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Unit 1 (Buying Decision Process)

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0% found this document useful (0 votes)
43 views

Unit 1 (Buying Decision Process)

Uploaded by

Aayush Giri
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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displaysS, and so

On. Ihe intormation they contain and the reminders


tising or other information they provide of adver
already conveyed outside the store will be prime determinantsS
of consumer decision making. Problem
Memory can often be reconstructive, however, and consumers recognition
may remember an expe-
rience with
a brand differently after the fact due to intervening factors or other events."

:The Buying Decision Process: The Five-Stage Model Information


search
These basic psychological processes play an
important role in understanding how con-
sumers actually make their buying decisions.41 Table 6.7 provides a list of some key con-
sumer behavior questions in terms of "who,
what, and
when, where, how, why."
Smart companies try to fully understand the customers'
buying-decision process-all their
experiences in learning, choosing, using, and even disposing of a product.42 Bissel developed
Evaluation
of alternatives
its Steam n Clean vacuum cleaner based on the
product trial experiences of a PIA
near corporate headquarters in Grand Rapids, Michigan. The result was a namelocal group
change, color-
coded attachments, and an infomercial highlighting its special features.43
Marketing scholars have developed a "stage model" of the buying-decision process (see
Purchase
Figure 6.4). The consumer passes through five stages: problem recognition, information search, decision
evaluation of
alternatives, purchase decision, and postpurchase behavior. Clearly, the buying
process starts
long betore the actual purchase and has consequences long afterward.4
Consumers don't always pass through all five stages in buying a product. They may skip or
reverse some. When you buy your regular brand of toothpaste, you go directly from the need
Postpu:thase
for toothpaste to the purchase decision, skipping information search and evaluation. The benavicr
model in Figure 6.4 provides a good frame of reference, however, because it captures the full
range of considerations that arise when a consumer faces a highly involving new purchase.45
FIG. 6

Problem Recognition
The buying process starts when the buyer recognizes a problem or need triggered by inter Fve-Stage Model ot the Cong
nal or external stimuli. With an internal stimulus, one of the person's normal needs-hunger, Buying Process
ehavior Who buys our product or service?
Who makes the dcision to buy the product?
Who influences the decision to buy the product?
decision made? Who assumes what role?
How is the purchase
What does the customer buy? What needs must be satisfied?
Why do customers buy a particular brand?
Where do they go or look to buy the product or service?
When do they buy? Any seasonality factors?
How is our product perceived by customers?
What are customers' attitudes toward our product?

What social factors might influence the purchase decision?


Do customers' lifestyles influence their decisions?
decision?
How do personal or demographic factors influence the purchase
and Communication Management, 6tth ed
Source Based on ist from George Belch and Michael Belch, Advertising
(Homewood, IL: hvin, 2003).

drive; or a need can be aroused by an


thirst, sex-rises to a threshold level and becomes a
new car or see a
television ad for a
external stimulus. A person may admire a neighbor's
a purchase.
triggers thoughts about the possibility making
of
Hawaiian vacation, which
Marketers need to identify the circumstances that trigger a particular need by gathering
information from a number of c o n s u m e r s . They can
then develop marketing strategies that
such as luxury goods,
trigger consumer Particularly for discretionary purchases
interest.
marketers may need to increase consumer
vacation packages, and entertainment options,
consideration.
motivation so a potential purchase gets serious

Information Search
have
Surprisingly, often search for limited amounts of information. Surveys
consumers
look at only one store, and only 30% look at
shown that for durables, half of all consumers
between two levels of involvement
We can distinguish
more than one brand of appliances.
with search. The milder search state is called heightened attention. At this level a person sim
information about a product. At the next level, the person
ply becomes more receptive to
search: looking for reading material, phoning friends, going
may enter an active information
about the product.
online, and visiting stores to learn

