Definition and explanation: Five Steps of Buyer Decision Process

There is a systematic procedure for the buying process. A procedure consists of

different stages. These stages form its own significance and features, failure of a
particular step leads to the collapsing of the entire buying process. The buyer’s
behaviour is a process that involves a series of related and consecutive steps and
activates. The process begins with the discovery and recognition of a unsatisfied
need or want This process follows six sequential stages which are fundamental in
influencing the consumer’s behaviour and ultimate decision.

Six stages of the buying process:

1. Recognition of a problem:
The process begins with recognizing the customer’s problem, identifying the
requirement and acquiring goods or services to meet and satisfy that particular need.
Information gathering through advertisement, trade exhibition and sales
representatives, these are avenues that can be used by the customer regarding the
features of the product and the cost of that product. The marketer can recognize the
requirements of buyers by email, direct mail, prospectus or telemarketing.

2. A preparation of Comprehensive List:

When certain requirements are identified, buyers are advised to prepare a
comprehensive list of the items required. The assistance manager and engineer help
to interpret and eliminate any complex items, the features and quantity of the product
required may be determined scientifically. Reliability, durability, after sales service,
price of the product, quality of the product, etc... These are some of the other
important factors to be considered when preparing the list. The comprehensive list
should help the marketer to convince the buyer about its product and services that
would meet the requirements of the customers in all respects.

3. Products Specification and Products Analysis:

The technical specifications of the products are developed at this stage. An expert
team of line managers, engineers come together to decide over the technical
aspects and minutes specification, so that the right quality and quantity of goods as
per specifications can be supplied by the supplier. The product value analysis is
carefully approached, in which all possibilities are examined to enable cost
reduction. The in-depth study reveals whether the product is to be redesigned or
standardized, even if the product needs to be made by a cheaper method of
production. Thus, the decision regarding make or buy a policy is taken on the basis
of product values analysis.
An Example that can be looked at is the following: Normally nine hundred spare
parts are required for the making of a two-wheeler. Bajaj Auto LTD. a leading
manufacturer of a two-wheeler in a country has made 80:20 compositions in respect
of the make or buys policy. It means out of nine hundred spare parts, Bajaj is
manufacturing 20 percent of the parts i.e. ... 720 spare parts are purchased from
outside suppliers.
The information regarding the product from various sources gives a clear indication
of ideas on the product. This kind of reassurance develops an attitude in the
customer that provides faith and feelings towards a product. The consumer may
develop either a positive or negative attitude about the product. If the consumer
develops a positive attitude, this is the first stage of the purchasing process.

4. Selection of Supplier:
The buyer focuses the activities when choosing the most appropriate supplier. The
selections process may include the invitation of tender and quotations, Trade
directories, computer reference and telephonic message are some of the methods
that might be used. Modern-day sources may include social media and the internet;
however, all types of suppliers get equal opportunities on the net. Listed suppliers
are afforded better opportunities for large or bulk orders from the industrial buyers.
The following criteria are used to select the right supplier .The creditability,
Reputation, Facilities offered after-sale service, Procedure developed for supplying
materials. The buyer looks at creditability this means the outcome of character,
where the character of the supplier is judged thoroughly. The judging of the
supplier's reputation is not built on what a supplier thinks of him, but on what others
think of him in the market? It is imperative that trade references are being obtained in
order to appraise his reputation in the industry. If the supplier does not have the
production capacity or unable to meet the requirements as per specification if he has
a bad reputation he will be rejected from the selection process. The suppliers that
qualify would have to go through an evaluation process. This process would
appraise and evaluate their manufacturing facilities and capacities. The final stage is
when a buyer’s company comes up with a shortlist of qualified suppliers.

5. Placing an order:
This is the stage when orders are placed with the selected or qualified supplier from
the proposals that are submitted by them. A presentation on the respective proposal
is made and then the order is placed. Details such as: Specific day, date and time is
mentioned on the purchase order for the delivery of the goods. Spare parts or
components are delivered to elevate any delays in getting the right quantity of goods
or services and to avoid a constant follow up of goods or services.
6. Receipts of the Product:
The final stage is when the product is accepted by the buyer. Payments are made
after delivery and inspection of the consignment.
Definition of consumer behaviour:
Buyer’s behaviour explains the reasons and logic that underline purchasing
decisions and consumption patterns; It explains the processes through which buyers
make decisions.
The following are the definitions of buyer behaviour
1. Walter and Paul: ‘Buyer behaviour is the process whereby individuals decide
whether, what, when, where, how and from whom to purchase goods and services”
2. Belch and Belch: “Buyer behaviour is the process and activities of people
engage in when searching selecting, purchasing, using, evaluating and disposing of
products and services so as to satisfy their needs and desires”

The following are Characteristics of Consumer Behaviour:

1. Consumer as a King:
The consumer is referred to as a king, reason being is that he is the centre of all
transactions in the market. All the activities and process in regard to goods are
meant to benefit the consumer and he is the most important component of the
marketing process. Customers are defined as the person who makes use of good
and services, without the consumer all business activities will cease to happen. Like
a king, he makes the decision on what goods and services he wishes to make use
of. The customer is King he holds the power in the buying decision and therefore he
has the highest status in the commercial world.
2. Consumer as a King-pin of Democracy:
The kingpin of democracy is the title given to the consumer. Every common man in
the democracy is a consumer. The aim of the democracy is the social and economic
well-being of man. However, it is not realized that the real centre of power, in a
socio-economic welfare state is the role that man plays as a consumer. The
Consumer is a Voter; his role is in the administration of the state. The Kingpin or
quarter pin its role in the operation of machinery is a very small part, but it holds the
wheel within the machine. Similarly, the consumer as a Voter plays a vital role in
democracy.
3. Consumer as a Capital:
The consumers are deemed to act as a capital, as they provide the initial capital
injection with regards to the continuance of production. The consumer must be
satisfied and protected. To avoid any interruptions, only the consumer can provide
any additional funds if needed. They provide the capital to carry out the business by
purchasing goods and services. Consumers always play a vital role in the operation
and the conduct of the industry. The wants and demands of the consumer live within
the business entity, this need is essential for the financial growth of any business
concern. Capital is an important element in the running of any business, this is
identified in the consumer.

4. Information Search:
The Information gathering process or searching is one of the most common
characteristics of consumer behaviour. Consumers cannot purchase goods or
services if they are unaware of their existence in the market. The initial decision to
acquire a product or service by a customer must be based on the information
provided by the supplier and whether that information satisfies his needs. There
might a product available that would be better suited to the consumer’s needs, but
he is not aware of that product. The consumer uses various methods to gather
information: advertisements, word-of-mouth and the internet, reviews of products
and product alternatives assist the consumer to make an informed and better
decision.
5. Brand Loyalty:
Brand loyalty leads the consumer to buy products or services from a particular
company. The consumer has a high regard towards this brand in terms of quality and
preference.
6. Price Elasticity of demand:
One of important economic characteristics of consumer behaviour is price elasticity.
The definition; as the change in consumption that an individual makes to change due
to the change in the price of a certain product. The consumption of products with a
high elasticity of demand will fall sharply due to an increase in price.
 Reference Page

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4.Unit: Two
page no: 2.1,2.2,2.13,2.14,2.15