Environmental and consumer factors influencing Verizon Wireless purchasing decisions

Verizon Wireless

Environmental Factors

There are a number of environmental factors that go into the decision of not only what wireless provider a customer uses, but what type of plan they will buy. The major external factor is the technology at the heart of wireless. Rapid new product cycles are driving wireless sales, and they can also encourage consumers to buy for specific time frames. Further, the development of technology is such that it will dictate the data needs in particular of customers -- the smartphone has created a tremendous shift in demand for wireless companies. The regulatory environment is also a factor. Telecommunications is heavily regulated, and this will dictate things like the packages and pricing, bandwidth availability and mergers, all factors that contribute to the ways that the company can package products for consumers and influence their decision-making.

Consumers are also influenced by their friends and their families. These influencers can influence both the choice of technology, but also the choice of carrier. The reason a company like Verizon will offer special deals for its customers when contacting other people who are also Verizon customers is because there is value in building entire circles of people into the customer base. Furthermore, when people know others who have generally positive experiences with their wireless provider, the word of mouth can be powerful, and in a highly-concentrated industry can be valuable.

Consumer Factors

Consumption, especially of data, will guide consumers towards certain companies. Each consumer has a consumption pattern, how much data they use, how much they travel and other variables. The company that can create a plan to match up to a consumer's specific needs is more likely to win that consumer's business. So it is important to understand that whether the consumer uses wireless for business or for social reasons, the usage pattern is one of the most important consumer factors. Price/wealth can be another, at least in terms of providing a constraint on one's technology usage in some cases. Many consumers specifically prefer flat rate plans because they would prefer not to have to micromanage their accounts and monitor their usage. So there is a fairly significant consumer preference for wireless that is simple and easy to understand for the consumer.

So consumers are driven primarily by their consumption patterns, the influences of their friends and family, and in some cases by their economic means. There are distinct age-related factors that affect consumer behavior with respect to Verizon -- younger consumers are more voracious consumers of data and they tend to be less price sensitive, because mobile technology is viewed as an essential component of their lives.

Consumer Decision-Making

There are five steps to the consumer decision-making process. The first is the need recognition, which for most people at this point relates to the need for a new phone, giving them an opportunity to get a new plan as well. There are a number of stimuli in the environment that affect decision-making at this point. There will be an information search, which is why Verizon needs to be in the mix at this point, preferably as the first company that is searched. There is then the alternative evaluation, the purchase decision and the post-purchase behavior. Verizon has the ability to influence at all stages, but benefits from being the first company that is examined, since in many cases there is not much to differentiate the different wireless providers' offerings.