Majorinformation sourcesto which consumers will turnfali


into
INFORMATION SOURCES
four groups:
Personal. Family, friends, neighbors, acquaintances
Commercial. Advertising, Web sites, salespersons, dealers, packaging, displays
Public. Mass media, consumer-rating organizations
Experiential. Handling, examining, using the product
and the
The relative amount and influence of these vary with the product category
sources

characteristics. Generally speaking, the consumer receives the most information about
abuyer's
product from commercial-marketer-dominated-sources. However, the most effective infor
authorities.
mation often comes from personal sources or public sources that are independent
Each information source performs a different function in influencing the buying deCl
sion. Commercial sources normally perform an information function, whereas personal
sources perform a evaluation function. For example, physicians often learn
legitimizing or
of new drugs from commercial sources but turn to other doctors for evaluations.
ANALYZING CONSUMER MA

Total Set
Awareness Set
Consideration Set Choice Set Decision
Apple Apple
Dell Dell Apple Apple
Hewlett-Packard Dell
Toshiba
Hewlet-Packard Toshiba
Dell
Toshiba
Compaq Compaq
NEC

SEARCH DYNAMICS Through


ing brands and their features. The first gathering information,
the consumer learns about
to the consumer. The individual
box in Figure 6.5 shows the
total set of brandscompet-
consumer will come to know
the awareness set. Some brands, the
available
only a subset of these brands,
consumer gathers more information, consideration set, will meet initial
buying criteria. As the
The consumer makes a final choice only a few, the choice
set, will remain strong contenders.
from this set. 46
Marketers need to identify the
hierarchy of attributes that guide consumer decision mak-
ing in order to understand different
formed. This process of identifying thecompetitive forces and how these various sets get
most car buyers first decided on the hierarchy is called market partitioning. Years ago,
manufacturer and then on one of its car divisions
(brand-dominant hierarchy). A buyer might favor General Motors cars and, within this set,
Pontiac. Today, many buyers decide first on the
nation from which they want to buy a car
(nation-dominant hierarchy). Buyers may first decide they want to buy a
Toyota, and then the Corolla model of Toyota. Japanese car, then
The hierarchy of attributes also can
reveal customer segments.
on price are price dominant; those Buyers who first decide
who first decide on the type of car
station wagon) (sports, passenger,
type dominant; those who first decide on the car brand are brand dom-
are
inant.
Type/price/brand-dominant consumers make up a segment; quality/service/type
buyers make up another. Each segment may have distinct demographics,
psychographics,
and mediagraphics and different awareness, consideration, and choice sets.47
Figure 6.5 makes it clear that a company must strategize to get its brand into the
prospect's awareness, consideration, and choice sets. If a food store owner arranges yogurt
first by brand and then by flavor within each brand, consumers will tend to select their fla-
vors from the same brand. However, if all the strawberry yogurts are together, then all the
vanilla and so forth, consumers will probably choose which flavors they want first, and then
choose the brand name they want for that particular flavor.
The company must also identify the other brands in the consumer's choice set so that it can
plan the appropriate competitive appeals. In addition, the company should identify the con-
Sumers information sources and evaluate their relative importance. Asking consumers how they
first heard about the brand, what information came later, and the relative importance of the dif-
ferent sources will help the company prepare effective communications for the target market.

Evaluation of Alternatives
How does ihe consumer process competitive brand information and make a final value
judgment? No single process is used by all consumers, or by one consumer in all buying
Situations. There are several processes, and the most current models see the consumer
on a conscious and rational basis.
1orming judgments largely
Some basic concepts will help us understand consumer evaluation processes: First, the

is trying to satisfy a need.


