Buying Decision Process 250112

8/2/2019 Buying Decision Process 250112

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Consumer Purchase

Decision Process


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Points to be considered

What is to be purchased?

What is the objective to purchase?

Who is purchasing?

How is the product purchased?

On what occasion, is the productpurchased?


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Buying Decision Process

It involves three distinct elements

The buying roles within thedecision making unit

The type of buying behaviour

Understanding the buying decisionprocess


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The John Dewey model outlined the

following five stages of decision-making

A difficulty is felt

The difficulty is located and defined

Possible solutions are suggested

Consequences are considered

A solution is accepted


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Problem Recognition

Information search

Evaluation of alternatives

Purchase decision

Post-purchase behaviour


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Problem or Need Recognition

The buying process starts when the buyerrecognises a problem or need.

Need becomes apparent when there is adivergence of the desired and actual states.

The motivation that arises from this dependson the level of disparity between theactual

stateand thedesired state


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Causes of shift of theactual state

Assortment depletion: This involvesconsumption, spoilage or wear and tear on

the stock of goods or products within the

individual's assortment.

Income change: This can be upwards,

through a salary increase or vice versa.


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New information may change the

individual's aspirations.

Changing desire is often brought on by a

change in actual state

The psychology of complication says that

people complicate their lives deliberately

by seeking new products, even thoughthey are fairly satisfied with the old one


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Information Search

Two sources:

Internal search from memory

External search from outside sources

Usually consumers will continue to search

until they find something that is adequate to

meet the need, and will then not look anyfurther.


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Impulse purchase could be subdivided

into categories:

Pure impulse: Based on the novelty of aproduct

Reminder impulse: Relates to a product,

which has been left off the shopping list Planned impulse: It occurs when the

customer has gone out to buy a specific type

of product, but is prepared to be swayed byspecial offers


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The psychological costs of the information

search include frustration, driving, chasing

around to different shops, talking to shopassistants, and generally giving a lot of

thinking time to the search.

Situational factors will also affect theproduct information search.

Consumer characteristics are those

features of the consumer, which affect theinformation search

Time is a cost relating to search.

A d ill b i li d t h


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An aroused consumer will be inclined to search

for more information. An individual passes

through two stages of information search

Heightened attention stage: In this first

stage, buyers undertake a milder search

where s/he simply becomes more receptiveto information about a product.

Active information search:In this second

stage, the buyer looks for reading material,phoning friends and visiting stores to learn

more about the product


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An individual gets information from the

following four sources

Personal Sources: family, friends,

neighbours, acquaintances

Commercial Sources: Advertising, sales

persons, dealers displays, packaging,

displays

Public Sources: Mass media, consumer-rating organisations

Experiential Sources:Handling, examining

and using the product


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Evaluation of Alternatives

The first procedure is to establish aconsideration set, which is the group ofproducts from which the final choice is to bemade.

Consumers construct the consideration setfrom the knowledge obtained in theinformation search.

Finally, consumers will often select adecisionrule orheuristic


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Purchase Decision

In the evaluation stage, the consumer

forms preferences among the brands in

the choice set


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What influences

Consumer Purchase

Decision ?


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An Examination

of

Internal Influences


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Factors Influencing Purchase decision

Social factors

Cultural factors

Economic factors Personal factors

Environment factors Internal or Psychological factors


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The Consumer Purchase Process

Post-PurchaseEvaluation

PurchaseDecision

Evaluationof

Alternatives

Information

Seeking

ProblemRecognition

Marketing Factors

Product

Price

Place

Promotion

Purchase Process

Personal & Environmental

Factors

Psychological

Cultural

Social

Personal


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Social factors

Family

Reference Groups

Roles and status

Cultural factors

Culture

Sub culture Social class


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Economic factors

Personal Income

Family income

Income expectations

Savings

Liquid assets of the Consumer

Consumer credit


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Personal factors Age

Occupation Income

Life Style

Environment factors Physical surroundings

Social surroundings

Time

Task


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Internal or Psychological factors

Motivation

Perception Learning

Beliefs and Attitude

Goals Personality

Roles

Self-concept Risk and uncertainty


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Four Types of Perceived Risk (Contd )


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Four Types of Perceived Risk (Contd.)

