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Coursework title: Individual Assignment

2. Subject Code: MBAPML102

3. Subject Name: Basic of Marketing

4. Academic Year: 2018 June Start

5. Student First Name: VINOD

6. Student Last Name: KUMAR JAKHAR

7. Student ID No.: 180755118265

8. Student’s personal Email ID: vinod4dubai@gmail.com

Explain 5 steps of buyer decision process in detail?

5 STEPS OF BUYER DECISION PROCESS

Consumer buying process consists of sequential steps the consumer follows to arrive at the final
buying decisions. Mostly, consumers follow a typical buying process.

According to Philip Kotler, the typical buying process involves five stages the consumer passes
through described as under:

STEP 1. Problem Identification:

This step is also known as recognizing of unmet need. The need is a source or force of buying
behaviour. Buying problem arises only when there is unmet need or problem is recognized. Need
or problem impels an individual to act or to buy the product.

The consumer develops a need or a want that they want to be satisfied. The consumer feel like
something is missing and needs to address it to get back to feeling normal. If you can determine
when your target demographic develops these needs or wants, it would be an ideal time to
advertise to them. For example, they ran out of toothpaste and now they need to go to the store
and get more.

STEP 2. Information Search:

Interested consumer will try to seek information. Now, he will read newspapers and magazines,
watch television, visit showroom or dealer, contact salesman, discuss with friends and relatives,
and try all the possible sources of information.

Mostly, the consumer can try one or more of following sources of information:

i. Personal Sources: They may include family members, friends, package, colleagues, and
relatives.

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 ii. Commercial Sources: Advertising, salesmen, dealers, package, trade show, display, and
exhibition are dominant commercial sources.

iii. Public Sources: Mass media (radio, TV, newspapers, magazines, cinema, etc.),
consumer- rating agencies, etc., are main public sources.

iv. Experimental Sources: They include handling, examining, testing, or using the product.
Selection of sources depends upon personal characteristics, types of products, and capacity and
reliability of sources. Each information source performs different functions in influencing buying
decision. By gathering information from relevant sources, the consumer can learn about different
products and brands available in the market.

STEP 3. Evaluation of Alternatives:

In the former stage, the consumer has collected information about certain brands. Now, he
undergoes evaluation of brands. He cannot buy all of them. Normally, he selects the best one,
the brand that offers maximum satisfaction. Here, he evaluates competitive brands to judge
which one is the best, the most attractive. Evaluation calls for evaluating various alternatives with
certain choice criteria.

i. Benefits offered by the brands

ii. Qualities, features or attributes, and performance

iii. Price changed by various brands

iv. History of brands

v. Popularity, image or reputation of brands

vi. Product-related services offered by the brands, such as after-sales services, warrantee,
and free installation

vii. Availability of brands and dealer rating.

Different criteria are used for different products.

STEP 4. Purchase Decision:

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This is the stage when the consumer prefers one, the most promising band, out of several brands.
The former stage helps consumers evaluate various brands in the choice set. The brand that
offers maximum benefits or satisfaction is preferred.

Now, consumer makes up his mind to purchase the most preferred brand. However, three factors
further affect whether buying intension result into actual purchase.

The first factor is attitudes of others. The impact of other persons’ attitudes depends on degree
of their negative attitudes toward the consumer’s preferred brand, and consumer’s degree of
compliance with other persons’ wishes.

The second factor is unanticipated situational factors. Purchase intension may change due to
certain unanticipated situational factors like price hike, loss of job, family income, major medical
expenses, non-availability of the preferred brand, or such similar factors.

The third factor is consumer’s perceived risk. Degree of risk depends on price, attribute
uncertainty, entry of a new superior product, and his self-confidence.

Sub-decisions in Purchase Decision:

Consumer’s buying decision involves following five sub-decisions:

i. Brand Decision: For example, CBZ (model) motorbike of Hero Honda.

ii. Vender Decision: For example, ABC or XYZ Hero Honda Showroom.

iii. Quantity Decision: For example, one motorbike.

iv. Timing Decision: For example, on 1st APRIL, 2019.

v. Payment Decision: For example, by cash or finance.

