U.Archana asked:


MER    BUYING  BEHAVIOUR

ABSTRACT

    customers make purchases in order to satisfy needs. The wealth of products and services produced in a country make our economy strong.All  the behaviour of human beings during the purchase may be termed as “buyer behaviour”.. In this article there is a view about birth of buying ideas, what is buyer behaviour,  How consumer buy, why consumer buy, types, Decision process, Motives,conclusion.

INTRODUCTION

Consumer is the king and it is the consumer determines what a business is, therefore a sound marketing programme start with a careful analysis of the habits, attitudes, motives and needs of consumers. In particular a marketer should find answer to the following questions:

  What are the products they buy?

    Why they buy them?

   How they buy them?

  When they buy them ?

   Where they buy them?

   How often they buy them?

THE BIRTH OF BUYING IDEAS

   Mr.A owns scooter. The scooter is causing dissatisfication because of some defects or troubles in it. He decides to replace it with another scooter. He anticipates the idea of a trouble free and dependable scooter. He decides not to buy a scooter of the same make, because of dissatisfication and lack of confidence. Thus a thought seed about a new  scooter is born in him, the moment he thinks,”I must replace the scooter “ the buying ideas come up. With the thought in his mind, he thinks of the benefits. And this leads to further thinking: what sort of a scooter will give the benefits, he wants. The benefits make the desire. He may buy any one of many makes of scooter, which can give the desired benefits. He makes enquiries and observe through talking to his friends. He reads advertisement about the new scooters. He chooses one with all the possible advantages and which is wholly dependable. Mr.A is a prospective customer to a dealer.

WHAT IS BUYER BEHAVIOUR?

  The wealth of products and services produced in a country make our economy strong. Almost all the products, which are available to buyers, have a number of alternative suppliers: substitute products are available to consumers, who make decision to buy products. Therefore a seller most of his time, seeks buyers and tries to please them. In order to be successful, a seller is concerned with.

Who is the customer? What do consumers buy? When do consumers buy? How do consumers buy? From where do consumers buy? Why do consumers buy?

A buyer makes a purchase of a particular product or a particular brand and this can be termed “ product buying motives” and the reason behind the purchase from a particular seller is “ patronage motives”

    When a person gets his pay packet, and if he is educated ,sits down along with his wife and prepares a family budget, by appropriating the amount to different needs. It may happen that after a trip to the market, they might have purchased some items, which are not in the budget, and thus there arises a deviation from the budgeted items and expenditure. all  the behaviour of human beings during the purchase may be termed as “buyer behaviour”.

 HOW CONSUMER BUY

 1. Need/Want/Desire is Recognized

In the first step the consumer has determined that for some reason he/she is not satisfied (i.e., consumer’s perceived actual condition) and wants to improve his/her situation (i.e., consumer’s perceived desired condition). For instance, internal triggers, such as hunger or thirst, may tell the consumer that food or drink is needed. External factors can also trigger consumer’s needs. Marketers are particularly good at this through advertising, in-store displays and even the intentional use of scent (e.g., perfume counters).

2. Search for Information

Assuming consumers are motivated to satisfy his or her need, they will next undertake a search for information on possible solutions. The sources used to acquire this information may be as simple as remembering information from past experience (i.e., memory) or the consumer may expend considerable effort to locate information from outside sources (e.g., Internet search, talk with others, etc.). How much effort the consumer directs toward searching depends on such factors as: the importance of satisfying the need, familiarity with available solutions, and the amount of time available to search.

3. Evaluate Options

Consumers’ search efforts may result in a set of options from which a choice can be made. It should be noted that there may be two levels to this stage. At level one the consumer may create a set of possible solutions to their needs (i.e., product types) while at level two the consumer may be evaluating particular products (i.e., brands) within each solution. For example, a consumer who needs to replace a television has multiple solutions to choose from such as plasma, LCD and CRT television.

4. Purchase

In many cases the solution chosen by the consumer is the same as the product whose evaluation is the highest. However, this may change when it is actually time to make the purchase. The “intended” purchase may be altered at the time of purchase for many reasons such as: the product is out-of-stock, a competitor offers an incentive at the point-of-purchase (e.g., store salesperson mentions a competitor’s offer), the customer lacks the necessary funds (e.g., credit card not working), or members of the consumer’s reference group take a negative view of the purchase (e.g., friend is critical of purchase).

