Module 3

Four Main Purchase Situations

1. Habitual purchase:
2. Usually frequently purchased items
3. Usually low-cost items
4. Little conscious effort before the purchase
• Example: buying a bag of chips
Limited decision making:
• Usually occasionally purchased items
• Requires a little information gathering and deliberate thinking
• Example: buying a shampoo produced by an unfamiliar brand
Four Main Purchase Situations
1. Impulse buying
• Is not the result of a decision-making process
• No planning
• Usually on the spot purchases
o Example: A consumer purchasing a pair of jeans might also purchase a t-shirt
on the spot

2. Complex buying decisions

• High-involvement products
• Expensive, high-risk products
• Unfamiliar brands
o Example: Purchasing a house

3. Consumer Decision Making Process

I. Problem Recognition
II. Information Search
III. Evaluation of Options
IV. Purchase Decision
V. Post-purchase Behavior
Consumer Decision Making Process
1. Problem Recognition
 Consumer recognizes a difference between a desired state and actual condition
 I want to buy a TV because the current one is not working properly
 I want to buy a TV because a friend purchased a new one
 I want to buy a TV because the one I saw in the commercial/store was great
2. Information Search
 Consumers will look for information on products after recognizing that there is a
problem (stage 1)
 Internal search: memories (Was I happy with my previous TV?)
 External search: outside sources of information
 Commercials, family and friends, salespeople, consumer reports, product ratings,
Internet, Etc.

3. Evaluation of Options
o Consideration Set: A set of products consumers consider buying after the
information search
• Example: Samsung TV, LG TV, Sony TV etc.
o Evaluative criteria: Objective or subjective criteria used by consumers to
evaluate products in the consideration set Screen size (objective), energy
consumption (objective), stylishness (subjective) etc.
o Consumers assign importance weights to product attributes
• Example: Resolution may be more important than screen size
o Consumers have beliefs about product attributes
• Ex: Consumer might think that Brand A is better than Brand B
o Discovering what criteria is used by consumers in the evaluation process
may help the marketer

4. Purchase Decision
o Consumer purchases a product based on the result of the previous stage
o Consumer decides how to purchase the product
• From a store or online?
• Which store?
• Which online retailer?
o Purchase decision may be influenced by the availability of a product
o If their first choice is not available, consumers may purchase their second choice

5. Post-purchase Behavior

o Consumer evaluates the purchase

o Is the product performing as expected?
o Evaluation may lead to cognitive dissonance
• “Did I make the right choice by purchasing this product?”

o Marketing activities can reduce cognitive dissonance

• Sending further information about the product to reduce cognitive dissonance
• Calling/emailing to make sure consumers are happy with their purchases
  Other Factors Affecting Purchase Decisions
• Some environmental factors may affect purchase decisions
 Example: Consumers living in cold climates may be interested in snow
blowers whereas consumers living in warm climates may be interested in
pool chemicals

 Some situational factors may affect purchase decisions

• Example: Time pressure may lead to a hasty purchase
• Example: A crowded store may lead to leaving the store
• In other cases, a crowded store may attract more customers
• Example: A consumer’s mood may lead to impulse purchases

 If a consumer is highly involved in a purchase, decision making can take a

considerable amount of time

Psychological Factors Influencing Purchase Decisions

 Selective Attention: Paying attention to some of the environmental stimuli

and not all.
 Selective Distortion: Interpreting information in way that is consistent with
one’s existing beliefs.
 Motivation: A driving force leading one to act in a particular way
 Maslow’s hierarchy of needs can be used to understand motivations behind
purchases

 Maslow identified five needs

 These five needs differ in terms of their importance

o According to Maslow, people will want to satisfy more important needs

(lower in the pyramid) before moving to the next level (upper in the pyramid)

• Psychological Factors Influencing Purchase Decisions:

1. Self-actualization needs: self-development, achieving full potential

2. Esteem needs: Feeling of accomplishment, recognition
3. Social needs: love, friends
4. Safety needs: security, protection
5. Physiological needs: air, water, food
  Learning: Change in behavior through practice and experience

 Consumers learn brand loyalty

 Attitudes: Overall evaluations (of brands/products/objects…)

 The three components of attitudes are:

1. Affective component: feelings about brand/product/object…

2. Behavioral component: how one’s actions are affected
3. Cognitive component: beliefs about brand/product/object…
• Personality: Relatively enduring styles of thinking, feeling, and acting that
characterize an individual (Costa, McCrae, and Kay; 1995)
• Lifestyle: How people spend their time
Social Factors Influencing Purchase Decisions
 Roles in the purchase decision-making process

 Initiator: Who recognizes a need and the first one to suggest the purchase of a
product/service
 Influencer: Whose view influences the purchase decision
 Decider: Who makes the purchase decision
 Buyer: Who makes the purchase
 User: Who actually uses the product/service

 Social Factors Influencing Purchase Decisions

• Family shapes a consumer’s purchase decisions/patterns and attitudes
towards products/brands
• Age and life cycle can be used to understand one’s purchase decisions
• Reference groups: People who influence one’s attitudes/behavior
• Individuals in the same social class tend to have similar purchase decisions
• Culture and cultural values influence purchase decisions

 Organizational Buying Decisions

 Compared to consumer markets, in organizational markets

 Buyers are fewer in number
 Buyers are larger
 Buyers are geographically concentrated
 The primary concerns of organizational buyers are:
 Delivery
 Service
 Price
Organizational Buying Decisions
 Organizational buyers’ decision-making process is also described by models
 Robinson et al. (1967)

 Problem recognition
 General need description
 Product specification
 Supplier’s search
 Proposal solicitation
 Supplier selection
 Order-routine specification
 Performance review
Market Research
 Techniques used to understand markets and market segments
 Sample information is used to answer business problems, so the quality of
the sample is important
 Information can come from company records or outside sources
 Company records may include sales reports or customer surveys
 Outside information may include independently published reports or
government statistics
Market Research Process
 First: problem definition. What is the research question?

 Is there available data to answer the research question? If not, company

may
 need to collect primary data

 If primary data is necessary, decide how to collect it

 Collect data
 Analyze data
 Evaluate results
 Develop recommendations