastest growing crimes in many countries. 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