Blekinge Institute of Technology SE Karlskrona MARKETING MANAGEMENT Chaudhry Muhammad Nadeem Faisal Cell: B- Url:

Blekinge Institute of Technology SE Karlskrona MARKETING MANAGEMENT Analyzing Consumer / Business markets & Behavior 1.Stages of the buying decision process 2.Consumer Decision Making 3. Participants in the Business Buying process 4.Purchasing-procurement process 5.Stages in Buying process

Blekinge Institute of Technology SE Karlskrona Creating Customer Value, Satisfaction and Loyalty Chap-5A Stages of the buying decision process The Smart Companies try to fully understand the Customers buying- decision -process, All the experiences in learning, choosing, using and even disposing of products. The marketing scholar developed a stage model of a buying decision process as shown in figure. Customer don’t always pass through all five stages in buying a product. Like when you are going to buy your regular brand toothpaste, you go directly from need the need for toothpaste to the purchase decision and skip the information search and evaluation. Problem Recognition Information Search Evaluation of alternative Purchase Decision Post purchase behavior

Blekinge Institute of Technology SE Karlskrona Creating Customer Value, Satisfaction and Loyalty Chap-5A Problem Recognition The buying process start when a buyer recognizes a problem or need triggered by Internal / external stimuli.  With an internal stimulus, one of the person normal need- hunger and thirst rises to a threshold level become a drive.  A need can be aroused by the external stimulus, A person may admire the neighbors new cars or see a television ad for a Hawaiian vocation.

Blekinge Institute of Technology SE Karlskrona Creating Customer Value, Satisfaction and Loyalty Chap-5A Searching Information Consumer search limited amount of information. A research survey shown that only 30% consumer look at more then one brand. Involvement of search. The middle search state. A person can simply become more receptive about the information of a product. Active Information search. Looking for reading material, phonning friends, going online and visiting stores to learn about the product.

Blekinge Institute of Technology SE Karlskrona Creating Customer Value, Satisfaction and Loyalty Chap-5A Searching Sources: 1. Personal 2. Commercial 3. Public 4. Experimental Search Dynamics: Trough information gathering the consumer learns more about the competing brands and there features. The consumer compare their futures and attributes This compression help them during evaluation and decision for buying.

Blekinge Institute of Technology SE Karlskrona Creating Customer Value, Satisfaction and Loyalty Chap-5A Search Dynamics: Apple Dell HP Toshiba Compaq NEC Apple Dell Toshiba Apple Dell HP Toshiba Compaq Apple Dell ? Total Set > Awareness Set> Consideration Set> Choice Set> Decision

Blekinge Institute of Technology SE Karlskrona Creating Customer Value, Satisfaction and Loyalty Chap-5A Evaluation of Alternative: How does the consumer process competitive brand information and make a final judgment no signal use by all customers, there are several processes. Some basic concepts will help us understand consumers evaluation processes 1 the consumer is trying to satisfy a need  The consumer is looking for certain benefits form the products  the Consumer sees each products a bundle of attributes with varying abilities for delivering benefits to satisfy needs

Blekinge Institute of Technology SE Karlskrona Creating Customer Value, Satisfaction and Loyalty Chap-5A Evaluation of Alternative: Beliefs & Attitudes: Through experience and learning peoples acquire belief and attitude. Belief: is a descriptive thought that a person holds about something. Attitude: A person enduring favorable and unfavorable evaluation, emotional feelings and action tendency toward some product or idea. Expectancy-Value Model: The consumer arrives at attitudes toward versus brand through an

Blekinge Institute of Technology SE Karlskrona Creating Customer Value, Satisfaction and Loyalty Chap-5A Evaluation of Alternative: An attributes evaluation procedure. He or she develop a set of belief about where each brand stands on each attributes. The expectancy model of attitudes formation posits that consumer evaluate products and services by combining their brand belief- the positive and negative according to the importance. ABCDABCD Memory Capacity Graph Capability Size and Weight Price Computer Attributes

Blekinge Institute of Technology SE Karlskrona Creating Customer Value, Satisfaction and Loyalty Chap-5A Purchase Decision In the evolution the consumer form preference among the brands in the choice set. The consumer may also form an intention to buy the most preferred brand. In executing a purchase intention, the consumer may make up to five sub decision. Brand, Dealer, Quantity, timing and payment method. Perceive a good things form a product can help to overcome perceive bad things is a compensatory model. But consumer often take the mental shortcut using simplifying choice heuristics. Heuristics are rule of thumb or mental shortcut in decision process. With non compensatory model of consumer choice, positive and negative attributes consideration. Evaluating attributes in isolation makes decision making easier to customer.

