The world of business is moving faster day by day. New systems and tools are developed to make it easier and faster to perform financial transactions, breaking the limitations of distance and time. Globalization and the increasing tendency of competitiveness brought-up the desire to innovate and utilize these systems and tools. To maintain existence, businesses are practically forced to expand their services abroad, and in order to survive, businesses must face high level of competition in every industry they exist in.
Along with this need to have and utilize new systems and tools that allow faster economic processes however, we are faced with several issues. These new systems and tools are much easier because in part, they are reducing the complicated security measures and complicated procedures that are previously installed within that system. However, with the reduction of security measures, another concern surfaced. The question of whether or not these new systems and tools are secured and reliable becomes important. Due to this concern, not all people are willing to utilize the new systems, even though they offer faster and more efficient process of business transactions. Companies which depend on the new systems to reduce their operating costs becomes hampered and stalled.
In this paper, we are discussing customers’ perspective regarding these new systems and tools provided for faster business processes. In order to have a specific elaboration, we will choose a specific object, which are the services offers by MoneyGram International Inc.
MoneyGram International Inc.
MoneyGram International Inc is one of the leading money transfer companies in the world. The company offers products and services through series of agents and financial institution customers. Some of its most famous products are the Travelers Express Company Inc, MoneyGram Payment System, etc.
In addition to that, the company engaged in various types of payment and financial services designed to make business easier for customers, like Money Center Express, Money Services Express, eMoney Transfer, MasterCard,
Using these products, customers of the company can make payments and transfer money around the world. The company has a network of professional agents, financial institution customers and branches around the world. In total, the company approximately has 180,000 locations in 190 countries and territories.
Consumer Behavior Theory
The objective of this paper is to understand the factors that generated people’s doubts and fears regarding the use of new systems and tools that will make business transactions become faster and more efficient.
Understanding consumers is an inseparable activity to the brand development strategies mentioned above. Nevertheless, acknowledging the importance of a continuous effort to understand consumers, this chapter will discuss solely on efforts of understanding consumer behavior.
In order to support marketing plans, firms and organizations can improve their designs by understanding issues such as:
The psychology of how consumers select between different alternatives
The psychology of how consumer is influenced by his/her environment
The behavior of consumers while shopping or making other marketing decisions
How limitations in consumer knowledge influence buying decisions
The information generated by these questions is significantly different in different industries and different market environment. Some of the factors that generated these differences are culture, demographic and social stratification, group influences, diffusion of information, beliefs and perception, attitudes and personality, learning and memory. Analysts and observers have identified that one of these factors is customer’s values, whether they are cultural values, religious values, political values, etc.
We need to first discuss several theories regarding consumer behavior and afterwards, we will address how they are involved with the decision of using new financial systems and tools.
Dynamics of Perception
According to theories of consumer behavior, there are three aspects of perception, which are: selection, organization and interpretation. According to this theory, people are varying selective to stimuli that they are familiar with. In other words, people subconsciously categorize the stimuli that they are familiar with, based on held psychological principles. As a result, they will interpret stimuli subjectively, in accordance with their requirements, prospects and experiences. Research have identified two of the most important factors that affected people’s interpretation of stimuli, the first one is customers previous experiences and the second is consumers motives. From these two factors, there are 4 significant perceptions regarding selective perceptions, which are:
Research have proven that people or consumers will most likely or even aggressively search for messages that they find agreeable or messages that they are concerned with. On the contrary, people always try to avoid painful or threatening messages.
Researches also indicated that people have a sensitive unconscious mechanism toward things that meet their interests. On the other hand, people are insensitive toward stimuli that are irrelevant of their needs. In other words, people tend to pay attention to things that meet their interests only.
Intimidating and damaging stimuli will be less perceived that neutral stimuli.
Research have also shown that people has a capability of screening out information they received by simply ‘tuning out’.
Perceived Services Quality and Satisfaction
In the world of business and marketing, customers’ loyalty is often discussed as the most important goal of marketers or business managers. Despite being discussed by all marketers in the world, only few managed to obtain and sustain then within their organizations. Research and studies revealed that there are two most important factors that affected customers’ loyalty; they are perceived services quality and satisfaction (Bloemer, 1998).
How MoneyGram is Affected by Consumer Behavior Factors
By understanding the basics of human psychology regarding perceptions, we can analyze how MoneyGram’s customers perceive MoneyGram’s services. As elaborated in the Consumers’ Behavior theories, people are unconsciously attracted to stimuli that are meeting their desires and interests, and they are unconsciously blocking stimuli that are irrelevant or harmful to them. Moreover, studies have also revealed that there are two most important determinants of consumers’ loyalty, which are perceived services quality and satisfaction.
In the case of new systems and tools of business transactions brought by MoneyGram, we can conclude that the products and services are harmed mostly by the perceived services quality. The services and products offered by MoneyGram suffered from bad perceived services quality because of the risk within those particular services and the previous bad experiences of people using these services before. The risks that are contained within MoneyGram’s products and services can be understood from the company’s 10 K reports. Some of the risk of MoneyGram’s services is:
Inability to maintain Global Funds Transfer Agent of biller networks
Failure to maintain adequate banking relationship
Failure to overcome security risks
In addition to these risks, there are already many consumers of money transfer companies that are victimized by fraudulent activities. There are already many warnings from the government and companies like MoneyGram s regarding the issues. However, the negative perceived quality services already established quite firmly.
Bloemer, J., K.D. Ruyter, & M. Wetzels. (1998). Linking Perceived Service Quality and Service Loyalty: A Multi-dimensional Perspective. European Journal of Marketing, Vol. 33, No. 11, pp. 1082-1106.
MoneyGram. (2009). Form 10-K MoneyGram International Inc-MGI. Retrieved July 24, 2009 from www.MoneyGram .com
Hallowell, R. (1996). The Relationships of Customer Satisfaction, Customer Loyalty, and Profitability: an empirical study. International Journal of Service Industry Management, Vol. 7, No. 4, pp. 27-42.
Hawkins, Del I., Roger J. Best, and Kenneth A. Coney (1998). Consumer Behavior: Building Marketing Strategy. Boston: McGraw Hill.