Understanding consumer behavior

Consumer Behavior and the Influence of Digital Technologies

Consumer behavior has diversified substantially in our modern world as a result of companies using digital technologies. This is due to the fact that consumer behavior is often influenced by knowledge about a brand, service, the surrounding environment, and, finally, motivation. With the rise of web-based opinion platforms, an emergent phenomenon in marketing has emerged through online product reviews, and it now plays an important role in influencing consumer decisions. As a result of easy access to information, the consumer environment has altered as a result of the increasing usage of digital technologies. The consumption process starts with an evaluation of the resources available and therefore, digital technologies that are employed at this step has changed consumer behaviors by mediating choices around the consumption. This essay, therefore, seeks to analyze how digital technologies are used to mediate choices around consumption on the basis of the economy around choices and the role of Yelp as user-generated content.

Influence of Online Product Reviews on Consumer Behavior

With the evolution of the internet, digital technologies have provided extensive opportunities to display their evaluations on online platforms. The increased availability of opinion-based platforms has influenced the decision process in consumption. Many of these opinion-based platforms are web-based and therefore offer a platform for online product reviews. These reviews are either written by professional editors or are consumer-generated, according to the personal experiences of previous experiences of the product. Zhang, ye, Law, and Li argue that these two types of reviews have different influences on the behavior of online users. Furthermore, the study shows that consumer-generated ratings about the environment, quality of food, restaurant services, and the increasing volume of online consumer reviews.

Impact of Online Popularity and Consumer-Generated Content

It is through the editorial reviews that the negative relationship between a product and a consumer has resulted in influencing the intention of consumers to visit a certain restaurant based on the review. Additionally, through online popularity, the potential demand of products is available through hyperlinks such as “yelp.com” giving an elaborate explanation of the type of service offered, the number of reviews and the comments posted by the previous consumers. This has had an impact on the net income based on the user-generated content to influence the income of restaurants where a higher price is significantly associated with greater online popularity.

Influence of Third-Party Websites on Consumer Choices

Third-party websites that offer independent consumer ratings negatively influence the choices around the consumption of a particular service. In their study, Zhang, ye, Law, and Li found that the volume of consumer reviews of a restaurant can significantly alter the visiting intention of customers due to the fact that up-to-date information displayed by the previous customer reviews. For instance, the higher price of restaurants is often associated with online popularity. Increasing online popularity results in an increase in price offered by the restaurants regardless of the environment, food quality, and the services offered.

The Role of Expert Consumers in Decision-Making

New consumers basically rely on the reviews of the product to gather information about its quality, pricing, and the nature of the product. When making decisions, therefore, the consumer evaluates the product relative to the essentiality, treat, and the expendable purchase in the product reviews such as the available online word of mouth reviews. According to a study conducted by Ghuo and Zhou, to investigate the effect of rating context that is characterized by variance and volume, and its interaction with the subsequent reviewer on 70410 restaurant reviews that was gathered from Yelp.com, there was a positive relationship between prior reviews and subsequent ratings. However, these ratings are affected by the variance and volume of prior ratings. According to their research what was evident is the fact that when prior reviewers are expert in analyzing the services provided by the restaurants based on information diagnostics, they exert social influence on the subsequent reviewers. The study actually affirms the view that social bias influences the consumption. This is in the connection with subsequent and prior reviewers. Online product reviews necessarily reflect on the performance and quality of the product being reviewed.

Influence of Digital Technologies on Consumer Choice

Potential consumers, therefore, do not make more accurate product alleviated decisions. However, when more expert consumers make more reviews on product evaluation websites such as “yelp.com” the volume of sales increases. This is because they are generally not susceptible to influence by the service providers themselves, therefore independent. Moreover, the expert consumers have the ability to assess the diagnostics of previous reviews and analyze them accurately. This has proven to have an effect on post-purchase and the evaluation of online reviews.

Consumer Behavior and the Economics of Organizations

Most often, the consumers determine the economics of organizations. The final consumption of products is the ultimate goal of almost all business-oriented ventures. The demand for goods and services is met by the number of consumers, and therefore, this implies that the source of demand is the consumers. In their psychological nature, people are interested in self-realization, fairness, freedom, ecological balance, social relations, and participation in discussions. This forms the basis for psychological and social need in consumer behavior.

Influence of Digital Technologies on Consumer Choices

Digital technologies have an impact on the consumers towards the purchase of a product. Consumers focus on why they should pick a certain product that is offered in a particular place and time. Even people that have abundant purchasing power have second thoughts when they encounter a negative review of the product they are looking for in online platforms such as “yelp.com”. The living standards of people, their social status, and the pleasure of use of a particular service have resulted in more use of technologies to narrow down the choices in a vast market filled with different competitors delivering the same product. Through these digital incentives, therefore, the consumption activities of individuals have been influenced by online and editorial reviews that have had an impact on the choice of consumption.

The Role of Social Media in Consumer Decision-Making

Many restaurants have explored the use of social media as a strategical marketing venture. This is because social media has provided an efficient communication means through worldwide web interaction. In the general demographics, most consumers share their experiences that serve as reliable sources for other new consumers. This is due to the availability of connection to a wide range of consumers that are willing to explore new dining experiences. Online reviews in social media are categorized based on the overall restaurant performance, the service quality offered in the restaurants, the price of different commodities, the conducive atmosphere of the restaurant, and the quality of food.

Impact of Online Reviews on Restaurant Selection

In a research conducted by Nefike Gunden on how online reviews influence consumer restaurant selection, it was clear that 49% of the respondents check the online reviews before exploring new dining experiences. A score of the relative importance of each of the offered attribute in restaurants was analyzed using conjoint analysis based on their hypothesis. The food quality and the atmosphere of the restaurant from their findings were the most desirable aspect new customers were looking for in making their dining choices.

Increasing Consumer Restaurant Selection through Online Reviews

Additionally, the study concluded that the figures obtained in online reviews have been attributed to an increase in consumer restaurant selection. This, therefore, means that the decision-making process of consumers is mostly influenced by online reviews that were written in the different restaurants available in the region. When the restaurant management develops strategies that utilize online rating platforms more consumers are prone to use their services. The opinion and feelings of prior customers are relayed to other people through online word of mouth and this affects their decision-making process.

Conclusion

In conclusion, the evolution of the internet and the use of digital technologies have provided extensive opportunities to display user’s evaluations on online platforms about products. The increased availability of opinion-based platforms has influenced the decision process in the consumption of products.

Bibliography

Guo, Bin and Shasha Zhou, “Understanding the Impact of Prior Reviews on Subsequent Reviews: The Role of Rating Volume, Variance and Reviewer Characteristics.” In Electronic Commerce Research and Applications, 1-12. Hong Khong: Elsevier, 2016. http://www.sciencedirect.com/science/article/pii/S1567422316300722?via%3Dihub

Neva, Julie, Frank and Thomas P.Weisskopf, ”Consumption and the Consumer Society,” In Social and Environmental Issues of Economics, 1-26. Medford MA: Global and Environment Institute, 2008.

Nefike, Gunden. ”How Online Reviews Influence Consumer Restaurant Selection,” In Scholar Commons, 20-77. Florida: University of Florida, 2017.

Ziqiong, Ye, Law, and Li, ”The Impact of e-word-of-mouth on the online popularity of restaurants: A comparison of consumer reviews and editor reviews” In International Journal of Hospitality Management. Hong Kong: Elsevier, 2010. http://www.sciencedirect.com/science/article/pii/S0278431910000198?via%3Dihub