Social And Environmental Influences On Consumer Purchase Decision In The Australian Banking Industry Essay.

Social influences and the environmental context impact product and brand purchase decision at all stages of the consumer purchase decision process. Marketing behaviour is not separate from its context but rather is embedded in the context in which it takes place. This means that the context of marketing behaviour is influenced by and can often influence the behaviour of the actors that take part in such behaviour.

1.  Identify the social and environmental context influences that are directly relevant to the consumers. 
2.  Analyse, specific to your case study, how these social influences (culture, social class, reference groups) and other environmental context factors impact on the consumer purchase decision and brand switching process.

Social and Environmental Influences on Consumer Behavior

The report brings about the discussion on the analysis of customer behaviour and the related aspects. Consumer behaviour is an important study which includes the assessment of certain external influences affecting the purchase decision of the individuals. Thus, the report will assess all the social and environmental influences in context to the case study given in Assessment one. The analysis of these influences will be studied in the case of Australian banking industry, and the marketing strategies of the firms. In the later part, of the report there will be description of the 7 or 4 P’s of marketing with context to the banking industry.

1. The case study of NAB (National Australian Bank) has represented different types of consumer behaviour towards purchasing financial instruments from the banks or financial institutions. Consumer behaviour is defined as the study of how individuals’ customer, groups, or organisation and all the activities associated with the purchase, use, and disposal of the goods and services. Thus, it is important for the marketers to understand consumer behaviour to devise their strategies to attain higher profits in the industry. NAB is considered as one of the four largest financial institutions in Australia in the aspects of market capitalisation. Therefore, the case has represented different types of behaviour which has been determined through the role of certain factors or influences (Joshi & Rahman, 2015).

Deregulation and the emergence of new forms of technology have created high competitive market conditions, which has led to a critical impact on the buying behaviour of consumers towards financial services. Thus, financial or banking institutions must also identify and understanding the changing patterns of consumer behaviour and become able to influence them. This has been linked to the assessment one, which showcases the behavioural patterns of repeat-passive, rational active, no-purchase, and relational-dependent highlights different ways the consumers behave to determine their decision regarding purchase of financial instruments from NAB (Hsu, Huang & Galliers, 2014).

Social factors or influences play a vital role in determining the consumer behaviours of individuals, such as reference groups, culture, social class, role in the society and others. Similarly, environmental influences also affect the buying decision of consumers towards financial instruments.

The social factors in context to the case of National Australian Bank in Assessment one, includes unawareness of the financial products, social belief related to the insurance schemes or financial products, and the tax-saving ability of the consumers. In addition, to these there are some other factors as the social need of the consumers to get access to education, is one such aspect which helps them to acquire information about the financial products; thereby making a purchase decision (Basu et al., 2015).

One example of the social factor or influence in the consumer decision towards financial services or instruments can be reference groups. As it has been commonly found that individuals make their decisions based in the part what their primary influence groups has done, towards obtaining financial instruments. This has been one common aspect of consumer influences in the banking industry across different countries (Mortimer et al., 2015).

The environmental influences includes introduction of new mobile apps, few visits to the bank/financial institutions, air pollution in the environment of banks and several other factors influence the purchase decision of consumers and their brand-switching process. Nowadays, it has been found that certain mobile applications has been introduced which has reduced the dependency on the paper-work. Thus, these above mentioned factors relate to the consumer’s purchase decision, and their brand-switching process from one financial institution to other in the banking industry (Daly & Gebremedhin, 2015).

2. Following the above discussion, there will be a description how these social and environmental factors play a role in influencing the purchase decision towards financial instruments. The social factor, culture, or cultural norms impact the financial decisions of the consumers, for an example some religions has forbidden or limited the amount of interest to be charged on loans. Thus, the consumers or investors under this belief may find it objectionable to invest in organisations which make money through charging interest (Souiden & Rani, 2015).

Market experience in the financial market, as another social factor affects the decision to purchase financial instruments. It has been a fact that the groups or individuals with more money to spend, and appropriate knowledge of the financial instruments will have more access to capital than other social groups. Thus, it indicates about a favourable decision of the consumers towards making purchase decision in the financial instruments from the banks (Saeidi et al., 2015).

