The consumer buying decision process

The Consumer Buying Decision Process

& factors that Influence it

Dr. Ahmad Faraz MBBS, MBA (USA), PGD Marketing (KL, Malaysia). Department of Marketing College of Business Administration (CBA)University of Dammam Kingdom of Saudi Arabia

The Consumer Buying Decision Process

& factors that Influence it

Dr. Ahmad Faraz MBA (USA), PGD Marketing (KL, Malaysia). Lecturer, Department of Marketing College of Business Administration University of Dammam

Consumer 1. A person or a group that buy a product for personal use .

Buying 1. To acquire the possession of, or the right to, by paying or promising to pay an equivalent, especially in money. 2. To hire or obtain the services. Decision 1. The act of process of deciding; determination of making a judgment. 2. The act of making up one's mind. 3. Something that is decided, a resolution, a judgment.

Influence 1. The capacity or power of persons or things to be a compelling on or produce effects on the actions, behavior, opinions, etc., of others. 2. The action or process of producing effects on the actions, behavior, opinions, etc., of another or others. 3. A person or thing that exerts influence.

Ref. www.Dictionary.com

The Consumer Buying Decision Process

& factors that Influence it.

Refresh idea of

consumerism

Identify human buying

behavior

Understand model of

consumer

buying behavior

Recognize influences

Realize digitalization of

buying

Analyze our buying process

Mischiefs at the end.

The purpose of this presentation is to:

@ How many of you bought something today?

@ How many have seen or heard an ad today?

@ How many of you consumed something today?@ How many of you engaged in word of mouth about a product/service today?

The Consumer Buying Decision Process

& factors that Influence it.

Attention =

StimulusSenses = Sight, Smell, Taste, Touch &

Hearing.

Attention =

StimulusSenses = Sight, Smell, Taste, Touch &

Hearing.

Consumer Behaviour

Study of individuals, groups, organizations.

processes they use to select, secure, and dispose of products, services,

experiences, or ideas

satisfy needs and the impacts that these processes have on consumer and

society.

Consumer Buying Behavior refers to the buying behavior of final consumers -individuals & households who buy goods and services for personal consumption.

The central question for marketers is :“How do consumers respond to

various marketing efforts the company might use´?

Consumer Buying Behavior

Basis of Consumer behaviour study ?

Consumer buying decisions also helps us to

understand roles and try to answer questions

- What consumers buy?

- Where they buy?

- How they buy? & how much they buy?

- When they buy?

- Why they buy.

Basis of Consumer behaviour study ?

Consumer buying decisions also helps us to

understand roles and try to answer questions

- What consumers buy?

- Where they buy?

- How they buy? & how much they buy?

- When they buy?

- Why they buy.

Marketing mixes All other stimuli

Person making decision

Economic Needs Psychological Variables

Social Influence

PurchaseSituation

Consumer decision process

Factors influencing consumer behavior

Ref: Carolyn Brown http://www.writingcapital.com Global Research Papers and Term Papers Writing

Marketing mixes All other stimuli

Person making decision

Economic needs• Economy of purchase• Convenience• Efficiency in use• Dependability• Income

Consumer decision process

Psychological variables• Motivation• Perception• Learning• Attitude• Trust• Lifestyle

Social influence• Family• Social class•Reference groups• Culture• Ethnic groups

Purchasesituation• Purchase reason• Time• Surroundings

Factors influencing consumer behavior

Person does or does not purchase (response)

Maslow Hierarchy of Needs

Source: Maslow's hierarchy of needs proposed by Abraham Maslow in his 1943 paper "A man Motivation". Motivation & Personality 1954

Consumer Behavior is difficult to predict

However, in reality many decisions are not made in awareness of a determined problem by the consumer.

Ref: Sandhusen, Richard L.: Marketing (2000). Cf. S. 218

Possible Needs motivating a person to some action

Ref: Final Consumers and their buying behavior © 2012 by The McGraw-Hill Companies, Inc

Lifestyle Dimensions (and some related demographics)

Ref: Final Consumers and their buying behavior © 2012 by The McGraw-Hill Companies, Inc

Psychological Influences within an Individual

WantsWants

NeedsNeeds

DrivesDrives

Consumers seek benefits to match needs and wants!