3) Physical Risk:Requires physical vigour, health and vitality

Applicable for products like medicines, foods,beverages, mechanical or electrical goods; e.g. spicydish, wine, vehicles, flammables

Associated with elderly, frail, ill health orhandicapped people

4) Psycho-Social Risk:Involves socialisation needs, affiliations and status

Applicable for socially visible, symbolic, prestige orluxury goods; e.g. designer clothes, jewellery, fashionaccessories, sports car

Associated with self-conscious people of high socialstatus or who always want to be at cynosure

Consumer Purchase Decision Process Model


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Consumer Purchase Decision Process Model

Final Choice Decisions

Need/Problem

recognition

Search for relevant

information

Evaluation of

alternatives

Purchase

Post-purchase use

and re-evaluation

Replacing old 14 B/W TV

by 21 CTV having 100 channels

Ex.

Ads, friends, relatives, visits to

showrooms, manuals etc.

Comparing various featuresand Brands

Ex.

Ex.

Final selection of a brand

with certain features

Ex.

C D i i P d R l t


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Consumer Decision Process and Relevant

Internal Psychological Processes

Problem Recognition

Information Search

Alternative Evaluation

Purchase Decision

Post purchase Evaluation

Motivation

Perception

Attitude Formation

Integration

Learning

Decision Process Stages Psychological Processes


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Actual state vs. Ideal state Need recognition

Out of stock

Dissatisfaction

New needs or wants

Related product purchase

New products

Sources of Need/Problem Recognition


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Importance and urgency of need

Perceived risk

Accessibility of information

Socio-cultural and Demographiccharacteristics

Individual and Psychographic

characteristics Types of problem-solving

Factors influencing Information Search

T f P bl S l i


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Extended Problem Solving: Collection of asmuch information as possible from bothmemory /(internal) and from outside sources(external)

Limited Problem Solving: Not as motivated tosearch for information or to evaluate; fall backon guidelines instead of having to start fromscratch every time a decision is made

Habitual/Routinised Problem Solving: Choicesmade with minimal effort and without

conscious control

Types of Problem Solving


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Low-cost products

Frequent purchasing

Low consumer

involvementFamiliar product class

and brands

Little thought, search, or

time given to purchase

More expensive products

Infrequent purchasing

High consumer

involvementUnfamiliar product class

and brands

Extensive thought, search

or time given to purchase

Habitual Limited Extensive

Buying Behaviour Continuum

Types of Information Search


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Pre-purchase Search:Search for information after aneed has been recognised

Ongoing Search:Enjoy browsing just for the fun orhabit

Internal Search:Scan memory bank to assemble

information[Directed Learning through existingknowledge]

External Search:Gather information from Personalsources, (viz. Friends, relatives, co-workers) Market-

controlled sources, (viz. Ads, salespeople, in-storedisplays) Public sources(viz. Print articles, news reports,

journals, manuals) and personalexperiences (viz.Handling, examining, testing, using)[Incidental Learning

through exposure to external sources]

Types of Information Search

P i


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Perception The process by which an individual receives,

selects, organizes and interprets information The stages in the perception process are:

Sensation

Attending to information

Interpreting information

Responding to information

Evaluative Criteria


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Evaluative Criteria These are the dimensions or attributes of a

product used to compare various alternatives

Criteria mainly are of 2 types that may be used incombination.

Objective criteria: Price, warranty, colour, size

Subjective criteria: Style, appearance, image

The more important the purchase and/or thegreater experience a consumer has with the

product class, the greater the number of criteriabeing used.

The more important the decision, the fewer arethe acceptable alternatives.

Cons mer Attit des


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Consumer Attitudes These are the ways to respond toward an

object in terms of an individuals overallfeelings or evaluation.

Consumers may hold attitudes toward:

Individuals

Brands

Companies

Product categories

Retailers

Advertisements

Media


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Consumer Decision Rules


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Example

For the purchase of CTV, a consumer has

selected the following attributes to be

considered.

i) The picture quality

ii) The sound system

iii) The availability of all the channels

iv) The warranty schemev) The price

vi) The network of servicing centres

Diff t C D i i R l


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Different Consumer Decision Rules

Compensatory:Consumers evaluate brand options

in terms of each relevant attribute and compute aweighted or summated score for each brand thusallowing for trade-offs, so that a weakness in one areacan be compensated for in another.

Non-compensatory:Do not allow consumers tobalance positive evaluations of a brand on oneattribute against a negative evaluation on some otherattribute.

