Marketing Management

Question # 1

1) Discuss and analyze the five stages of purchasing decision model on page 247 of the textbook. Please discuss the processes and importance of each of these stages as discussed on pp. 246 – 249.

Answer:

The buying decision process: the five-stage model

Five stages comprise the consumer buying decision process: problem recognition, information search, alternative evaluation, purchase decision and post-purchase behavior. Consumer passes through five stages of decision process in making chose which products or services to buy. However, customers often skip or reverse some of stages in routine purchase. These stages are important for making marketing decisions. Companies forced to analyses whole decision making process, rather than purchase decision only. A company or merchant can influence on customer purchase behavior by providing targeted information, advertisement or guidance about products.

1. Problem recognition

The buying process starts with need recognition. Problem recognition arises when the consumer realizes that there is a need for some item. At this point the consumer has only decided to seek a solution to a problem, perhaps by buying a category of product. The needs felt can be categorized as either utilitarian (concerned with the functional attributes of the product) or hedonic (concerned with the pleasurable or aesthetic aspects of the product). The current view is that there is a balance between the two types of need in most decisions.

An internal stimulus, or drive, comes about because there is a gap between the actual and desired states. Drives are generated by encouraging a revision of the desired state. The higher the drive level, the more open the individual is to considering new ways of satisfying the need: in simple terms, a starving man will try almost any kind of food. Drives lead on to motivation, which is the reason why people take action. The level of motivation will depend on the desirability of the end goal, and the ease of achieving the end goal; motivations are subjective, so it is difficult to infer motivation from behavior.

An "aroused" customer then needs to decide how much information is required. If the need is strong and there is a product or service that meets the need close to hand, then a purchase decision is likely to be made there and then. If not, then the process of information search begins.

2. Information Search

Having become motivated to seek a solution to the need problem, consumers engage in two forms of information search.

• The internal search involves remembering previous experiences of the product category, and thinking about what he/she has heard about the product category.

• The external search involves shopping around, reading manufacturers' literature and advertisements, and perhaps talking to friends about the proposed purchase.

Information sources:

Personal sources: family, friends, neighbors etc.

• Commercial sources: advertising; salespeople; retailers; dealers; packaging; point-of-sale displays

• Public sources: newspapers, radio, television, consumer organizations; specialist magazines

• Experiential sources: handling, examining, using the product

The usefulness and influence of these sources of information will vary by product and by customer. Customer's value and respect personal sources more than commercial sources (the influence of "word of mouth"). The challenge for the marketing team is to identify which information sources are most influential in their target markets.

3. Evaluation of alternatives

In the evaluation stage, the customer must choose between the alternative brands, products and services. Having found out about several competing brands, the consumer will evaluate the alternatives, based on the information collected or remembered. In the first instance, the consumer will select a consideration set, which is the group of products that would most closely meet the need. Signals are important when making choices; a particular price-tag, a brand name, even the retailer will have some effect on the consumer's perception of the product. Price is frequently used as an indicator of quality, for example, but this can be reduced in the presence of other signals. The decision-making process appears lengthy and complex as stated here, yet most of us make several purchasing decisions in a day without going through a lengthy decision-making process. This is because most of