Kotler’s Buyer Decision Process
Need Recognition
In this information processing model, the consumer buying process begins when the buyer recognizes a problem or need. For example, Doug may realize that his best suit doesn’t look contemporary any more. Or, Kathleen may recognize that her personal computer is not performing as well as she thought it should. These are the kinds of problem that we as consumers encounter all the time. When we found out a difference between the actual state and a desired state, a problem is recognized. When we find a problem, we usually try to solve the problem.
Information Search
When a consumer discovers a problem, he/she is likely to search for more information. Kathleen may simply pay more attention to product information of a personal computer. She becomes more attentive to computer ads, computers purchased by her friends, and peer conversations about computers. Or, she may more actively seek information by visiting stores, talking to friends, or reading computer magazines, among others. Through gathering information, the consumer learns more about some brands that compete in the market and their features and characteristics. Theoretically, there is a total set of brands available to Kathleen, but she will become aware of only a subset of the brands (awareness set) in the market. Some of these brands may satisfy her initial buying criteria, such as price and processing speed (consideration set). As Kathleen proceeds to more information search, only a few will remain as strong candidates (choice set).
Evaluation of alternatives
How does the consumer process competitive brand information and evaluate the value of the brands? Unfortunately there is no single, simple evaluation process applied by all consumers or by one consumer in all buying situations.
One dominant view, however, is to see the evaluation process as being cognitively driven and rational. Under this view, a consumer is trying to solve the problem and ultimately satisfying his/her need. In other words, he/she will look for problem-solving benefits from the product. The consumer, then, looks for products with a certain set of attributes that deliver the benefits. Thus, the consumer sees each product as a bundle of attributes with different levels of ability of delivering the problem solving benefits to satisfy his/her need. The distinctions among the need, benefits, and attributes are very important. One useful way to organize the relationships among the three is a hierarchical one (Figure 2). Although simplified, Figure 2 is an example of how a bundle of attributes (i.e., a product or, more specifically, personal computer) relates to the benefits and underlying needs of Kathleen.
Buying Decision
To actually implement the purchase decision, however, a consumer needs to select both specific items (brands) and specific outlets (where to buy) to resolve the problems. There are, in fact, three ways these decisions can be made: 1) simultaneously; 2) item first, outlet second; or 3) outlet first, item second. In many situations, consumers engage in a simultaneous selection process of stores and brands. For example, in our Kathleen’s personal computer case, she may select a set of brands based on both the product’s technical features (attributes) and availability of brands in the computer stores and mail-order catalogs she knows well. It is also possible, that she decides where to buy (e.g., CompUSA in her neighborhood) and then chooses one or two brands the store carries. Once the brand and outlet have been decided, the consumer moves on to the transaction (“buying”).
Post Purchase Behaviour
Post-purchase evaluation processes are directly influenced by the type of preceding decision-making process. Directly relevant here is the level of purchase involvement of the consumer. Purchase involvement is often referred to as “the level of concern for or interest in the purchase” situation, and it determines how extensively the consumer searches information in making a purchase decision. Although purchase involvement is viewed as a continuum (from low to high), it is useful to consider two extreme cases here. Suppose one buys a certain brand of product (e.g., Diet Pepsi) as a matter of habit (habitual purchase). For him/her, buying a cola drink is a very low purchase involvement situation, and he/she is not likely to search and evaluate product information extensively. In such a case, the consumer would simply purchase, consume and/or dispose of the product with very limited post-purchase evaluation, and generally maintain a high level of repeat purchase motivation
Another type of involvement that influences the extent to which the information is processed is called product involvement. The product involvement is referred to as the importance the consumer attaches to a particular product, as opposed to the purchase situation (purchase involvement). For example, one may have a low product involvement (e.g., mustard) but have a high purchase involvement because he/she has invited important friends for a cook-out this weekend and he/she wants to make sure that he/she can impress them with a gourmet Dijon mustard, not with the usual “yellow kind.” A high level of product involvement also increases the extent to which the consumer is engaged in information search, evaluation, and post-purchase evaluation.
Perceptual mapping
Perceptual mapping is a graphics technique used by asset marketers that attempts to visually display the perceptions of customers or potential customers. Typically the position of a product, product line, brand or company is displayed relative to their competition.
Perceptual maps can have any number of dimensions but the most common is two dimensions. Any more is a challenge to draw and confusing to interpret.
The perceived risk model
This model was proposed by the Harvard Business School in the 1960's.They suggested that behaviour is said to depend upon an individual's subjective perception of the risk inherent in buying a product - peoples tolerance to risk varies.
Perceived risk is that level of risk a consumer believes exists regarding the purchase of a specific product from a specific retailer, whether or not that belief is factually correct.
In order to make a sale, you must overcome the customer's perceived risk. The more important the purchase is to the customer, the greater the perceived risk. Therefore, if a customer is considering buying sweet corn for dinner tonight, the perceived risk is relatively low. If he or she is buying corn because the boss is coming over for dinner, the perceived risk goes up.
There are four types of perceived risk:
Functional - Will the product perform as I expect? If the customer is buying sweet corn, this means, "Will this corn be as good as what I remember from last year or what I had last week?" If the customer is buying petunias, the risk is, "Will they make my garden look the way I want it to look?"
Physical - Can the product hurt me, my children or my pets? The use of pesticides in the production of food crops is frequently the concern here, but ornamentals that bear poisonous fruit can also be a concern.Social - What will my peers think? If customers are buying sweet corn to eat in the privacy of their home, the risk here is low. If they buy petunias and plant them in the front yard and petunias are socially out this year, it's like having a big sign in your yard for five months saying, "geek lives here".
Psychological - Am I doing the right thing? This can be a strong motivator in plant sales for the environ-mentally concerned or an impossible obstacle for the truly paranoid.
Financial - Can I afford the purchase? This is not a major problem for most people buying sweet corn or petunias. It is a major obstacle for customers consider-ing a specimen plant or flowering trees that may cost $60 to $100.Time - How much time and effort may I expend to make this purchase? This may be the greatest perceived risk for the plant and produce retailer to overcome. Picture your potential customer in their car thinking, "Do I want to pull into that crowded parking lot? Do I want to stand in that line for a dozen ears of corn?" This is scary! Many of the stands I visit fail to overcome this perceived risk. Their potential customers drive by.
Segmentation