Other: Some other forms of decision-making related

or unrelated to above mentioned rules


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Compensatory Rules

Simple additive: Total scores on all

evaluative criteria for each alternative andthe highest score wins (assuming all criteriaof equal importance)

Weighted additive: Assigning relativeweight to each criterion based on perceived

importance and then multiply the score bythe relative weight to arrive at a weightedscore, sum scores, highest weighted scorewins.

Simple Additive Rule


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S p

Attributes Brand A Brand B Brand C Brand D

i) The picture quality 8 8 7 5

ii) The sound system 7 6 5 5

iii) The availability of 9 9 8 8

all the channels

iv) The warranty scheme 8 6 4 7

v) The price 6 5 6 7

vi) The network of 6 3 2 9

servicing centres

TOTAL SCORES 44 37 32 41

Brand A is the most preferred choice

Weighted Additive Rule


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g

Brand A Brand B Brand C Brand D

Attributes Weightage AS WS AS WS AS WS AS WS

i) The picture quality 1 8 8 8 8 7 7 5 5

ii) The sound system 1 7 7 6 6 5 5 5 5

iii) The availability of 0.5 9 4.5 9 4.5 8 4 8 4

all the channels

iv) The warranty scheme 1 8 8 6 6 4 4 7 7

v) The price 2.5 6 15 5 12.5 6 15 7 17.5

vi) The network of 2 6 12 3 6 2 4 9 18

servicing centres

TOTAL SCORES 54.5 43 39 56.5

AS: Actual Scores WS: Weighted Scores

Brand D is the most preferred choice

Non compensatory Rules


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Non-compensatory Rules

Conjunctive: Accept alternative only if each

criterion equals or exceeds the minimum cutofflevel.

Disjunctive: A product is acceptable only if it

exceeds the minimum level on at least onecriterion

Lexicographic: Rank criterion from most to

least important and choose best alternative on

most important criterion (for tie, the next

important and so on)

Non-Compensatory Rule


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p y

Attributes Brand A Brand B Brand C Brand D

i) The picture quality 8 8 7 5

ii) The sound system 7 6 5 5

iii) The availability of 9 9 8 8

all the channels

iv) The warranty scheme 8 6 4 7

v) The price 6 5 6 7

vi) The network of 6 3 2 9

servicing centres

Conjunctive(At least 6 on every attribute):Brand Ais best

Disjunctive(At least 7 on price):Brand Dis best

Lexicographic(Picture quality is most important, followed by soundquality):Brand Ais best(after tie on picture quality withBrand B)

H b id C bi ti


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Hybrid or Combination or

Constructive decision rule

The Mix of compensatory and non-

compensatory rules combined or

constructed on the spot viz. conjunctive-compensatory, conjunctive-disjunctive,

disjunctive-conjunctive and so on to adapt

to environmental factors


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Phased decision strategy

Using rules in a sequence. For example, the

consumer may use a non-compensatory

cut-off to eliminate products from the

consideration set, and then use a weighted

additive rule to decide between the

remaining products.


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Affect referral

Formation of long-term memory of overallevaluations of all the brands in evoked sets

and retrieval of a 'standard' attitude from

memory at the time of purchase


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ChoicePurchase Situations

Planned Specifically planned

Generally planned

Unplanned


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Marketing Strategies for Planned Purchasing

Understanding buying intention iskey to predicting and potentially

influencing planned behaviour

Properly integrating marketing-mix

variables for ensuring Attention,Interest, Desire and (Purchase) Action


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Unplanned Purchasing Behaviour

Pure impulse:Bought for the sake of novelty

Reminder impulse: Routine purchases albeit

unanticipated

Suggestion impulse:Stimulation ofimmediate need recognition by a notpreviously seen product

Planned impulse:Responding to a specialincentive to buy an item considered in thepast but not selected


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Marketing Strategies for Unplanned Purchasing

POP( Point-of-purchase) displays

Reduced prices

In-store coupons or contests

Multiple-item discounts

Attractive Packaging

In-store demonstrations

Store atmosphere

Well-trained salespeople

Valuable gift on certain amount ofpurchase

Th t t t hi h th '


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The extent to which another person's

attitude reduces one's preferred

alternative depends upon two things Purchase intention is also influenced

by unanticipated situational factors.

A consumer's decision to modify,

postpone or avoid a purchase

decision is heavily influenced by

perceived risk


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Post-Purchase Behaviour

After purchasing the product, the

consumer will experience some level

of satisfaction or dissatisfaction


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Buying Decision Process 250112