Second, looking for certain benefits
the consumer is
Consumer
from the product solution. Third, the consumer Sees each product as a bundle of attributes
with varying abilities for delivering the benefits sought to satisly this need. The attributes of
example:
nterest to buyers vary by product-for
cleanliness, atmosphere, price
Hotels-Location,
2. Mouthwash-Color, effectiveness, germ-killing capacity, taste/lavor, price
3. Tires-Safety, tread life, ride quality, price
Purchase Decision
In the evaluation stage, the consumer forms preferences
among the brands in the ch.
set. The consumer also form intention to buy the most preferred brand. In
may an
ing a purchase intention, the consumer may make up to five subdecisions: eve
A). dealer (dealer 2), brand (h
quantity (one computer), timing (weekend), and payment
(credit card). meth.

NONCOMPENSATORY MODELS OF CONSUMER CHOICE The


isa
compensatory model, in that perceived good things for a expectancy-value moda
product
perceived bad things. But consumers often take "mental shortcuts" can help to overcoma
heuristics. Heuristics are
using
rules of thumb or mental shortcuts in the simplifying choico
With decision process.
noncompensatory models of consumer choice, positive and negative
siderations don't necessarily net out. attribute
easier for a consumer, but it also Evaluating attributes in isolation makes decision con
increases the likelihood that she would have making
choice if she had deliberated in made a different
greater detail. We highlight three such choice
1. With the heuristics here.
conjunctive heuristic, the consumer sets a minimum
first alternative that meetS the acceptable cutoff level for
each attribute and chooses the
attributes. For example, if Linda decided all minimum standard for all
choose computer B. attributes had to rate at least a 5, she would
2. With the
lexicographic heuristic, the consumer chooses the best brand
perceived most important attribute. With this decision on the basis of its
3. With the rule, Linda would choose
selected elimination-by-aspects heuristic, the consumer compares brands on computerC.
to its probabilistically-where the probability of
choosing an attribute is
an attribute

importance-and eliminates brands that do not meet


minimum
positivelyrelated
Our brand or
product acceptable cutos.
sure involved, and knowledge, number and similarity of brand
the
the social context
(such as the need for choices and time pres*
affect whether and how we justification to a peer or boss) all
Consumers don't
use choice
heuristics.54 ma
necessarily use only one type of choice rule.
phased decision strategy that combines two or Sometimes, they adopla
more. For
pensatory decision rule such as the conjunctive heuristic example,
to reduce
they the number
might of bralm
use a nonc
choices to a more
manageable number, and
for the
runaway success of the Intel Inside then evaluate the remaiing brands. One redsson
the first cutoff for
many
campaign in the 1990s was that it made the and
Intel
microprocessor. consumers-they would only buy a personal
Personal
Diauan
choice but to computer makers, such as IBM, Dell, computer that nau
support Intel's marketing efforts. and Gateway, naud no
uy miuenced by these EvaiuatiOn Or
evaluations.
alternatives
The second factor is
that may erupt to unanticipated situational factors
change the
might lose her job, Some other purchase intention. Linda
purchase might become more urgent, or a store
may turn her oft. Preferences and
even purchase intentions are not salespersOr
dictors of purchase behavior. completely reliable pre
A consumer'sdecision to modify,
intluenced by perceived risk.57 postpone, or avoid a purchase decision is
Consumers heaviy
consuming a product: may perceive many types of risk in buying and

1. Punctional risk-The product does not


2. perform up
Physical risk-The product poses a threat expectations.
to

or others. to the physical well-being or health of the user


3. Financial risk--The product is not worth
the price paid.
4. Social risk-The product results in
embarrassment from others.
5. Psychological risk-The product affects the mental well-being of the use.
6. Timerisk-The failure of the
product results in an opportunity cost of finding another sat
isfactory product.
The amount of
perceived risk varies with the amount of money at stake, the amount or
attribute uncertainty, and the
amount of consumer self-confidence. Consumers
routines for reducing the develop
uncertainty
avoidance, information gathering from
and negative consequences of risk, such as decision
and warranties. Marketers must
friends, and preferences for national brand names
understand the factors that provoke a feeling of risk in
consumers and provide information and
support to reduce perceived risk.