 5. After-Purchase Evaluation

Once the consumer has made the purchase they are faced with an evaluation of the decision. If the product performs below the consumer’s expectation then he/she will re-evaluate satisfaction with the decision, which at its extreme may result in the consumer returning the product while in less extreme situations the consumer will retain the purchased item but may take a negative view of the product. Such evaluations are more likely to occur in cases of expensive or highly important purchases. To help ease the concerns consumers have with their purchase evaluation, marketers need to be receptive and even encourage consumer contact. Customer service centers and follow-up market research are useful tools in helping to address purchasers’ concerns.

Why Consumers Buy :

 customers make purchases in order to satisfy needs.  Some of these needs are basic and must be filled by everyone on the planet (e.g., food, shelter) while others are not required for basic survival and vary depending on the person.  It probably makes more sense to classify needs that are not a necessity as wants or desires.  In fact, in many countries where the standard of living is very high, a large portion of the population’s income is spent on wants and desires rather than on basic needs. 

    For example, in planning for a family vacation the mother may make the hotel reservations but others in the family may have input on the hotel choice.  Similarly, a father may purchase snacks at the grocery store but his young child may be the one who selected it from the store shelf.  So understanding consumer purchase behavior involves not only understanding how decisions are made but also understanding the dynamics that influence purchases.

TYPES OF CONSUMER PURCHASE BEHAVIOR

      Consumers are faced with purchase decisions nearly every day.  But not all decisions are treated the same.  Some decisions are more complex than others and thus require more effort by the consumer.  Other decisions are fairly routine and require little effort.  In general, consumers face four types of purchase decisions:

Minor New Purchase – these purchases represent something new to a consumer but in the customer’s mind is not a very important purchase in terms of need, money or other reason (e.g., status within a group).  Minor Re-Purchase – these are the most routine of all purchases and often the consumer returns to purchase the same product without giving much thought to other product options (i.e., consumer is brand loyalty). Major New Purchase – these purchases are the most difficult of all purchases because the product being purchased is important to the consumer but the consumer has little or no previous experience making these decisions.  The consumer’s lack of confidence in making this type of decision often (but not always) requires the consumer to engage in an extensive decision-making process.. Major Re-Purchase – these purchase decisions are also important to the consumer but the consumer feels confident in making these decisions since they have previous experience purchasing the product.

For marketers it is important to understand how consumers treat the purchase decisions they face.  If a company is targeting customers who feel a purchase decision is difficult (i.e., Major New Purchase), their marketing strategy may vary greatly from a company targeting customers who view the purchase decision as routine.  In fact, the same company may face both situations at the same time; for some the product is new, while other customers see the purchase as routine.  The implication of buying behavior for marketers is that different buying situations require different marketing efforts

Consumer Buying Decision Process      

   “Nothing is more difficult and therefore, more precious, than to be able to decide is quoted to be the words of Napoleon. This is amply true in the case of consumer too. It is for this reason that the marketers are bound to have a full knowledge of the consumer – buying decision process.

   However it should be remembered that the actual act of purchasing is only one stage in the process and the process is initiated at the several stages prior to the actual purchase. Secondly even though we find that purchase is one of the final links in the chain of process, not all decision processes lead to purchase. The individual consumer may terminate the process during any stage. Finally not all consumer decisions always include all stages. Persons engaged in extensive decision making usually employ all stages of this decision process. Where as those engaged in limited decisions making and routine response behaviour may omit some stages. The consumer decision process is composed of two parts, the process itself and the factors affecting the process.

  SURVEY BY  THE MARKETING TEAM

   A survey conducted by the marketing team of shoppers stop Ltd. Reveals the psychography of the modern shopper.

Acordingly the survey classifies customers in to the four segments namely

Convenience Shoppers Value Shoppers Image Shoppers Experience Shoppers

Convenience shoppers  for instance ,are people who consume relatively less amount of time while shopping. Also they look out for the width and depth of the range they purchase and conduct their annual shopping at one shot.

Value Shoppers always hunt for value for money ; Prefer quality reassurance and benchmark offerings among other related attributes.

Image Shoppers are fashion- conscious and look out for the latest trends and labels.

On the other hand , Experience Shoppers are attentive and prefer personalized services look out  for the right ambience, prefer giving personal advice on clothing at the time of purchase , and prefer not to buy at one sold.
MARKETING IMPLICATIONS OF CONSUMER’S DECISION PROCESS

          It was during 1960’s that a number of theories to explain the consumer ‘s decision process started appearing. The three leading theorists were Howard-sheth , Engel Kollat-Blackwell and Nicosia. Since then a considerable research on the marketing implications of the process has been developed and tested the applications of many elements of marketing.

