Manish Sharma , Head-IT , Minda Automotive Solutions Ltd.
Gone are the days when supplier drove the market. Now, buyer has become more educated and aware about what he/she wants. Availability of Internet, e-commerce portals, and mobile apps has empowered the buyer. He/she has become more conscious about the quality of the product or service, delivery time, and cost, i.e., total value he or she is getting for the money spent. Buyer's age group has also increased and each age group has a different perspective.
Buyer's behavior has always been of great interest to marketers. The knowledge of buyer's behavior helps the marketer to understand how buyers think, feel, and select from alternatives, how their environment, the reference groups, family, and salespersons influence them and so on.
A buyer's buying behavior is influenced by cultural, social, personal, and psychological factors. Most of these factors are beyond the control of marketers but they have to be considered while trying to understand the complex behavior of the buyers
Other two factors related to buyer mainly influencing the buyers for decision-making are risk aversion and innovativeness.
Risk aversion is a measure of how much buyers need to be certain and sure of what they are purchasing. Highly risk-adverse buyers need to be very certain about what they are buying, whereas less risk-adverse buyers can tolerate some risk and uncertainty in their purchases.
It depends on supply market dynamism and importance or supply.
The second factor, innovativeness, is a global measure, which captures the degree to which buyers are willing to take chances and experiment with new ways of doing things. It depends on complexity of supply and complexity of decision making.
To understand a buying process, broadly, there are five stages in it.
- Need or problem recognition
- Information gathering
- Evaluation of options
- Purchase decision
- Post-purchase action
Need or Problem Recognition. Purchase decision-making process begins when a buyer becomes aware of an unsatisfied need or problem. This is a vital stage in the buying-decision process, because without recognizing the need or want, an individual would not seek to buy goods or service.
Information Gathering. After the buyer has recognized the need, he/she will try to find the means to solve that need. First, he will recall how he used to solve such kind of a problem in the past; this is called nominal decision making. Secondly, a buyer will try to solve the problem by asking a friend or go to the market to seek advice as to which product will best serve his need; this is called limited decision making. Sources of information include: personal sources, personal experience, public sources, and commercial sources.
Alternatives Evaluation. Buyers evaluate criteria referred to various dimensions – features, characteristics, and benefits that a buyer desires to solve a certain problem. Product features and their benefits are what influence buyer to prefer that particular product. The buyer will decide which product to buy from a set of alternative products depending on each unique feature that the product offers and the benefit he/she can get out of that feature.
Purchase Decision. This stage involves selection of brand and the retail outlet from where to purchase such a product. Retail outlet image and its location are important. Buyer usually prefers a nearby retail outlet for minor shopping and they can willingly go to a faraway store when they purchase items of higher value, and which involve higher sensitive purchase decision. After selecting where to buy and what to buy, the buyer completes the final step of transaction by either cash or credit.
Post-Purchase Actions. The buyer tends to evaluate their decision on the purchase of a particular product. Satisfaction with the purchase is achieved when buyer's perceived performance level is as per or above the expectation. If the buyer's perceived performance level is below expectation, this will eventually cause dissatisfaction, and so the brand and/or the outlet will not be considered by the buyer in the future purchases. This might cause the buyer to initiate complaint behavior and spread negative word-of-mouth concerning that particular product.
So someone has rightly said that buyer is the king of the market. Without the buyer, no business can run. All the activities of the business concerns end with the buyer's delight.