Date of Award

6-2009

Document Type

Union College Only

Degree Name

Bachelor of Science

Department

Psychology

First Advisor

Kenneth Debono

Second Advisor

Suthathip Yaisawarng

Language

English

Keywords

marketing, purchase, shopping, decision, model

Abstract

Economists often explain consumer utility and demand in terms of income and price, but fail to consider the psychological factors that simultaneously influence our everyday decisions to buy the products that we do. This thesis aims to meld consumer behavior findings from the economic and psychological disciplines by analyzing a set of actual consumer behavior data. The main objective of this thesis is to determine how consumer purchasing decisions are dependent upon economic, psychological and marketing variables. Part 1 of this thesis develops a comprehensive model to embody the effects of Price, Income, Marketing Strategy, Pre-Shopping Behavior, Brand Loyalty, Gender, Education Level, Age, Household Size, Number of Children, Marginal Value of Time and Willingness to Pay on a consumer's Decision to Purchase two target goods. A marketing survey was used to gather information pertaining to participants’ most recent purchases of Special K® cereal and Toyota® automobiles. Two probit models were developed for each good category, the first of which included all observations, the second of which excluded all Brand Loyal observations because Brand Loyalty was deemed to perfectly predict Decision to Purchase for both goods. Special K Model 1 revealed a significant effect of MSRP listing, Coupons and Other Pre-Shopping behaviors on one’s Decision to Purchase. Special K Model 2 revealed a significant effect of Coupons, Other Pre-Shopping behaviors and Willingness to Pay on one’s Decision to Purchase Special K® cereal. Toyota Model 1 revealed significant effects of Children, Advertisements, Rebates and Comparison Shopping on Decision to Purchase, while Toyota Model 2 revealed a significant effect of Children, Rebates and Comparison Shopping on Decision to Purchase a Toyota® automobile. Part 1 also employed a Chi Squared analysis to determine if the variables of Income, Age or Education were related to ones’ responsiveness to individual marketing strategies. Contingency results revealed a significant relationship between Income, Education and Age and many of the marketing strategies for both cereal and automobiles. Part 2 of this thesis is intended to provide a more in depth look at the effects of Gender on one’s Purchase Decisions, Pre-Shopping behaviors and responsiveness to individual marketing strategies. Prior literature focused on the Elaboration Likelihood Model of Persuasion has suggested that there is a difference in the route by which males and females’ process persuasive information, suggesting that marketing strategies might be interpreted differently between genders. Statistically significant differences were found between the frequency at which males and females purchased cereal, responded to marketing strategies and engaged in pre-shopping behaviors, lending additional support to previous findings on the sex-role orientation of household products. The results of this thesis have important implications for marketers and retailers alike. By better understanding the purchasing tendencies of their specific customer base, this thesis will aide retailers in predicting customers’ future behaviors, allow them to employ more effective marketing strategies, and most importantly, increase their sales.

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