        Many of the marketing dtrategies and tactics will have to be developed in relation to consumer attitudes. Marketing strategies ,if effectively used, will go a long way in initiating and developing consumer attitudes in favour of the products.

THE IMPORTANT MOTIVES, INFLUENCING THE ULTIMATE  BUYING BEHAVIOUR OF CUSTOMERS.

1. Fear                         : To overcome theft, you may purchase a burglar alarm(out of  

                                        fear)

2. Desire for money    : Purchasing when the price falls down.

3. Vanity                      : Getting costly items to be admired by others

4. Pride                         : Possessing luxurious items for high position in the society 

5. Love and affection   : When you purchase toys, dresses for your sister, it is out of 

                                       affections.

6. Sex and romance      : Spending much on dresses, ornaments etc.

7. Fashion                      : Imitation motives : Old people dress like young ones.

8. Possession                  : This refers to collection of stamps, coins etc.

9. Health and Physical urchasing health foods, vitamins etc.

   Well being

10. Comfort  and          urchasing equipments like refrigerator, pressure cookers,  mixy        convenience                    etc.

 

ECONOMIC FACTOR AFFECT THE BUYER’S BEHAVIOUR

1.Disposal personal income :

    The economists made attempts to establish a relationship between income and spending. Disposal personal income represents potential purchasing power that a buyer has. The  change in income has a direct relation on buying habits.

 2.Size of family income :

   The size of family and size of family income affect the spending and saving patterns. Generally large family spend more and short family spend less, in comparison.

 3. Income expectations :

    The expected income to receive in future has a direct relation with the buying behaviour. The expectation of higher or lower income has a direct effect on spending plans.

 4.Propensity to consume and to save :

   This goes to the habit of spending or saving with the disposal income of buyers. If the buyers give importance to present needs, then they dispose of their income. And buyers spend less if they give importance to future needs.

 5. Liquidity of Fund :

    The present buying plans are influenced greatly by liquidity of assets i.e., cash and assets readily convertible into cash, eg bonds, bank balances etc.,

 6. Consumer Credit :

  “ Buy now and pay later” plays its role effectively in the rapid growth of markets for car, scooter, radio, furniture and the like.

Economic model suggests behavioural hypothsis :

Lower the price of the product, higher the sales. Lower the price of substitute products, lower the sales of this product Higher the real income, higher the sales of the product. Higher the promotional expenses, higher the sales.

Internal influences of buyers

psychographics (lifestyle),  personality, motivation, knowledge, attitudes, beliefs, and feelings. demographics,

consumer behaviour concern with consumer need consumer actions in the direction of satisfing needs leads to his behaviour behaviour of every individuals depend on thinking process.

EXTERNAL INFLUENCES OF BUYERS

 culture, sub-culture, Locality, royalty, ethnicity, family,  social class, reference groups, lifestyle, and market mix factors.

.CONCLUSION

Competing for the consumer is a never-ending challenge. This is due principally to the uniqueness and competitiveness of each individual market, for they are all different and all require different approaches” . Knowledge of the buying motives of consumers is essential for a marketer.The changes in the market are brought by the consumers.

 REFERENCES

 Consumer Behavior In Indian Perspective – Suja Nair – Himalaya Publishers

 Consumer Behaviour – Walker

Modern marketing – - R.S.N Pillai, Bagavathi

 

 

 

Vicki L. Olton asked:


The Development and Structure of a Marketing Plan: Towards the Development of Marketing Strategies

1. The Situation Analysis

In the planning process there are steps that must be taken prior to the development of the marketing strategies; the first one is conducting a situation analysis. A situation analysis is “the overall process of collecting and interpreting internal, competitive and environmental information.” It presents a summary of these environments and summarizes the company’s current marketing objectives and performance in the market. Through the situation analysis business is provided with a systematic way of viewing marketing activities by analysing the customer, strengths, weaknesses, opportunities and threats (SWOT) in relation to the competition. The situation analysis according to Gartrell includes internal, external and customer analyses, also known as the product, position, and prospect analyses.

The product analysis includes a review of the current objectives, strategies, and company performance. Product capabilities are examined as well as the limitations of the tourist product. The whole destination and its facilities are examined to determine what is there to be offered to the potential traveller. This analysis eliminates poor performance since through this the marketing goals and objectives are reassessed in order to determine their effectiveness.

Second is the position analysis, which addresses issues such as how the destination is “perceived” by the market, an analysis of the strength and weakness and how these can be compared to the threats and opportunities in the external environment, as well as the previous success of the destination shown in statistical reports. Also, the position of the destination in relation to the marketplace, the competitors’ products, services and their position in the market are examined. Position is important, since marketing strategies are developed based on the kind of image that the company expects to maintain in the eyes of the customer.