Other Social Influences

Reference GroupsReference Groups

Opinion LeadersOpinion Leaders

CultureCulture

Family is big social Influence on Buying Behavior

Husband dominant

Wife dominant

MutuallyChildren dominant

Attitudes Relate to Buying

Attitude: A Point of

View

Belief: An Opinion

Changing Negative Attitudes

Key IssuesKey IssuesBuilding Consumer

Trust

Meeting Expectations Is Important

“Green” attitudes

and beliefs

Ethical Issues May

Arise

Consumer Decision Making Process

Need Recognit

ion

Perceiving a need

Information Search

Seeking value

Alternative

Evaluation

Assessing value

Purchase Decision

Buying value

Post purchase BehaviorValue in

Usage and consumptio

n

Consumer Decision Making Process

Need Recognit

ion

Perceiving a need

Information Search

Seeking value

Alternative

Evaluation

Assessing value

Purchase Decision

Buying value

Post purchase BehaviorValue in

Usage and consumptio

n

Buyer Response

Buying attitudes and preferences Purchase behavior: what the buyer buys, when, where and how much Brand & company relationship marketing

Buyer’s Black Box

Buyer’s characteristics Buyer’s decision process

The EnvironmentMarketing Stimuli OtherProduct EconomicPrice TechnologicalPlace Social Promotion Cultural

The model of buyer behavior

It’s very difficult to “see” inside the consumer’s head & figure out the whys of buying behavior (that’s why it’s called the black box).

Rethinking the Consumer Buying

Process How the web has changed everything

Do you?

Consumer do these things everyday. It’s the way people buy now

Social Media Influence

Source: Facebook - Googlepictures

40% of consumers used Facebook to learn about new products. In 2010 it was 17%

The most

influential new

product

source?

Source: Facebook - Google

Social Media Influence

Google calls this the ZERO MOMENT OF TRUTH

Consumer make buying decision ONLINE

BEFORE calling or entering the store.

Source: www.zeromomentofruth.com

Simple Buying Process

Source: www.zeromomentofruth.com

Digitalized Buying Process

Source: www.zeromomentoftruth.com

Online Buying Decisions- 503 Chinese consumers.

- Chinese are shopping more online than 2 years ago

- Use Internet to look for new products and brands,

information

- Comparing products and brands and making

purchases

- Reason, convenience, time saving and competitive

price

- Income and marital status

- Age, education and internet usage have impact

- Gender Ref. Gong Wen, Maddox Lynda Journal of American academy of Business, Cambridge 17.1 (Sep 2011): 43-50.

China's Internet penetration rate was 31.8% in June 2010, exceeding the world's average of 28.7% (CNNIC, 2010; Gao, 2010; Internetworldstats.com, 2010). Although significantly lower than the U.S. (71.2%) (eMarketer.com, 2010) and other developed countries (Internetworldstates.com, 2010), China's sheer size translates to 420 million Internet users (CNNIC, 2010), the world's highest.

Digitalized Buying ProcessA recent survey found the Internet has surpassed

TV as the medium perceived as most essential in

people’s lives.

Choice = What you can remove from your life

Internet or TV?

49% chose to drop television,

48% chose the Internet.

Ref: Nielsen Online. Reports Topline U.S. Web Data for February 2010,” Nielsen Online, March 15, 2009,

In 2001, 26% choose TV & 72% for eliminating

Internet.

Presence in dot com

“If you’re not visible online when

people are doing their

homework, believe me, they’ll

find others who are”

Jim LecinskiManaging Director

Google.

Rundown@ All buying decision are not always rational.

@ Our awareness will enable us to make better

consumer decisions.

@ Consumer choose to pay attention to things they NEED to pay attention but stimulus characteristics like NOVALTY capture consumer attention.

@ Today we (consumers ) are being influenced by 10+ sources.

@ Differentiation of Quality and Value.

@ Perception of Worth and Utility.

@ Refrain from making Impulsive buying decisions.@ Web buying id efficient but from trusted sources and

brands.

@ Culture & family are strong influences on our buying

decisions.

References & Acknowledgement

Dr. Marwan N. Al-Qur’an , Ph.D (Department of Marketing, CBA, University of Dammam.)

WIKIPEDIA c– The Free Encyclopedia.

The Principles of Marketing – Kotler & Armstrong – 14th Edition, 2012.