Market Strategies in the Australian Banking Industry

Empirical studies in the marketing strategies or consumer behaviour decisions towards financial instruments has stated that factors such as confidence, loyalty and trust play a key role to the customer’s choice towards financial services. The factor of social class has been the major factor in brand switching and making investments in the financial products. It has been a fact that the financial needs of the people from middle class are confined or limited to savings account, mutual and pension funds, while individuals or consumers from high class would prefer financial institutions. They view financial institutions with a global perspective and financial instrument for active fund management. Moreover, the social factors also include an individual’s past or previous experience or satisfaction from the provided services from any particular banking institutions. For an example, if any consumer gets satisfactory services from NAB then, he may switch to other brands or financial institutions (Dootson, Beatson & Drennan, 2016).

In context to the case study given about NAB, it has been found that there have been some consumers with the repeat-passive behaviour, and this occurs due to less involvement in the financial products. The consumers who are passive, are generally those who although makes repeated transactions with a particular banking institutions rather looking out for other alternatives available in the financial market. Thus, it is one of the most important aspects in the banking industry, affecting the purchase decision of the consumers (Goodhart & Schoenmaker, 2016).

To discuss about the consumer’s choices and buying behaviour in context to the Australian banking industry it can be stated that Australia has sophisticated, competitive and profitable financial sector which effectively operates the financial or banking institutions in the industry.  Consumers in the Australian financial are said to lack the required level of literacy and education on the finance to be able to make logical and prudent decision in the market. Due to this factor, the Australian banking industry has been one of the highly regulated banking industries in the world (Worthington, 2016).

The consumers, who are literate and possess required knowledge, are able to make diversified investments across different banks in the country. As per the research conducted in the banking industry, i.e. Australian banking industry, consumers are satisfied with the services provided by the banks, thus they show a positive behaviour towards the institution (Coburn & Penuel, 2016).

The understanding of these social and environmental influences for the marketers or banking institutions is equally important along with the consumers, to devise their marketing strategies. To describe the strategies of marketers from different perspective, 7 P’s of marketing would be discussed in the banking industry.

7 P’s of marketing mix play an important role in the marketing of banking services, and similar to the marketing of other products, it has several elements. These elements include product, price, place, promotion, people, processes, and physical evidence. For the product in terms of financial market, it states that the product must satisfy the needs and wants of consumers (Howell, 2015).

The 7 P's of Marketing in the Australian Banking Industry

Discussing about the prices it means that the prices of the products are fixed in terms of the interest rates, service charges, and other fees which is used to cover transaction costs, overheads and the risk premium. In context to the NAB, it has been found that the bank is known to provide one of the most premium banking service, and the number of customers hold by the bank is very large. This represents the fact that the marketers at bank offer services at a very strategic and economical price. This ensures about their understanding about the social and environmental influences which affects their customers (Apergis & Cooray, 2015).

Promotion in context to the financial institutions and banks refers to all the vehicles which are used to inform, educate, and image building. National Australian Bank (NAB) practices promotion on the basis of clients/consumers, through focusing on the varying needs of the customers in different regions. As there has been a shift from the conventional advertising methods, therefore, NAB has also used ‘Break up’ campaign to promote their financial services, which turned out be a huge success on social media (Daly & Gebremedhin, 2015).

Place or ‘branch’ on other hand, is an important element in the banking services, as the features such as location of the banks, and convenience is the major factor which will determine the choice of bank by the consumers. NAB, offers their services and products (financial instruments) and practices their operations efficiently in Australia and New Zealand, and for the people living in these countries the location of the bank is approachable. Thus, these aspects state that NAB considers the risk of factors which may influence buyer decision before strategizing their goals (Honka, Hortaçsu & Vitorino, 2017).

‘People’ are a major element of the marketing mix in context to NAB, as they devise strategies and plans to reach out to the customers. A motivated and dedicated team or staff working with a positive attitude in the favour of business development and a high quality services will make the best most preferred by the customers in Australia.