Next is the prospect analysis also known as the customer analysis, which involves the selection of the best target markets, likely to increase the usage of the destination’s products and services. In this analysis factors like potential demand in certain markets, the criteria for selecting the competition, emerging markets, and what political, social and economical factor may influence the markets are examined.

It must be noted that one of the major steps for conducting the situation analysis is the collection of research. Research is pertinent because it is the tool that allows the organisation to become aware of the customer needs, wants and preferences. Marketing research “monitors and evaluates marketing actions and performance, and communicates the findings and implications to management”. Its importance is even more highlighted since it allows for the collection of the necessary data and information to conduct a thorough prospect analysis. In an effort to thoroughly collect accurate and up-to-date data and information from the external environment, an organisation should also have strong marketing intelligence. Marketing intelligence includes “everyday information about developments in the marketing environment that helps managers prepare and adjust marketing plans and short-run tactics.”

Besides, the product, position and prospect analyses, Gartrell speaks of a fourth, known as the promotional analysis, which examines the image of the destination in comparison to the competition and the allocation of resources of the two destinations. The bureau’s marketing budget, sales material and marketing programs are also compared to that of the competition.

On completion of the situation analysis, this information is fed into the SWOT analysis, which provides a framework for viewing the company’s actual strategic position and developing appropriate marketing strategies. When performed correctly, “it can be especially useful in uncovering strategic advantages that can be leveraged in the firm’s marketing strategy”.

2. Program Planning: Development of Marketing Objectives and Strategies

After analysing the information presented in the situation analysis, the next step is to develop effective marketing strategies and in order to do so, marketing objectives must be developed first. This step is a very vital part of marketing planning because without set objectives the marketer is unable to “measure their success in fulfilling the marketing strategy”.

Marketing objectives according to Malcolm H.B McDonald are generally concerned with the 4P’s. Therefore, marketing objectives should be set for each one of these variables of the 4P’s and then the most effective strategies or means of achieving the marketing objectives should be developed for each variable of the marketing mix.

The first variable, “product”, focuses on developing the right product and satisfying the needs of the target market. A product is “anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need. It includes physical objects, services, places, organisations, and ideas.” In the tourism industry, the product is “intangible, variable, inseparable and perishable”. The product is more of an experience put together in a package.

The “place” element on the other hand, refers to the channel distribution. It is imperative that a product be available to the customer and in order to do so there must be a channel of distribution that will bring the customer to the product as opposed to taking the product to the customer. This channel usually consists of “travel agents; tour wholesalers; specialists; hotel representatives; national, state and local tourist agencies; the global distribution systems; the internet; and concierges”. They must be very knowledgeable about the destination because they represent the main source of information for the tourists.

In order for a traveller to know of product offerings of a destination and make the decision to travel to that destination, continuous communication with present and potential travellers is necessary. On developing effective communication strategies, the target audience must be understood and the most important communication channels for this audience must be known. Secondly, communication objectives must be developed. The response sought from the target market must be identified through objectives.

It is believed that since the tourist product is intangible and cannot be tested beforehand, promotion “acts as the product as far as the potential tourist or leisure consumer is concerned” since through this, the customer receives a mental image of the destination, as its experiences are promoted. Images are portrayed through advertising and promotion as the only means of pushing the potential tourist to make a purchase decision. Therefore in tourism marketing heavy interest is placed on the promotional efforts of the bureau.

Ferrell & Hartline make reference to the classic AIDA (Attention, Interest, Desire, Action) model, which sets the basis for the development of the communication or promotional objectives. The model holds that the first goal of the communication campaign is to attract the attention of the target audience. Interest in the product must then be built through telling the customer about the components of the product. If the product matches the needs of the customer, desire for the product is stimulated, which pushes the customer toward actually purchasing the package.

After setting the communication goals, the product must be shown to the target audience and the ways to do so are as follows:

1) Advertising – This refers to the use of information to “persuade consumers to take a desired action toward a particular product”. The main purpose of the advertising plan is to ultimately increase profits and sales for the company and also “to provide information that will change consumers’ mental and behavioral responses in a manner favored by the advertiser”. When setting advertising objectives, the overall marketing objectives must be used as a base.

2) Public Relations – This refers to “the process by which we create a positive image and customer preference through third party endorsements.” The major activities of public relations include, press relations, product publicity, corporate communications and counselling.

