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MGMT 3480 Lecture Notes - Indira Gandhi National Open University, Online Advertising, Consumer Behaviour

Course Code
MGMT 3480
Steve Foran

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Various stages of buying process:
1. Needs and problem recognition: This is the first step for a consumer in buying process.
In this step consumer comes to a decision of needs and wants. Needs are the primary
desires of a consumer. For example, medicine, basic food etc. Wants are the second
level of desires. These are the products that enhance the lifestyle of consumers. For
example, car, air condition etc. In this step consumers decide what they want and need.
They recognize their desires and ability to fulfill that. Every consumer has certain
amount of budget to execute their expectation and according that they limit their
desires. Consumer looks for the product that will provide expected benefit. Sometimes,
customers become confuse between alternatives and problems arise. In this step they
encounter problems and solve them according to the needs and budget.
(Webstar and Yoram, April 1974, "A General Model for Understanding Organizational
Buying Behavior")
2. Product specification: This is a unique step in buying process. Companies normally focus
in this step through specifying different products for different consumers. For example,
for T-shirt we have small size as well as XL and XXL sizes for different segment of
consumer. After recognizing consumer’s needs and wants, they want unique specific
product for them. Some businesses are specialized in this genre. For instance, jewelry
business makes ornaments by recognizing consumer’s specifications and unique ideas.
They make exclusive orders to maintain the uniqueness of the business. Each consumer
has their own preference and taste and according to that they search for specific kind of
product to get the maximum benefit. There are several reasons behind product
specification. First of all, it separates the potential consumers and focuses on their
needs and wants. Second of all, it gives manufacturing companies flexibility to design
their product according specific market segment. Finally, product specification adds
value to the brand by attracting all ages of consumers.
(Wind and Webstar, 1972, “On the Study of Industrial Buying Behavior: Current
Practices and Future Trends")
3. Research for information: Customer decision process is the central focus of marketing.
In this step marketing people research for customer buying behavior. For example, how
customer’s behavior pattern changes, product locations and appearances, product
reviews and available information in the market about the product etc. Consumer
research for the benefits and advantages of their expected product. Sometimes some
unique features make product more attractive and appealing than others. When people
are buying any product they are spending their earnings. So, it is not only their duty but
also their right to research about the product before spending money. There are many
substitute goods which are very similar and appeal the same market segment. So to
remove any kind of confusion consumer’s research is the best way to maximize the
benefit while minimizing the cost.
(Sheth and Jagdish, 1974, "Organizational Buying Behavior: Past Performance and future
4. Deciding on visitation: Consumer uses different ways to research about products. One
of the ways is online. Many manufacturing companies are now spending lots of time
designing online marketing features. Visitation mostly popular with online marketing.
Marketing companies know online marketing is beneficial for both consumer and
marketer. Today, consumer checks on internet before buying a product. Watch the
reviews; gather other people’s feedback and also sometime the information of making
of the products. Today’s world is very interactive and it’s only because of the social
media. For example, a company is buying or selling a product and they want to reach
their potential consumer through the power of internet. On the other hand, consumers
are looking for a product and the stores to buy and they can get all the details and also
the customer service through internet. Online marketing not only increase the visitation
but also the exposure of the brand.
(Kotlar, 1985, “Visitation and Differentiation the market offering”)
5. Consumer’s loyalty: This is very significant subject regarding consumer buying behavior.
Loyal consumers are the key factors in influencing product’s revenue. They not only
increase revenue by buying the product but also preach about it in market. Today, the
success behind the Apple products is mostly the loyalty of the consumer. Most of the
customers of RIM are switching to Apple and remaining loyal to them. The more loyal
consumer a company has the more it becomes easy to sell the product. Every loyal
consumer is like a good publicity for the company. Companies have specific division only
for loyal customers. They know the value and that is why they try to retain loyal
consumer more than new ones. There are several benefits of loyal customers. First of
all, they are stable and permanent consumer for the product. Second of all, they act as a
positive media among the other potential buyers and influence them to switch their