Postpurchase Behavior
After the purchase, the consumer
might experience dissonance that stems from noticing certain
disquieting features or hearing favorable things about other brands and will be alert to informa-
tion that supports his or her decision.
Marketing communications should supply beliefs and
evaluations that reinforce the consumers choice and help him feel
The marketer's job therefore doesn't end with the
good about the brand.
purchase. Marketers must monitor
postpurchase satisfaction, postpurchase actions, and postpurchase product uses.
POSTPURCHASE SATISFACTION Satisfaction is a
tations and the
function of the closeness between expec-
product's perceived performance.58 If performance falls short of expecta-
tions, the consumer is disappointed; if it meets expectations, the consumer
is satisfied; if it
exceeds expectations, the consumer is delighted. These
the customer buys the product again and talkS
feelings make a difference in whether
favorably or unfavorably about it to others.
The larger the gap between expectations and
performance, the greater the dissatisfaction.
Here the consumer's coping style comes into play. Some consumers
magnify the gap when the
product isn't perfect
and are highly dissatistied; others minimize it and are less dissatisfied.9
VITH CUSTOME
VVIT CUSTOMERS
MERS

POSTPURCHASE ACTIONS s satisfied,


o n s u m e r is
If the cconsumer she is m o r e likely
to
chase the
purchase the
product again.
Product again. The NS
Th satisfied customer will also tend >a to say good things about the brand tto
Others. On the ae
Oners. n e d custom
the other hand, lon or return the product. They
dissatisfied consumers may abanuo
may seek information that confirms its by complain.
to the compan high value. They may take public action
ng rO BOing to a lawyer, or complaining to other groups (such
as business, prË.

vernment
(exit option) or
agencies). Private actions include deciding to stop buying tne product
Chapter
warning friends (voice option).
5 described designed to build long-term
brand
brand loyalty.
loyalty
Postpurchase
Post
Postpurchase e CRM programs
communications to
a s e communications to buvers have heen shown to result in fewer product returns
cancellations. Computerbuyers
and order have been
snow can
comnanies. for example, n send
send aa letter
letter tO
to new
new oners
congratulating them showing
ads showing
owners
satistied
on
having selected a fine They can place ads satisfied
brand owners. computer.
They can solicit customer suggestions for improvements and list the
and Iist location of
the location of
avdilddie services. They can write intellioible instruction booklets. They can send
send owners aa
oWners
dgazlne containing articles describing new computer applications. In adaltol, uey an
provide good channels for speedy redress of
customer grievances.
POSTPURCHASE USE AND DISPOSAL Marketers should also monitor how buyers use
aispose of the product (Figure 6.7). A and
kev driver of sales frequency is product Consumplon
le ne more quickly buyers consume a product, the sooner they may be back in the mar-
ket to repurchase it.
One
opportunity to increase frequency of product use occurs when consumers percepuons
or their
usage differ fromn reality. Consumers may fail to replace products with relatively short ife
Spans sOon enough because they overestimate its product life.61 One strategy to speed up replace
ment is to tie the act of
replacing the product to a certain holiday, event, or time of year.
For example, Oral B has run toothbrush promotions tied in with the springtime switch to
daylight savings time. Another strategy is to provide consumers with better information
about either: (1) when they first used the product or need to replace it or (2) its current level
of performance. Batteries have built-in gauges that show how much power they have left:
toothbrushes have color indicators to indicate when the bristles are worn; and so on. Perhaps
the simplest way to increase usage is to learn when actual usage is less than recommended
and persuade customers of the merits of more regular usage, overcoming potential hurdles.
If consumers throw the product away, the marketer needs to know how they dispose of
it, especially if-like batteries, beverage containers, electronic equipment, and disposable
diaperS-it can damage the environment.
"Marketing Memo: Rural Consumer Behavior" highlights some typicalities of consumer
situation and behavior in the rural context.

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