The buying decision process

•    Helps markets identify how consumers complete the journey from knowing about a

product to making the purchase decision. 

•    The consumer or buyer decision process will enable them to set a marketing plan
that convinces them to purchase the product or service for fulfilling the buyer’s or

consumer’s problem.
•  The buying decision process is the decision-making process used by
consumers regarding the market transactions before, during, and after the
purchase of a good or service.

• It can be seen as a particular form of a cost–benefit analysis in the presence of

multiple alternatives.

• Common examples include shopping and deciding what to eat.

• Decision-making is a psychological construct. This means that although a
decision cannot be "seen", we can infer from observable behavior that a
decision has been made. Therefore, we conclude that a psychological
"decision-making" event has occurred.

•  It is a construction that imputes a commitment to action. That is, based on

observable actions, we assume that people have made a commitment to
affect the action.
Stages of the buyer decision
• The stages of the buyer decision
process were first introduced by
John Dewey in 1910. Later studies
expanded upon Dewey's initial
finding. Like :Engel, Blackwell and
Kollat in (1968).
• 1.Problem/Need Recognition - Need recognition of Problem Recognition
is the first stage of the buyer decision process. During need or problem
recognition, the consumer recognizes a problem or need satisfied by a
product or service in the market.
• At this stage, the marketer should study the buyer to find answers to some
important questions. These are:

• What kinds of needs or problems arise?

• What is the root of these needs or problems?
• How did they lead the buyer or customer or consumers to a particular
product?
Situations Leading to Problem Recognition
• Insufficient Stock of Goods
• Dissatisfaction or Discontentment with the Stock
• Changes in the Environmental Characteristics
• Changes in the Financial Status
• Promotional Activities
• Consumer’s Previous Decisions
• 2.Information Search-The second stage of the purchasing process is searching
for information. Once the need is recognized, the consumer is aroused to seek
more information and moves into the information search stage.
• Buyers or customers can get information about goods from different sources:
• Personal sources
• Commercial source
• Public sources
• Experimental sources
• The relative influence of these information sources varies with the product
and the buyer. Generally, the consumer receives the most information about a
product from commercial sources-those controlled by the marketer.
• 3.Evaluation of Alternatives -  is the third stage of the buying process.
Various points of information collected from different sources are used in
evaluating different alternatives and their attractiveness.
 Consumer evaluation processes can be explained with the help
of some basic concepts:

• First, it is assumed that each consumer sees a product as a bundle of product attributes.
• Second, the importance of depending upon their needs and wants.
• Third, the consumer will develop a set of brand beliefs about where each brand stands on
each attribute
• Fourth, the consumer’s expected total product satisfaction will vary with the changes at
the levels of different attributes.
• Fifth, the consumer develops attitudes toward the different brands through some
evaluation procedure. 
4.Purchase Decision -At this stage of the buyer decision process, the consumer buys
the product. Usually, the consumer will buy the most preferred brand.

But two factors might influence the

purchase intention and the purchase
decision:
• The first factor is the attitudes of
other people related to the
consumer.
• The second factor is unexpected
situational factors. 
• 5.Post Purchase Behavior – In the buyer decision process’s final stage,
post-purchase-purchase behavior, the consumer takes action based on
satisfaction or dissatisfaction. • The consumer determines if they are
satisfied or dissatisfied with the
purchasing outcome.
• After the purchase, the consumer may
experience post-purchase dissonance
feeling that buying another product
would have been better.
 Models of Buyer decision-making
   There are generally three ways of analyzing consumer buying decisions:

1.Economic models - largely quantitative and are based on the assumptions of

rationality and near perfect knowledge

2.Psychological models - psychological and cognitive processes such as motivation

and need recognition.

3.Consumer behavior models - practical models used by marketers. They typically

blend both economic and psychological models.
 Business buyer behaviour

   The marketing stimuli for business buying consist of the four Ps:

• Product,
• Price, 
• Place,
• Promotion. 
      Other stimuli include influential forces in the environment:

• Economic, 
• Technological,
• Political, 
• Cultural,
• Competitive.
 Main types of buying situation

• Straight rebuy-A business buying situation in which the buyer routinely

reorders something without any modifications.

• Modified rebuy-A business buying situation in which the buyer wants to

modify product specifications, prices, terms or suppliers.

• New task-A business buying situation in which the buyer purchases a

product or service for the first time.
 Specific buying decisions

• Systems buying-Buying a packaged solution to a problem and without all

the separate decisions involved. Systems selling is a two-step process.
First, the supplier sells  a group of interlocking products.
 Who participates in the business buying process?

• Buying center
• Users
• Influencer
• Buyer
• Deciders
• Gatekeepers
What are the main influences on business buyers?

• Business buyers are influenced heavily by factors in the current and

expected economic environment, such as the level of primary demand, the
economic outlook, and the cost of money. An increasingly important
environmental factor is shortages in key materials.
• Upgraded purchasing-Buying departments in many multinational companies
have responsibility for buying materials and services around the world. 

• Centralized purchasing-Headquarters identifies materials purchased by

several divisions and buys them centrally.

• Long-term contracts-Business buyers are increasingly seeking long-term

contracts with suppliers.
 Purchasing performance evaluation

• Interpersonal factors-The buying centre usually includes many

participants who influence each other.

• Individual factors-Each participant in the business buying-decision

process brings in personal motives, perceptions and preferences. 
 How do business buyers make their buying decisions?
• Problem recognition—process in which someone in the company recognizes a problem or
need that can be met by acquiring a good or a service.

• General need description—process in which  the company describes the general

characteristics and quantity of a needed item.

• Product specification—process in which the buying organization decides on and specifies the
best technical product characteristics for  a needed item.

• Value analysis—an approach to cost reduction in which components are studied carefully to
determine whether they can be redesigned, standardized or made less costly.
       

Business buying on the Internet

• Electronic Data Interchange (EDI)

• Internet exchanges
• Institutional markets
• Government markets
What is the difference between Consumer and
Business buying behaviors?
 The participants
 Characteristics
 Influences and
 The buying process
 The Number of Participants
 Consumer buying is usually limited to one or two participants, including
the final user of the product.
 Business buying usually involves multiple participants.
• The final users of the product,
• Influencers,
• Gatekeepers
• Purchasing managers and senior management
 Differing Behavioral Characteristics

The consumer market The business market

 Customers are located in different Consists of a few large buyers
geographies Buyers concentrated in specific
geographic markets
 Different buying habits
Long-term relationships with their
 Their needs are usually the suppliers.
same for a particular product
Different businesses might use the same
product differently.
 Factors affecting buying behaviors

The Consumer Market The Business buying Market

• Environmental forces
• Cultural Factors
• Organizational forces
• Social Factors • Group forces
• Personal • Individual forces
• Factors like supplier of choice, order
• Psychological Factors quantity, delivery, service, payment
terms etc...
 The Buying Process

The consumer buying process The business buying process

1. Need recognition
1. Need recognition 2. Development of product specifications.
2. Information search 3. The company prepares a request for
proposal from potential suppliers
3. Evaluation of alternatives
4. Selects one or more suppliers,
4. Purchase decision 5. Issues purchase orders and
5. Post-purchase outcomes 6. Monitors the quality of the products supplied