Table of Contents

Answer 1 Introduction Pg 1
Stages of Customer decision making Processes Pg 2
Conclusion Pg 5

Answer 2 Introduction Pg 5
Examples for market segments Pg 6
Conclusion Pg 7
References Pg 7

Answer 1

Introduction

The evidences suggest that, decision process of the customer is the decision
making process carried out by the customer when look upon to a potential
transaction in the market before, during and after the purchase of a service or
product. Decision making process is also known as cognitive process of
deciding a particular action from various alternatives, such as eating and
shopping. In addition, Customer decision making can not ‘see’, but it can be
understood by the recognisable manners that a decision has been made by the
buyer. In other words, decision making can be considered as a psychological
creation of an act of purchase. (Horton, 1984) More over, there is a study on
consumer behaviour which gives explanation on how the customers buy, when
they buy, what they buy and why they buy. It combines the elements from
sociology, psychology, anthropology, socio-psychology and economics. Further
more, this study attempts to comprehends the decision making process in a

1
customer, looking into the characteristics such as psychographics, demographics
and behavioural variables, in order to understand the needs of the customer.
This assignment will brief, how the consumer buying decision process works
for purchasing a mobile telephone contract, in detail.

Stages of Customer decision making Processes

It is generally believed that, when a customer plans to buy a contract mobile
phone, he or she goes through different stages in order to make an appropriate
decision. There are five different stages of decision making during the process
of purchase. (Dickinson , 1967)
The following figure shows how the decision making process works.

Recognition Search of Evaluation of Purchase Post purchase

of need information alternatives evaluation

The first stage is to recognise the need of the product. The reason for a new
purchase can be to avail a new service or for an updation of an existing service.
In the case of mobile phones, new technological advancements are introducing
day by day and the customer has to make a long term preparation to make a
purchase. Now other than telephony, mobile phones provides a wide range of
services such as MMS, Text messaging, internet, Bluetooth and intranet,
photography, gaming etc., At this stage customer will analyse the need and
makes a mind to purchase a particular model or product.

In the second stage, customer try to obtain the maximum information related to
the particular product. If the requirement of the buyer is powerful and the
service or the product, which the buyer looks for, meets the requirement
available close to hand, then the buyer make the buying decision there and then.
If not, the buyer has to search for the available information regarding the

2
product. Information can be obtained to the buyer from various means, such as;
experimental sources, commercial sources, personal sources and public sources.

Experimental sources:- If the particular model is an existing product used by

the customer for a certain period, the customer has handled the product before
and also the product has been examined by the customer, then the customer has
the optimum information regarding the product.

Personal sources:- data can be gathered from the sources such as friends, family
and any other communities.
Commercial sources:- facts and figures related to the product may be gathered
from advertisements, retailers, dealers, sales people and point of sale displays.
Public sources:- like commercial sources, buyer also collects information from
newspapers, magazines, television, radio and from consumer organisations as
well.
The sources of information may vary by the buyer and the product. In addition,
the buyer relies on personal sources than commercial or public sources.

Third stage is the evaluation stage in which, the buyer looks for an alternative
options such as products, brands and services. With numerous mobile phone
service players available in the market and showcasing their elite features, the
buyer also has many choices to opt. Selection of an ideal contract is as much
important as selecting the best tariff plan to go well with customer
communication needs. All the mobile service providers put on latest mobile
phone deals to attract the buyer and also tempting and effective offers like cash
back offers, 12 month free rental and free gifts, in order to attract the customer.
With the facility of monthly payable contacts, the customer has the option to
grab the latest mobile phone or a dream gadget depending upon their need and
fashion. Obviously, monthly contract tariffs are economical than Pay as you go

3
tariffs and mobile phone handset prices are subsidised with monthly contract
plans. By the evaluation of the alternatives and their various offers and features
in the market, customer makes a buying decision. The significant determinant of
the degree of evaluation is the involvement of the customer in the process. In
addition, by involving in the process, the customer denote the level of professed
significance and individual importance that go along with the preference.

The fourth stage is the stage of purchase in which the customer chooses the best
buying alternative product and service contract, store and the mode of purchase,
whether to make the purchase through online or on the store. Although the
customer makes a decision and finalises the purchase, it may differ from the
original purchase, it could be because of, either the delay happened during the
evaluation of alternatives or with information gathering. Some occasions the
decision may change due to the unavailability of the product. Buying a contract
mobile phone is in the category of high-involvement purchases, which involves
personal risk, and other examples of this are making an investment or buying a
car. To compare with, another one category of purchase is low - involvement
purchases in which no need of much evaluation is necessary. Buying breakfast
cereals, soft drinks are the example of it.

