Consumers make purchases to satisfy their own needs. Often, they follow a series of steps so that they select the right product or service that will satisfy these needs. Figure 2.1 displays the decision making process that a consumer will follow when making a buying decision.
Need recognition: - before a purchase is initiated, the consumer becomes aware of a need.
Information search: - once the consumer recognizes the need, they will be driven to satisfying that need. However, if the need is unusual or unfamiliar the consumer may seek additional information. In this case, the consumer may seek information from family friends, the media, and sales people or by actually testing the product. If you were considering purchasing a car you might
start to pay attention to car magazines and car advertisements. You might ask friends or family about their experiences with cars and you might visit a showroom to get information from the sales people there. It is only through this information search that you can identify the means of satisfying your need.
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Evaluation of alternatives: - once the information search is complete, the consumer will evaluate the alternatives. Using our example of buying a new car, the consumer may consider price and engine size to be key to their purchase decision. The consumer will evaluate the information gathered to select the car that best meets the price and engine requirements.
Purchase decision: - the consumer makes the purchase. It is important to remember that, until the customer actually buys the product, he can withdraw from the buying process.
Post-purchase evaluation: - once the consumer has purchased the product or service, s/he will evaluate and assess whether the product has met the needs identified at the first stage of the decision making process. This is known as post purchase evaluation. This is an important stage and cannot be ignored by marketers. Remember, marketing is about customer satisfaction.
Cognitive dissonance can occur at this stage of the decision making process. Cognitive dissonance refers to the doubts consumers have after making a purchase. If the consumer is unhappy or dissatisfied, the organization may suffer from damaging word of mouth and the consumer may not buy from the organization again.
During the evaluation of alternatives stage it is important that the marketer understands how consumers evaluate products. By understanding the evaluating process the marketer can take steps to influence it. In the case of cars, advertisements may be changed to provide more detail on price or engine size.
At the purchase decision stage it is important that the marketer does not assume that the consumer will actually buy the product. The consumer can drop out of the decision making stage at anytime. It is important that the consumer receives high levels of service and that information generated during the search stage is confirmed at this stage.
4.8.2 Influences on decision making
Business buying is a professional process, but there are many influences on the organisational purchaser. It would be wrong to assume that the main influence on the decision is price. Figure 4.10 indicates the influences on the organisational purchaser. The market needs to understand these influences in order to satisfy the needs of the organisation and its purchasers.
Environmental factors: - because the buying decision is often strategic, purchasers may be influenced by the state of the economy and economic forecasts. If the products being purchased are in short supply then the purchaser may wish to build a better relationship with the supplying organisation. If the economy is growing and higher levels of demand are forecast, the purchaser may again wish to secure regular sources of supply.
Organisational factors: - most organisations have objectives, structures, procedures and processes that are specific to them. All of these factors impact on the buying decision. The marketer should understand organisational factors because they directly affect how the buying decision is made and who is involved in the decision. For instance, the purchaser maybe the main point of contact for the marketer, but the accountant or managing director may have the power to make the decision.
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Interpersonal factors: - because of the strategic importance of organisational purchasing, there are often many participants in the decision making unit. Table 4.1 displays the roles in the organisational decision making unit. Each of these participants has a direct influence throughout the buying process.
Individual factors: - are influenced by age, income, education, personality, etc. To fully understand the buying process, the marketer needs to understand the participants in the decision making unit and their own personal motivational.
It is also important for the market to understand the importance of the buying decision. If the decision is key to achieving strategic goals, the buying decision may be a lengthy one. However, some decisions, such as stationary buying are much more straightforward. For ease, buying decisions can be classified under three main headings.
Straight rebuying: - products that require little purchasing effort because they are routine purchases. Straightforward re-ordering is often used by the buying organisation. Examples may include; pens, headed paper, business cards.
Modified rebuying: - this occurs when there is a change in the buying organisation's needs. Changes in product specifications may mean the search for a new supplier. This type of buying may originate from straight rebuying situations.
New task: - this involves buying unfamiliar or expensive products such as new computer systems or new machinery. Because of the risk involved the buying processes may be lengthy and involve many people.