Highlighting the aspect or element of processes in the marketing of banking services or products, it can be stated that process here refers to systems and procedures, which are used as vehicles for delivering maximum customer satisfaction. Hence, banks keep refining and redesigning their systems, and procedures to manage and enhance the level of customer satisfaction. The process in NAB usually starts when a customer reaches out to any branch or outlet of the NAB, to access to the required information whatever they need. Then, the further processes are carried out by the branch employee, as he is responsible to look for the required information, and accordingly provide services to the customer.

The element of Physical evidence, deals with understanding and evaluating the service before making a purchase and also to assess the customer’s comfort zone received with the service, and even after the consumption.  Under the element of physical evidence, it has been understood that factors such as lighting, colour, environment, temperature are some aspects which helps in developing a favourable perceptions amongst consumers.

Physical evidence in NAB is available in terms of the awards and accolades which are some of the achievements. In addition, there are number of reports which also mentions about the bank and they are also shared amongst the customers to acquire the information (Oliver, 2014). Thus, the bank must consider the social influence which may affect the buying behaviour of consumers, as physical evidence play a vital role in directing consumers towards obtaining financial services from NAB.

Market segmentation refers to the process of viewing heterogeneous market that consists some smaller homogenous parts, which are called as segments. Thus, to describe the term more precisely, it can be stated that segmentation results into each consumer being treated in a different manner.  

Segmentation in the financial services or banking industry involves certain aspects which deal with the different regions of the market, and it is considered as an important aspect. Segmentation acts as the basis of other marketing strategies such as targeting, positioning of the product and services. However, due to the high costs in the banking services, individual marketing is rarely present in the consumer market. Segmentation or the consumers which are amongst 9 segment markets, i.e. non-customers, middle-value customers, high value customers and others. Segmentation in the Australian market must be done keeping in mind all the aspects of social or environmental influences’ and their role in determining purchase from the bank (Lovelock & Patterson, 2015).

Thus, to discuss about the STP policies or marketing strategy mentions that the National Australian Bank segments the enterprises and the individuals who seek financial advice or help from the institutions. It indicates about the categorisation of segments into two, i.e. consumers and businesses, and provides services. Therefore, the Australian bank caters to the different needs of the customers according to their requirements.

It has been found that some financial institutions which fail in effective segmentation are observed with some of the major impacts on their services. Customers or consumers with different needs or requirements are served differently, with the same financial service, and communication policies. Due to this aspect, it results into some negative aspects such as reduced consumer satisfaction, and it becomes hard to retain consumers for a long period of time.

Under the case of Australian banking industry, which includes the aspect of National Australian bank it can be stated that the bank targets the large enterprises, and rich individual investors for marketing their financial instruments or services in the country (Lees, Winchester & De Silva, 2016).

Discussing about the present marketing strategy of the banking firm, i.e. National Australian bank from the given case study  in  assessment one, the current audience are the present customers. These existing customers are targeted by the national Australian bank, from different banking institutions. In addition, it has been also analysed from the case that bank targets some college or university students who seek for the financial services or advices. Thus, the bank further provides them required information and advice regarding investing in financial instruments.

The concept or marketing strategy of positioning, in context to the marketing of goods and services, in general refers to gaining an understanding about the position of the market /firm in the minds of consumers.

In the case of National Australian bank, it has been found that the positioning here is referred to the organisation, which would be able to manage at every stage in the life. Although, NAB has been working efficiently over years, but the company or firm must ensure developing a good corporate image in the minds of consumers and the way consumers perceive the products and services offered. The positioning strategy of the banking industry in Australia has been effective which led to a positive change on the consumer’s buying decision towards purchasing the financial instruments. Therefore, the above description has stated about the bank’s positioning strategy which highlights the profitability and stability in the Australian banking industry (Petersen, Kushwaha & Kumar, 2015).

Conclusion

To conclude the above discussion, it has been analysed that social and environmental factors influence the buyer’s behaviour to a major extent. The report has described the role of these influences on the consumer’s purchase decision for financial instruments in the Australian banking industry. Thus, it has been clearly understood that the banks or marketers must understand and provide their services considering the nature of consumer behaviour in different sections of society. As the Australian banking industry has been highly distinctive thus, marketers must focus on devising appropriate strategy to market their financial instruments and generating high trust and customer loyalty towards their institutions. Hence, the report has stated different influences which determine the buying behaviour of consumers in the financial market.

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