3) Sales Promotion – This concerns “short-term incentives to encourage the purchase or sales”

Other communication strategy options include travel, trade shows, presentations, non-print media advertising, familiarisation tours, event hosting, site inspections, cooperative advertising and direct sales. In sum, for each communication medium selected, measurable objectives and detailed strategies must be developed.

The final variable of the marketing mix is price. Price refers to that of the overall package that has been put together for the market and includes issues like car rentals, hotel rates, transportation rates and possibly air fare.

3. Implementation

After the marketing strategies have been developed the programmes must be coordinated in an effort to achieve the plan’s goals and meet its objectives. Timing is a vital factor of consideration during the implementation stage. It “affects the placement of advertising and the degree of impact the marketing effort will have on the targeted market”.

Evaluating Marketing Strategy Effectiveness

4. Evaluation

After careful planning and implementation of the marketing strategies, they must be evaluated in order to determine how successful they have been in achieving the expected or projected. The strategies must be thoroughly examined so that appropriate adjustments may be made. Should marketing strategies prove to be ineffective, the redevelopment of objectives and or new positioning strategies may be necessary.

During the evaluation process the firm “tracks results and monitors new developments in the environment”. Constant changes in the environment might also force the marketer to adjust the marketing strategies in order to better attract the traveller.

Gartrell states that in evaluating marketing strategies employed in a marketing plan, first results must be quantifiable. In addition, weekly, quarterly, or monthly results should be used as benchmarks for evaluating the plan’s effectiveness. Besides meeting the objectives of the plan, there are a set of measurement criteria that must be used in order to determine the effectiveness of the programs implemented. These include: “total number of visitors to area, average length of stay, room nights booked / used, total economic impact and the total room-nights”.

In addition, other measurements known as process variables like: “number of trade/travel shows attended, number of prospects/leads, quantity of brochures distributed, consumer reaction to brochures, number of familiarisation tours, number of participants at familiarisation tourism, number of ads placed, number of travel agents contacted, total number of visitor inquiries, number of direct mail programs, distribution of visitor inquiries, number of media kits mailed, number of editorial inches in publications and total number of direct mail pieces distributed.

Undoubtedly, in order to make marketing programs a success, large funds must be invested into the communication strategies plan. This is why Gartrell highlights that for bureaus, “return on the investment” is yet another variable for measuring the success of marketing programs. The best way then to measure effectiveness is to examine the end result of the marketing campaign by using indicators of success generated by a plan, like “visitor expenditures, economic impact assessment and tourism employment”.

Simon Kirby and Mark Richardson from the University of Central England mention that measuring effectiveness in marketing, calls for an analysis of the effectiveness “of each element of the marketing communication mix…”

The communication mix as mentioned, involves communication vehicles such as advertising, public relations and sales promotion activities. In order to evaluate advertising effectiveness, since Nylen believes that advertising leads to sales, tourist arrivals in this case, then the more advertising done the more “sales” there should be. Therefore, increased tourist arrivals can be used as a measurement of advertising effectiveness. Since print or broadcast media can also be part of the advertising plan, Nylen adds that although the impact of this kind of advertising might be difficult, it is still pertinent to set “expected performance levels that can serve as evaluation standards”.

It is also believed that the effectiveness of the promotional tools in the communication mix also varies with the stages of the “Tourism Area Life Cycle” (TALC). In other words, at certain stages of the TALC certain communication strategies will naturally be ineffective. With the TALC, it is believed that the tourist destination, “moves from evolution through involvement, development, consolidation before reaching stagnation”. In other words, during the introduction stage, advertising and sales promotion are extremely pertinent in creating an extremely high level of awareness. In the growth stage on the other hand, advertising and public relations are to remain considerably high, while slightly decreasing personal selling. Next is the mature stage, during which sales promotion is again of great importance as compared with advertising. In the last stage, known as the decline stage, sales promotions must be kept strong and “advertising is kept at a remind level”. Managers and marketers must therefore be aware of which stage they are at in the tourism product life cycle when developing communication strategies, in order to be more competitive and improve the sustainability of the industry.

Clearly, companies have control over the development of effective marketing strategies, but as mentioned, in other instances, the external environment literally weakens this control. The external environment of marketing consists of the microenvironment and the macro-environment. The microenvironment is that part of the external environment which directly influences the organisation. The macro environment on the other hand, “refers to the broad environment outside an organization’s industry and market. It is generally beyond the influence of the individual organization” as it contains technological, economical, environmental and political influences that “affect the level and patterns of demand” for prodcuts.