Purchase Process & Post Purchase Behavior

Consumer Purchasing Process.

purchase - the acquisition of something for payment; "they closed the purchase with a handshake." It consists five steps Recognition of an unsatisfied needs. Information Search Evaluation of alternatives Purchase decision. Post purchase behavior.

Key Terms
Buying
The

Behavior

decision processes and acts of people involved in buying and using products

Consumer
Buying

Buying Behavior

behavior of people who purchase products for personal use and not for business purposes

Consumer Decision-Making Process

Need Recognition Information Search Cultural, Social, Individual and Psychological Factors affect all steps Evaluation of Alternatives Purchase Postpurchase Behavior

1. Need Recognition
Marketing helps consumers recognize (or create) an imbalance between present status and preferred state When a current product isnt performing properly When the consumer is running out of an product When another product seems superior to the one currently used.

Preferred State

2. The information search stage

An internal search involves the scanning of one's memory to recall previous experiences or knowledge concerning solutions to the problem-- often sufficient for frequently purchased products. An external search may be necessary when past experience or knowledge is insufficient, the risk of making a wrong purchase decision is high, and/or the cost of gathering information is low.

Personal sources (friends and family)

Public sources (rating services like Consumer Reports) Marketer-dominated sources (advertising or sales people)

The evoked

set: a group of

brands from which the buyer can choose

Determinants of External Search

3. Evaluation of Alternatives

Product Choice Brand Choice Dealer Choice Purchase Timing Purchase Amount.

4. Purchase
Choosing

the product or brand to be bought based on the outcome of the evaluation stage The choice of seller may affect the final product selection. Factors such as terms of sale, price, delivery, and warranties may affect the sale.

5. Post Purchase Behaviour

Cognitive Dissonance

Did I make a good decision? Did I buy the right product? Did I get a good value?

Effective Communication Follow-up Guarantees Warranties Under promise & Over deliver

Can minimize through:

Post - Purchase Behaviour

Satisfaction Actions Use and Disposal.

Corporate Purchasing Process.

All production firms have the need of supplies of materials and services from external sources. This makes purchasing, one of the most significant functions of any Production Manager. Purchasing function may include the purchase of Raw Materials. In simple words we can say that Purchasing is the act of exchange of goods and services for money or moneys worth.

Definition
According to LEVIS:Purchasing is the acquisition by manufacture of any necessary primary material suppliers, equipments by any method whatsoever.

Objectives

Purchasing items with right price. Purchasing items with right quality. Purchasing items at right time. Purchasing items from right source. Purchasing items of right quantity.

Steps Of Purchasing Procedure

The purchasing generally comprises the following steps: 1) Recognition of the need 2) Selection of the supplier 3) Placing the purchase order 4) Follow up of the order 5) Receiving and inspection of the materials 6) Payment of the invoice 7) Maintenance of the records & Maintenance of the vendor relations.

PURCHASE SYSTEMS

Pre-purchase System. Ordering System Post Purchasing System.

Pre-purchase System: Includes making requisitions, requirement programmes,selection of suppliers, obtain quotations and evaluating them.

Ordering System:
Once the decision on supplier & the rates are finalized the order is placed with the selected supplier. The next task is to place the Order.

Order form Contains.

Purchase Order reference number Description Of materials & detailed spcs. Quality Required and Delivery Schedule. Price and Discounts. Shipping Instructions. Location Where Matls. Are to be shipped. Signature Of materials Manager. Detailed Terms Of Conditions.

Post Purchase System

Includes follow-up procedure, receipt and checking invoices. Whole sys operates in probabilistic condition. Once items are received, they are checked for quality, quantity, specifications etc. Invoices are also checked for correct tally with PO details.

Special Purchase Systems

Forward Buying Tender Buying Blanket Order Zero Stock Rate Contract

Forward buying

the purchasing period say 1 yr. will be taken in advance and Commitment is made for qty, rate, delivery schedule by considering availability of funds and the requirements. Used for public buying to avoid favourism to a specific vendor.

Tender Buying:

Preparing Bidders list Advertising tenders Receiving bids Evaluating Bids Placing of orders with bidders with lowest cost.

Blanket Order
Organization will enter in to agreement with its supplies to receive items for a required qty at a particular rate over a period of time. Zero Stock : JIT and Zero inventory concept Suppliers near to plant are considered. Organization even provide technical know-how, QC support etc. to its suppliers.

Rate Contract

Very much used in public sector and Govt. departments The suppliers are on rate contract with DGS&D for a specific period. Organization can place orders to straight away with such firms without going through the lengthy procedure of purchasing.

Aspects Of Purchase Management

Price forecasting Purchasing of capital equipments International purchasing Public buying

Price Forecasting
Its prediction of future prices It helps in buying materials in right time and of right qty. Especially while impact of seasonal variation is present. Methods. Charting method Moving average method Regression methods Exponential smoothing method

Purchasing Of Capital Equipments

These are having very less frequency. As having huge capital outlay under fixed Over heads, a careful ansys should be done before buying these items. Various Approaches: Pay back period method Rate of Return method Present worth method Annual equivalent method Future worth method

Options

Purchase of new equipment Purchased of used equipments Leasing

Public Buying

Here the centralized buying concept was promoted to satisfy the demand of the organizations like defense, Railways, Post & telegraphs, State govts, public sector & quasi public bodies through DGS&D which is the centralized purchasing organization of India.

5. Post Purchase Behaviour

Cognitive Dissonance

Did I make a good decision? Did I buy the right product? Did I get a good value?

Effective Communication Follow-up Guarantees Warranties Under promise & Over deliver

Can minimize through:

Post Purchase Behavior

This refers to the behavior of a consumer after purchasing a product. They may be satisfied or dissatisfied with it. This satisfaction/dissatisfaction will result in certain consequences. They first exhibits a behavior and latter tries to justify it by forming an attitude in self justification. If satisfied.. He would regularly buy the product and develop a loyalty. Also there exist positive word of mouth. If Dissatisfied.. He would stop buying the products, there is no loyalty building. Also there exist negative word of mouth. He feels mental tension also.

Continue..
If Dissatisfied.. He would stop buying the products, there is no loyalty building. Also there exist negative word of mouth. He feels mental tension also. This is known as Cognitive dissonance or Post purchase dissonance.

It refers to the anxiety or doubts the consumer have after making purchase.