Marketing Intelligence Assignment
LO1 Using an example of your choice, describe the main stages that an individual customer goes through when making a purchase. (i.e. business –to-consumer decision making process).
1.1 Describe the main stages of the purchase decision-making process
There are several stages in a business-to-customer decision-making process. Suppose a customer is buying a television. This entire purchase process has several stages. In the first stage, the customer recognises his or her need for a new television. In the next stage the customer searches for information regarding the various models of television provided by several manufacturers (Saaty, 1999). In this stage the customer also searches for information regarding the range of televisions sold by various retailers. Then in the next stage, the customer compares the alternatives with each other. This process includes the features of the different models of television provided by various manufacturers. After the customer evaluates all the alternatives of a new television, he or she decides a particular model of a particular manufacturer depending on his or her requirement, needs and preference. After the choice for a particular model is done, the customer chooses a retailer selling the television at the best price or with the best offer. Then the customer buys the television. This stage of purchase decision stage includes all the monetary transactions for the television. After the customer buys the television and uses it for some time, he or she starts to evaluate the purchase decision. This is the last stage of business-to-consumer decision making process (Sheth, 1973). The example given above about the decision making process of a television includes all the activities related to the recognising the needs, searching of information, evaluating the alternatives, purchasing and evaluating the purchase decision.
Q1.2. Explain theories of buyer behaviour in terms of individuals and markets
Buyer behaviour is basically the process in which individuals, groups or organisations make the decision of buying a product. This is the concept which allows the manufacturers and sellers of the products to understand and identify the requirements and needs of the customers. There are several theories and approaches used by an organisation to determine the buyer behaviour. Take Sony as the example of the organisation which has positioned their product Bravia as a brand.
- Economic consumer – This theory of organisation behaviour suggests that the consumer evaluates all the possible options and their costs in the most proper way and then makes the buying decision. For example the television manufacturer Sony using this theory will try to determine the requirements and needs of the consumer and try to provide them the same in low cost. This will motivate Sony to manufacture televisions that cover starting from all the basic requirements of the consumer in low cost to all the advanced features in high cost (Saaty, 1999).
- Behaviourist approach – This theory suggests that the buyer behaviour is heavily influenced by the behaviour of the individual and the background society, culture and family. A clothing manufacturer like Shapiro identifies the clothing needs of the ladies in the market according to their culture, society and family backgrounds. This forces Shapiro to sell the clothing line which is acceptable by the market’s culture and society (Sheth, 1973). Sony launches the ranges of products in different geographic regions depending on the behaviour of the customers in that region.
Q1.3 Explain the factors that affect buyer behaviour
- Cultural factors – Cultural values are passed in the family from generations to the next. The country or place the consumer leaves in has its own cultural values and beliefs. All of these cultural values affect the personal behaviour of the consumer (Saaty, 1999). For example the UK based cloth manufacturer, Shapiro has to sell only those clothing lines in the current market which is suitable and applicable to the culture and society of the market. The consumer prefers the products and services which are applicable to their culture.
- Personal factors – Some of the personal factors that affect the buyer behaviour of the consumer are age, gender, education, social status, economic status, lifestyle, personality, family background etc. For example the economic status of a person affects his or her decisions while buying a product. Suppose the shoe manufacturer Nike introduces a new range of casual shoes signed by celebrities for a very high cost (Sheth, 1973). The person having a weak to moderate economic status won’t be able to invest such a high amount of money for a pair of shoes. Sometimes the question is not about whether a person can afford the product or not, but whether he or she wants to pay that much for that product. For example, a person having a low economic status won’t buy a sports car.
Q1.4 Evaluate the relationship between brand loyalty, corporate image and repeat purchase
Coke is an established brand of “The Coca-Cola Company”. The brand is something that distinguishes the product of a company from the similar products of the other companies. This brand can be the name, sign, logo, symbol, design or any other feature of the product that acquires a special place in the minds of the customers. The product “Coke” of “The Coca-Cola Company” has been placed as a well-known brand in the world by its symbol, logo and unique taste. The term “Brand loyalty” means that the customers who buy Coke prefer it over all the other alternatives i.e. the customers are loyal to the brand “Coke” (Martenson, 2007).
Corporate image is the status of the company in the eyes of common population across the world. The corporate image of a company defines the success of the company and its various products. The Coca-Cola Company has a strong corporate image due to its success in the soft drinks market (Nguyen, 2001). The term “Repeat purchase” defines the process of loyal customers buying a product of the company like The Coca-Cola Company over and over due to its unique qualities.
The link between corporate image, brand loyalty and repeat purchase can be defined in the following way. The placement of Coke as a well-known brand helped The Coca-Cola Company to increase its brand loyalty in the market, which in turn strengthened the corporate image of The Coca-Cola Company. Strong brand loyalty and corporate image caused customers to buy Coke repeatedly, which in turn means increase in the repeat purchase of the products of the company.