Consumer Purchase Behaviour
Consumer Purchase Behaviour
.0 Introduction
The purpose of this report is to analyze and evaluate the decision-making process consumers go through when purchasing health supplements.
Health products is a growing industry as more people are more aware of good health in relation to their lifestyle, and how they can use health supplements to enhance self heal health care.
2.0 Decision Making Processes
The following compares the five different stages of decision making processes with respect to health supplements.
* Problem Recognition
* Information Search
* Evaluation of Alternatives
* Purchase Decision
* Post Purchase Evaluation
2.1 Problem Recognition
Today, people are looking for prevention rather than just cure. The desire needs for health supplements product are:
. Prevention as a method of reducing disease: for example, foods with low fat, reduced sugar and added calcium;
2. Wellness, where food is used as a method of balancing body, mind and spirit;
3. Performance to boost physical and mental ability;
4. Cosmetics, where eating functional foods enhances self-esteem and creates an improved appearance: for example, weight control, reduced aging effects and stress reduction.
If the desired state obviously exceeds their actual states, then the problem is recognized and a search for a decision is initiated.
2.2 Information Search
When customer recognizes their need they may bypass the search for information and the evaluation of alternatives, to proceed directly to purchase on the basis of a previously satisfying exchange.
2.2.1 Internal Search
The consumer purchases the recalled brand, and habitual decision-making has occurred. For example, a customer who has a headache problem may recall the previous brand of pain relief they have used previously without further information search or evaluation.
2.2.2 External Search
Customers will start to search information for the cure of that new problem. They can get information by asking their friends and families for advice or they can simply go into the store and ask the sales person for their opinions. There is no need to compare the prices between stores because they are more likely to be the same.
2.3Evaluation of alternatives and the purchase
In health supplements evaluation, consumers are more willing to consider a wide range of brands because of lack of commitment to one or several brands. Given a lack of commitment, they are less willing to spend time interpreting advertising messages and evaluating brands. As a result of this, consumers purchase the most familiar brand and buy the same brand repetitively.
The decision to purchase health supplement is base on the following evaluation criteria:
) Convenience of the stores
2) Their familiarity of the products
3) Price of the products
Consumers buying health supplements do not care much on where they buy their products from.
2.4 Post Purchase Process
The health supplements are evaluated after the purchase only if there is a noticeable product failure such as the tablets they bought did not perform as what they have expected. Most likely, if customers were dissatisfied with the product failure, they are likely to turn and try other brands of a similar product next time.
3.0 Involvement
The purchase of health supplements requires minimal or no premeditation and planning for some consumers. High involvement purchases are those that are important to the consumer either from a financial, social, or psychological point of views.
The purchase is characterized by personal relevance and identification with the outcome. An individual anticipates a potentially significant gain from expending time and effort in comparison-shopping before buying.
Therefore, a high level of felt involvement can increase an individual's willingness to search for, process, and transmit information about a purchase. If a consumer perceived a product, ...
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3.0 Involvement
The purchase of health supplements requires minimal or no premeditation and planning for some consumers. High involvement purchases are those that are important to the consumer either from a financial, social, or psychological point of views.
The purchase is characterized by personal relevance and identification with the outcome. An individual anticipates a potentially significant gain from expending time and effort in comparison-shopping before buying.
Therefore, a high level of felt involvement can increase an individual's willingness to search for, process, and transmit information about a purchase. If a consumer perceived a product, which is important or valuable to them, it is more likely that they will have a high involvement with their decision process.
The most important factors influencing a consumer's involvement level are their perceived benefits or perceived sacrifices. The purchase of any product involves a certain amount of risk, which may include:
* Product Failure - Will the health supplement product not perform as expected?
* Financial - is it a financial burden to the consumer?
* Social - risk friends or family will deride the purchase
* Personal - risk that the product will physically harm the buyer (e.g., is this health tablet meant to do me any good? will it ruin my health instead?)
In a high degree of perceived sacrifices, decisions in this case may require significant financial commitments, involve social or psychological implications. Information is likely to be processed actively and carefully before a decision is concluded for the purchase.
