POM: Session 9 Consumer Buying

Buying Decision Making Process

Consumer buying process is highly affected by two factors: the psychology behind purchase and the monetary value of product. The consumer decision making process is the combination of all experiences that an individual comes across in learning, choosing, using and even disposal of a product. The buyer decision process consists of five stages: 

1. Need recognition
2. Information search 
3. Evaluation of alternatives
4. Purchase decision
5. Post purchase behaviour

Stage I: Need Recognition

The buyer recognizes a problem or need. The need can be triggered by either internal stimuli or external stimuli. Internal stimuli are needs are individual’s own needs. They may arouse due to some problem to which individuals seek solution, for example a hungry person will look for some food. Need may also arise as a result of some new events in life, like first day of school/college, parties, weddings, festivals. External stimuli are the marketer’s efforts to generate needs for product and service through advertisements, offers and discounts.

Stage II: Information Search

After the consumer is motivated to purchase a product, he or she looks for information about the products that can satisfy the need.

Consumers can obtain information from any of several sources. 

• Personal sources (family, friends, neighbors, acquaintances)
• Commercial sources (advertising, salespeople, Web sites dealers, packaging, displays)
• Public sources (mass media, consumer‑rating organizations, Internet searches)
• Experiential sources (handling, examining, using the product)

The information received is comprehended by individuals in accordance with their need, exposure and experiences. How individual assimilates and understands the information, is influence by individual’s perception.

Stage III: Evaluation of Alternatives

Consumers evaluate the brand on several parameters depending upon the individual consumer and the specific buying situation. In some cases, consumers use careful calculations and logical thinking. At other times, the same consumers do little or no evaluating; instead they buy on impulse and rely on intuition. Most of the purchases are influenced by consumer’s predispositions about the product. For some brands consumers have favourable opinion and for some unfavourable. The number of brands that a consumer is aware of is termed as awareness set. Awareness set is made of:

• Evoked set – those brands the consumer is willing to consider
• Inept set – those brands the consumer finds completely unworthy of further consideration
• Inert set – those brands of which the consumer is aware, but to which he/ she is basically indifferent

Thus consumer attitudes and beliefs about different products and brands are predominant at this stage.

Stage IV: Purchase Decision

Generally, the consumer’s purchase decision will be to buy the most preferred brand. This has however, some exceptions. Final decision may be the result of careful analysis or the consumer may follow some simple decision rules.

Heuristics or Rule of thumb: Following heuristics is an informal approach to decision making where clues from the marketers help consumer decide. These clues may be packaging, promotional offer or price discounts. For big brands and known brands (based on experience and knowledge) considered to be good and safe decisions as rule of thumb.

Compensatory Vs Non-compensatory: It is formal approach and applicable when a product purchase requires evaluation of number of attributes. The consumer evaluates these attributes in terms of their importance. Some attributes are non-compensatory, for example for a student seeking admission in college a particular city may be non-compensatory and he would evaluate all other factors keeping city constant. Some other attributes are compensatory in nature and can be compromised if other strong attributes are matching.

Also there are other factors that can come between the purchase intention and the purchase decision. 

• Attitudes of others. 
• Unexpected situational factors. 

 Stage V: Post Purchase Behaviour

The difference between the consumer’s expectations and the perceived performance of the good purchased determines how satisfied the consumer is. If the product falls short of expectations, the consumer is disappointed; if it meets expectations, the consumer is satisfied; if it exceeds expectations, the consumer is said to be delighted.

Cognitive dissonance, or discomfort caused by postpurchase conflict, occurs in most major purchases.

Types of Buying Decision Behaviour

Complex Buying Behaviour

Consumers undertake complex buying behaviour when they are highly involved in a purchase and perceive significant differences among brands. Consumers may be highly involved when the product is expensive, risky, purchased infrequently, and highly self-expressive. Typically, the consumer has much to learn about the product category. 

Marketers of high-involvement products must understand the information-gathering and evaluation behaviour of high-involvement consumers.

Dissonance-Reducing Buying Behaviour

Dissonance-reducing buying behaviour occurs when consumers are highly involved with an expensive, infrequent, or risky purchase, but see little difference among brands. After the purchase, consumers might experience postpurchase dissonance (after-sale discomfort) when they notice certain disadvantages of the purchased brand or hear favourable things about brands not purchased.

To counter such dissonance, the marketer’s after-sale communications should provide evidence and support to help consumers feel good about their brand choices.

Habitual Buying Behaviour

Habitual buying behaviour occurs under conditions of low consumer involvement and little significant brand difference. Consumer behaviour does not pass through the usual belief-attitude-behaviour sequence. Consumers do not search extensively for information about the brands, evaluate brand characteristics, and make weighty decisions about which brands to buy. They passively receive information as they watch television or read magazines.

Because buyers are not highly committed to any brands, marketers of low-involvement products with few brand differences often use price and sales promotions to stimulate product trial.

Variety-Seeking Buying Behaviour

Consumers undertake variety-seeking buying behaviour in situations characterized by low consumer involvement but significant perceived brand differences. In such cases, consumers often do a lot of brand switching.

The Buyer Decision Process for New Products 

A new product is a good, service, or idea that is perceived by some potential customers as new. 

The adoption process is the mental process through which an individual passes from first learning about an innovation to final adoption. Adoption is the decision by an individual to become a regular user of the product.

Stages in the Adoption Process

Consumers go through five stages in the process of adopting a new product:

• Awareness: The consumer becomes aware of the new product, but lacks information about it.
• Interest: The consumer seeks information about the new product.
• Evaluation: The consumer considers whether trying the new product makes sense.
• Trial: The consumer tries the new product on a small scale to improve his or her estimate of its value.
• Adoption: The consumer decides to make full and regular use of the new product.

Individual Differences in Innovativeness

People differ greatly in their readiness to try new products. People can be classified into the adopter categories as:

The five adopter groups have differing values. 

1.   Innovators: These type of consumers are venturesome. They are the people usually high on resources and hence like to experiment. They try new ideas at some risk. These consumers are against brand loyalty.

2.     Early adopters: These consumer are guided by respect. These consumers usually try a product earlier than many people. They are opinion leaders in their communities and adopt new ideas early but carefully. 

3.     The early majority: These are deliberate users. They usually adopt new ideas before the average person. 

4.     The late majority: They are skeptical and adopt an innovation only after a majority of people have tried it. 

5.  Laggards: They are tradition bound and are suspicious of changes and adopt the innovation only when it has become something of a tradition itself.