The final stage is the post- purchase evaluation and the customer experiences
common concerns after a purchase decision has been made. The evaluation is
done by analysing the factors mentioned above and finally come in to a decision
to purchase a particular product. In this occasion, the buyer may not go for a
immediate repurchase, however it is likely to be switch the brand when making
a purchase next time. In this circumstance, it is the duty of marketing team to
convince the customer that the purchased product will satisfy the need of the
customer and also encourage the customer that the customer has made a right
decision.

4
Conclusion
To be concluded, although there are many levels of decision making during a
purchase process, buyers often reverse or skips some of the decision making
stages. However, the model is exceptionally practical when it comes to
considerate any buy that necessitates any deliberation and thought.

Answer 2

It is widely believed that, market segmentation will be conducted in order to

make the marketing efficient and easy and to find niches. Segmentation is a
process of dividing market into different divisions of customers with general
requirements or description. Apparently, Segmentation helps to satisfy the
requirement of the potential consumers. (McDonald and Dunbar, 2004) This course
work describes about the common segmentation bases used for common
consumer market and also for marketing iPhone.

Common segmentation bases

Consumer market is segmented by considering the characteristics such as,
Demographic, Geographic, Psychographic and Behaviouralistic. (Weinstein,
1994)

Demographic Segmentation variables are gender, age, size of the family,

lifecycle of the family, generations, occupation, education, income, ethnicity,
religion, nationality and social class.

5
Geographic Segmentation variables are; 1. Size of the area which is segmented
according to the population of the area. 2. Region such as country, state,
continent or neighbourhood. 3. Climate. 4. Density of population, classified as
rural, urban or suburban.
Psychographic Segmentation is done based on the lifestyle of the customers,
like interests, activities, opinions, values and attitudes.
Behavioralistic Segmentation is done according to the behaviour of the
customer. Some of the variables are usage rate, brand loyalty, readiness to buy,
user status such as first time, regular and potential, occasions such as events or
holidays that motivate purchase, benefits sought.

Here in this assignment, the segmentation bases used for marketing iPhone are
psychographic and demographic and the characteristics includes gender, age,
education, occupation, life style, concept of consumption, cultural level,
income, personal preferences etc. (Dibb and Simkin, 2008) For digital
marketers, demographic and psychographic segmentation may be useful in
majority of the cases. Strategically, it is important to recognise and categorise
the type of market segments who are interested in a particular product. Data
collection for selecting the segmentation bases, can be done by the help of
surveys and other sources. According to the habits and characteristics of the
iPhone customer, the segmentation of the market will be done, and the market
segments are;

Students - iPhones are helpful for students to cope with their academic
purposes. Girls uses this mostly for study purposes, however, majority of the
boys concentrates on to both study and gaming.

Teen agers - Young teenagers are the significant demographic customers, and
the purchasing power of the teenagers is low. So they pay more attention to

6
appearance, price, and supporting functions such as mp3, mp4, games and other
features. More over, iPhone is a fashion product for the teens as well. Futher
more, iPhones have a potential platform for games, music, communications and
other applications, teenagers always anticipates for the arrival of iPhones than
any other demographic group.

Public - iPhone is designed all sorts of life including common man, especially
the customers with limited income and education. The ordinary customer only
concentrates on the core benefits and they do not care whether the iPhone has
additional features such as games and photography.

Businessman
The iPhone is designed to meet the requirements of the businessman, as the
business people needs to store large amount of data such as messages, business
reports, and needs fast communication between the people, and it is suitable for
day-to day management.

High social status

In this category, CEOs, private bosses, high - end markets are the customers.
Among them the iPhone is a means of showing their courtesy. More over, they
do not replace their phones quite frequently, as a result of this, the price of
iPhones do not fall so quickly.

Conclusion
To be concluded, selection of segmentation bases are very much essential for
maketing a product, especially iPhone. To obtain a high market sustainability to
over come the competition from the market, the manufacturers need to be very
cautious during each and every process of the marketing process.

7
References:
Raymond L. Horton, “Buyer Behavior: A Decision-Making Approach”, Merrill
Pub Co Publishers, 1984.

Roger A Dickinson , “Buyer decision making (IBER special publications),

Institute of Business and Economic Research, 1967.

Malcom, McDonald and Ian, Dunba, “Market segmentation: How to do it, how
to profit from it”, Elsevier Butterworth-Heinemann Publication, 2004, ISBN 0
7506 5981 5

Art Weinstein, Phd, “Handbook of market segmentation: Strategic Targeting

for Business and Technology Firms”, Third Edition, The Haworth Press, 1994,
ISBN 0 7890 2157 9

Sally, Dibb and Lyndon Simkin, “Market Segmentation Success: Making It

Happen”, Routledge Publishers, 2008, ISBN-10: 0789029189