In other words, alternatives are carefully evaluated, and their attributes are painstakingly matched and compared. In the case of low degree of perceived sacrifices, decisions in this case may require small or no financial commitments that involve social or psychological implications.
Consumers may already established criteria for evaluating products, services, or brands within the choice category. It is unlikely that the consumers will search for information and rigorously evaluate each available alternative. Situational factors also influence risk perception.
In low-involvement decision process, consumers engage in very little external search before they make a purchase. Therefore it is crucial that consumers immediately think of the company's brand when they recognize a problem.
4. Conclusion
The choice criteria of health supplements are solely personal, social or image criteria, and there is less choice on the economic or technical aspect; hence the consumer behavior could be characterized as "marketing man". The decision-making processes of health supplements is based on the level of involvement the consumers has in the purchasing decision for health supplements purchase has little or no risks involved therefore low involvement occurs in the purchase decision. A consumer simply feels a physical problem will purchase health supplements. There is not need for an extended information search because the consumer does not consider the purchase important was time and effort in its search.
Regarding to the low-involvement health supplements purchase, mass audiences are targeted through repetitive advertising. Marketers must try to induce a higher level of involvement from customers through their advertising and promotion strategies.
Marketer uses persuasive advertising messages to induce sales. These are often used to assist consumers in their information search
Organizational Purchasing Behaviour
. Introduction
The purpose of this report is to analyze the organizational purchasing behaviour of a new computer server for a department.
Budget time has arrived. The operation manager is analyzing the costs associated with the upgrading of the current server to cope with the future expansion of the department.
2. Decision Making Process
The following compares the seven stages involved in the buy phase: the organization decision-making process:
* Recognition of problem (need)
* Determination of specification and quantity of needed item
* Search for and qualification of potential sources
* Acquisition and analysis of proposals
* Evaluation of proposals and selection of supplier(s)
* Selection of an order routine
* Performance feedback and evaluate
2.1 Recognition of a problem (need)
The buying process begins when someone in the department recognizes a problem or need that can be met by acquiring a specific product. Problem recognition can result from internal or external stimuli. Internally, the department may decide to launch a new product that requires new system. Externally the purchaser may get some new ideas at a trade show, see an advertisement or receive a call from a salesperson who offers a better product.
2.2 Determination of specification and quantity of needed item
The DMU (decision-making unit) will draw up a description of what is required. The buying centre usually includes some obvious participants who are involved formally in the buying process. It is also influence strongly by organization factors- own objectives, policies, procedure and structures.
2.3 Search for and qualification of potential sources
Since the purchase of the server is a complex item, the purchaser may have to work with others-systems engineers, consultants to define the item. The teams may wants to rank the importance of reliability, price and other attributes desired in the item.
2.4 Acquisition and analysis of proposals
The purchaser may conduct a supplier search to find the best vendors.
2.5 Evaluation of proposals and selection of supplier(s).
Each proposal will be evaluated by DMU for selecting a supplier. The purchaser may attempt to negotiate with preferred suppliers for better price.
2.6 Selection of an order routine
It include the final order with the chosen supplier and list item such as technical specifications, quantity needed, expected time delivery, return policies and warranty.
2.7 Performance feedback and evaluate
At this stage the supplier may contact purchaser and ask them for to rate their satisfactions. The performance feedback may lead the purchaser to continue, modify or drop the arrangement.
However purchasers are subject to many influences when they make their buying decision.
3.0 Choice criteria & influential factors
Some simple factors play a role in the server purchase: politics, service, price, performance, storage, functionality, scalability, and reliability.
a) Politics
A strange political aspect of buying a new server is brand loyalty. An eternal argument ensues about the importance of brand conformity versus having best-of-breed solutions. If your main brand is the best solution, you'll avoid a huge mess.
b) Service and Price
Familiarity with installation software, service procedures and technical support people at your vendor is a great boon. The danger lies in becoming so enamored with a vendor that you can't see the shortcomings. Switching vendors is easy when the products are shoddy but is a more difficult call when only customer service, repair, product selection or financial condition is poor. All these factors must be considered when choosing a vendor. Let the vendor provide real pricing, warranty or service benefits.
