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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 consumerismIdentify human buying behavior Understand model of consumer buying behavior Recognize influences Realize digitalization of buyingAnalyze 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
Wants
Needs
Drives
Consumers seek benefits to match needs and wants!
Other Social Influences
Reference Groups
Opinion Leaders
Culture
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 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 ResponseBuying 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.