Essay Sample on Data Revolution: Unlocking Business Insights with the Power of AI and IoT

Introduction

Data has always been an essential priority for businesses. However, most industries have only managed to get an efficient way to collect data during the digital revolution. Technology proliferation has boosted the ability of businesses to contextualize and draw insights from data. New technologies such as artificial intelligence and the internet of things present enormous opportunities for companies to improve their businesses by automatically capturing data and analyzing it, hence enabling them to gain a better understanding of their customers and make better business decisions. Consumer behavior is one of the essential information that companies use to their advantage. According to Uzialko (2018, par.2), companies regularly capture, store data from their consumer base every day, then proceed to perform predictive analytics and analyze consumer behavior. There are companies such as Oracle and Sigma Data Systems that have built their entire business model around consumer data. There are three ways to collect consumer information. The first one is by directly asking the consumers for such information. The second one is by indirectly asking the consumers for such information, and the third way is by adjoining other sources of consumer data to their own. The most efficient businesses employ or three in collecting consumer information.

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The information collected from consumer data collected is used to build a customer profile or which then reveals consumer behavior. Companies use the information on consumer behavior to generate an advertisement that targets specific consumers depending on their profile. Such kinds of adverts are usually hyper-personalized and unique to specific devices. Therefore, business students need to identify and understand consumer choice, the factors affecting it, market research, and marketing mix as the fundamental pieces of buyer and consumer behavior.

Understanding Consumer Choice and Factors Affecting It

Consumer choice or consumer preference refers to the decisions made by consumers regarding the purchase of products and services. Consumer choices have specific characteristics that make them predictable to businesses looking to sell their products or services. Consumer behavior, which is there determinant of what consumers buy and the things they decide to forego mainly affect consumer choice. Scholars and business leaders have weighed in on the concept of consumer choice with varying degrees of success. There are quite a few theories in the consumer buying process that try to explain the patterns of consumer behavior and the factors that affect it.

Characteristics of Consumer Choices

The price influences the choice of the brand at the time of purchase. According to Casielles and Alvarez (2007, p.122), it seems intuitively reasonable to consider prices as a factor that decreases the uncertainty associated with purchasing. That is especially the case for products that are not well known to the customer or the products that the customer is doubtful about their authenticity. However, price is not the only stimulus that consumers or buyers respond to. Some theories try to explain how a buyer would form an idea of the price he or she expects to pay for a service or a product. These theories suggest that the price range of the customers' find at the time of purchase and the amount they pay for the product or service influences their later purchases (Casielles and Alvarez, 2007, p.122). That shows that consumers adapt to product prices, their fluctuations, and behave accordingly.

Another trait in customer choices is loyalty. Brand loyalty is the tendency of some consumers to continue buying a specific product or a service regardless of the actions of the competition to their preferred brand. There are many instances of brand loyalty in the real world. For example, Apple is one of the companies that enjoy a high measure of brand loyalty that has propelled the company to become of the most valuable companies in the world. Loyal consumers may respond with more intensity to gains than to losses since consumers continue to buy them when the price of frequently purchased products goes up. (Casielles and Alvarez, 2007, p.124). On the other hand, when the reverse happens, they see an opportunity and purchase a larger quantity of the product. As a result, the company can compensate for low-profit margins with an increased number of sales.

Another feature of consumer choice that gets significantly less attention than it deserves is the consumption level. According to Casielles and Alvarez (2007, p.124), the relationship between brand choice and consumer choice has attracted little attention despite some scholars focusing on it. Households that have a high consumption of a specified category of products will display different purchasing behavior to households with low levels of consumption. The thing is, when a specific household regularly consumes a particular product or consumes a larger quantity of a particular product, they may be more concerned about the price of the product compared to a house that consumes less amount of the product. An example of such a case is a comparison of SUV drivers to saloon cars driver's reaction to fuel prices. SUV drivers are more likely to react to fuel prices than saloon car drivers because the SUV drivers have a higher fuel consumption as compared to saloon car drivers.

Contemporary Behavior

The 21st-century individual is predominantly seen as a consumer. The advancement of science and technology has resulted in new consumer behavior patterns that are achieving a new role in modern society. According to Firat and Dholakia (2006, p. 123), the contemporary human society is characterized by high dynamism which can be viewed through a turbulent development of science and technology and fundamental cultural changes. The dynamic and continuous development of science and technology has created new services, products, business systems, work, interpersonal communications, and lifestyles. These advancements powerfully influence and generate cultural changes while being influenced by the same.

The modern customer is essentially an active participant in market exchange. They are now absolute rulers that dictate technological progress, innovation, political changes, and events. The modern consumer has changed the way they create, maintain, and even end relationships. The location of the consumer influences a good part of contemporary behavior. Despite the rise of globalization, different regions of the world still display different forms of consumer behavior. For example, in market economies, the consumer behavior is connected to company behavior which has led social critics to argue that every company has the type of consumers it deserves (Brinkmann, and Peattie, 2008, p.22).On the other hand, globalization has created new social relations and networks that transverse borders and oceans. In order to understand contemporary behavior, one must follow six groups of factors, which include: technological, demographic, socio-cultural, political, legal, and economic factors.

Theories in Consumer Buying Process

According to behavioural decision theorists, there are numerous instances when consumers make irrational choices. The work of such scholars has challenged predictions from economic theory and assumption about rationality hence leading to the development of the field of behavioural economics (Stankevich, 2019, p.10). One of the critical decision-making theories proposed by researchers in the generic theory of buying behavior. According to the theory, a consumer's decision-making process occurs in a five-stage process, as repres...