c) Performance
The CPU speed, being the most important factor, can sometimes be a little misleading in relation to the actual speed of the system. Other factors such as the type of processor, amount and type of memory, and amount of cache memory can have a major impact on overall speed.
d) Scalability
Technology is changing so fast that system scalability is a critical factor for the ability to upgrade. Scalable expansion like additional slot for peripherals, memory, and multiple processors.
e) Support
The support program offered by your system manufacturer will have a profound effect on your satisfaction with the system. Warranty length is a consideration, but it's not a primary one. The main considerations should be the location and nature of your service provider.
4.0 Customer perceived value
Customer value consists of two different parts. The first is benefit part that a customer gains by using the product. The perceived benefit contains many different attributes and other thing that the customer demands. The other part is sacrifice, which includes all the cost the customer faces when making a purchase. These costs can be monetary as well as non-monetary.
The benefit part consists of four different determinants:
* Product value - This determinant stand for a product's reliability as well as durability.
* Services value - The service value is the perceived difference that the customer identifies concerning things like delivering, training and maintenance.
* Personnel value - The personnel of delivering company can be more or less knowledgeable and responsive.
* Image Value - The brand of the company communicates difference image. These differences are though influencing perceived customer value
The sacrifice part comprise of price, time, energy and conflict.
* Price - This incorporates most prices of the product the customer buys.
* Time/efforts/energy - This driver contains all the number of meeting with the supplier staff and bargaining effort with the supplier's staff.
* Conflict - This kind is a relation0based sacrifice. This incorporates frequent argument between the supplier and customer
* Psychic cost - These are fear of not understanding, fear of rejection and fear of uncertainty which includes the fear of high or highly variable cost.
The most important impact of perceived sacrifices on the perceived value to the organization are:
* Failure or poor performance:
The investigation of the service's capability to deliver a functional solution.
* The psychical costs:
The important of the fear of not understanding could be ascertained by studying the impact of the complexity of the contracts, manual or other written items.
5.0 Conclusion
How do purchasers in organizational buying situations differ from consumer buyers in their purchasing decision making processes?
* Small numbers of individual buyers
* Large number of influences on individual buyers
* Often multi-person purchasing decision-making unit
* Rationality of purchasing motives
* Suppliers are sometimes in active competition with each other
* Organization purchaser may have more power
* There is sometimes a geographical concentration of purchasers
* Relationships between buyers and sellers tend to be more long term, rather than depending on a single commercial transaction
* Many products are pre-specified by the purchaser
* Commercial relationships between buyers and sellers is often long term
* Distribution is more direct
* Higher value of purchases
* Company policies, for instance in relation to suppliers being 'listed' for a particular quality standard, may act as a constraint on the buyer
* Organizational purchase is characterized as "economic man" with related to the choice criteria are solely economic or technical benefits.
Summary
Although factors have been identified that are common to consumer and organizational buying behaviour, it is emphasized that the two markets should be approached differently.
Organizational purchaser tends to work to obtain satisfaction in relation to the company's commercial needs. Although organizational purchasers have an explicit rationale for their actions, this does not imply that they are inflexible to receiving psychological influences.
Marketers should not overlook the psychological factors that drive organization customers. It is here that organizational suppliers must attempt to modify their marketing advances to serve specific distinctive needs and requirements.
Bibliography
* David Jobber (2001), Principle & Practice of Marketing, UK: McGrew-Hill
* Fisk/Grove/John (2000), Interactive Service Marketing, USA: Houghton Mifflin Company
* Gary Armstrong & Philip Kolther (1999), Marketing An Introduction, New Jersey: Prentice Hall, 161-172
* Mowen John C & Minor Micheal (1998), Consumer Behaviour, New Jersey: Prentice Hall
* http://www.agr.gc.ca/food/nff/document.html
* http://www.dsmnutrafacts.com/food/nutrition/vit_con_2k1.jsp
* http://www.dell.com
* http://www.hp.com
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