Blekinge Institute of Technology SE Karlskrona Creating Customer Value, Satisfaction and Loyalty Chap-5A Purchase Decision.There are three types of Heuristics choices. Conjunctive Heuristics: the consumer set the minimal acceptable cutoff / level for each attributes and chooses, the first alternative that meet minimum standard for all attributes. Lexicographic Heuristics: the consumer chose the best brand on the basis of its perceived most important attributes. Eliminating by aspects Heuristics: the consumer compare the band attributes probabilistically.

Blekinge Institute of Technology SE Karlskrona Creating Customer Value, Satisfaction and Loyalty Chap-5A Purchase Decision. Purchase decision Situational factors Attributes of other Purchase intention Evaluation alternative

Blekinge Institute of Technology SE Karlskrona Creating Customer Value, Satisfaction and Loyalty Chap-5A Purchase Decision.Intervening Factors If even a consumer form a brand evaluation tow general factor can intervene between the purchase intention and purchase decision. The other person attitude reduce our preference for an alternative depends on two things. (1) The intensity of other person negative attitude toward our preferred brand and (2) our motivation to comply with other person wishes. The second is situational factor to change the purchase intention. Person loose his job, argent purchase, sale point closed. preference and intention are not completely reliable pre director of purchase behavior

Blekinge Institute of Technology SE Karlskrona Creating Customer Value, Satisfaction and Loyalty Chap-5A Purchase Decision.Intervening Factors The consumers decision to modify, postpone, or avoid a purchase decision is heavily influenced by perceived risk.  Functional Risk: The product does not perform up to expectations.  Physical Risk: The product poses a threat to the physical well being the health of the user or other user  Functional Risk: the product is not worth the price paid.  Social Risk: the product result in embarrassment form other  Psychological Risk: The product affect the mental well being of the user  Time risk: the failure of product results in opportunity cost of finding other product

Blekinge Institute of Technology SE Karlskrona Creating Customer Value, Satisfaction and Loyalty Chap-5A Post purchase Decision After the purchase the consumer might have experience and noticing the feature or hearing the favorable things about the other brand and will be alter to information that support him or her decision. The marketer job therefore does not end with purchase. The must have to monitor Post purchase satisfaction, Post purchase action and post purchase product uses. Post purchase satisfaction: Closeness between the expectation and product perceive performance. If it meet the expectation the consumer is satisfied if not consumer is dissatisfied. If it is exceed the expectation the consumer is delighted.

Blekinge Institute of Technology SE Karlskrona Creating Customer Value, Satisfaction and Loyalty Chap-5A Post purchase Decision After the purchase the consumer might have experience and noticing the feature or hearing the favorable things about the other brand and will be alter to information that support him or her decision. The marketer job therefore does not end with purchase. The must have to monitor Post purchase satisfaction, Post purchase action and post purchase product uses. Post purchase satisfaction: Closeness between the expectation and product perceive performance. If it meet the expectation the consumer is satisfied if not consumer is dissatisfied. If it is exceed the expectation the consumer is delighted. Larger the Gap between expectation and performance, the greater the dissatisfaction.

Blekinge Institute of Technology SE Karlskrona Creating Customer Value, Satisfaction and Loyalty Chap-5A Post purchase Decision Post purchase action: If the consumer is satisfied, He / She is more likely to purchase the product again. The satisfied customer will also tend to say good things about the brand to others. On the other hand consumer may abundant or return the product. The may take public action my complaining to the company, going to lawyer or complaining to the other group (business, private or government agencies). Private action include to deciding to stop buying and warning to friends about the buying the product

Blekinge Institute of Technology SE Karlskrona Creating Customer Value, Satisfaction and Loyalty Chap-5A Post purchase Decision Post purchase product uses: The marketer should also monitors how buyer use and depose of the product. A key driver of sale frequency is product consumption rate. The more quickly buyer consume a product. The sooner they may be back in the market to repurchase it. If the consumers throw the product away, the marketer need to know how they dispose of it if likely batteries, beverages, containers, electronic equipment and disposable diaper it can damage the environment.

Blekinge Institute of Technology SE Karlskrona Creating Customer Value, Satisfaction and Loyalty Chap-5A Post purchase Decision Get rid of it temporarily Get ride of it permanently Product Use it to serve Original Purpose Keep it Convert it to serve a new purpose Store it Lend it Rent it To Intermediary Through Middleman Direct to Consumer To be Used To be resold Give it away Trade it Sell it Throw it away

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