STEP 5. Post-purchase Decisions:

Every winning sales strategy since the dawn of commerce has accounted for repeat business. It
all comes back to customer satisfaction. How satisfied a consumer is with a product or service

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depends directly on how he or she evaluates the experience according to their original needs. Is
the new camera as user-friendly for beginners as the marketing suggested?

If the customer is satisfied with the purchase, he or she will remember the experience and the
retailer or brand when a similar need arises, which is the dictionary definition of brand loyalty.

However, if the customer believes the purchase to be a disappointment, he or she will repeat the
five stages exactly as before with one notable exception—the disappointing brand or retailer will
be absent from his or her decision-making process.

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Define the term consumer behaviour and its characteristics?

CONSUMER BEHAVIOR
Consumer Behavior is the study of when, why, how and where people do or do not buy a product.
It basically depends on the psychology of the consumer. It attempts to understand the buyer
decision making process both individually & in groups. It studies the individual consumers such
as demographics & behavioral aspects to understand the people’s wants.

In the study of Consumer Behaviour main focus is the customer satisfaction because customer is the only
person with whose presence businesses actually exists.

Consumer: According to International Dictionary of Management “Consumer is a purchaser of

goods and services for immediate use or consumption”.
Buyer: He is the person who purchase goods either for resale or for use in production or for use
of somebody else.
Customer: He is the one who purchases goods for his own use or for the use of others or else he
is regular customer of a particular product and he is a regular customer of particular shop.
Institutional buyer: These are either govt. institutions or private organizations.

CHARACTERISTICS OF CONSUMER BEHAVIOUR

i) Information Search: The search for information is a common characteristic of

consumer behaviour. Consumers cannot purchase goods and services if they are
unaware that a good or service exists. When a consumer decides to buy a certain item,
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 his decision must be based on the information he has gathered about what products
or services are available to fulfill his needs. There might be a product available that
would be better suited to the consumer's needs, but if he is unaware of the product,
he will not buy it. Consumers gather information in many ways. Advertisements and
word-of-mouth are common ways consumers find information. A consumer with
Internet access can search for reviews of products and product alternatives, which
may make him more informed and better able to make decisions.
ii) Brand Loyalty: Brand loyalty is another characteristic of consumer behavior. Brand
loyalty is the tendency of a consumer to buy products or services from a certain
company that she likes or equates with having high quality goods and services.
Example- if her first car was a Honda as a teenager and the car lasted 200,000 miles,
she might have a tendency to buy Hondas in the future due to her previously positive
experience. This brand loyalty may be so strong that she forgoes the information
search all together when considering her next vehicle. An information search takes
time and effort; brand loyalty is a way consumer avoid the time and effort involved in
an information search.
iii) Price Elasticity of Demand: Price elasticity of demand is an economic concept and an
important characteristic of consumer behaviour. The price elasticity of demand is the
change in consumption that an individual makes due to a change in the price of a
certain product. The consumption of products with high elasticity of demand will fall
sharply with an increase in price.
Example- if the price of a luxury, such as baseball tickets, rose 30 percent, consumers
might stop buying baseball tickets and buy more movie or basketball tickets as a
substitute. If consumer demand shifted in this way, baseball tickets could be said to
have high elasticity of demand, since consumers will shift their preferences greatly as
price changes. Items with low elasticity of demand, or inelastic goods, are those that
consumers tend to buy regardless of price. Goods such as gasoline, milk and other
essentials tend to be inelastic. Gas might go up in price by 30 percent, but consumers
may still buy it in the same quantity since many people rely on gas for commuting and
other essential transportation.

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Reference’s:
 Marketing Management E.14th by Philip T. Kotler, Kevin Lane Keller
 Singhania University-MBA Text Book, E.2017, Basic of Marketing
 Consumer Behavior: Buying, Having, and Being E.12th by Michael R. Solomon
 https://www.scribd.com

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