MKT – 501: Marketing Management and Decisions

KUSOM MBA
Fall 2020
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Lecture 05
Consumer Decision Process and
Analyzing Business Markets

© Sujan R Shrestha, MBA 2020

Model Of Consumer Behavior
 The Buying Decision Process

The consumer typically passes through five stages

Problem recognition
Information search
Evaluation of alternatives
Purchase decision
Postpurchase behavior
The Buying Decision Process

Problem recognition
The buyer recognizes a problem/need triggered by internal/external stimuli
 The Buying Decision Process

Information search

 Personal sources
 Commercial sources
 Public sources
 Experiential sources
Sets Involved In Decision Making

Evoked Set
Sets Involved In Decision Making
 The Buying Decision Process
Evaluation of alternatives
Expectancy-value model

John William Atkinson developed the expectancy–value theory in the 1950s. Further elaborated by
Vroom (1964) postulates that motivation for a given behavior or action is determined by two factors:
(i) expectancy, ie, how probable it is that a wanted (instrumental) outcome is achieved through the
behavior or action; (ii) value, ie, how much the individual values the desired outcome.
Intervening factors
 Types of perceived risk

Functional Physical
risk risk

Financial
Time risk risk

Psychological
Social risk
risk
The Buying Decision Process

Postpurchase behavior
Postpurchase satisfaction

Postpurchase actions

Postpurchase uses and disposal

Classifying Consumer Products

Low vs High -involvement

Consumer Decision
Making
Habitual vs Variety-
Seeking Buying Behavior
 What is Organizational Buying?

Business market
Consists of all the organizations that acquire goods and services used in the production of
other products or services that are sold, rented, or supplied to others
 Characteristics of Business markets

Fewer, larger buyers Derived demand

Close supplier–customer Inelastic demand

relationships Fluctuating demand
Professional purchasing Geographically
Multiple buying influences concentrated buyers
Multiple sales calls Direct purchasing
Buying situations

Straight Rebuy

Modified Rebuy

New Task
 The buying center

 Initiators
 Users
 Influencers
 Deciders
 Approvers
 Buyers
 Gatekeepers
Institutional and Government Markets

Institutional market
Schools, hospitals, nursing homes, prisons, etc. that must provide goods and services to
people in their care
Institutional and Government Markets

Government organizations
Are a major buyer of goods and services in most countries