The Buyer Decision Process - Building Happiness

...

Word of mouth communication has increasingly become a popular component of marketing campaign (Groeger & Buttle, 2014). Word of mouth is that consumers talk about products and services with others people apart from marketing activities for products and services. These talks may be conversations between people or one-sided recommendation and reviews (Maisam & Mahsa, 2016). Word of mouth is one of effective ways that convinces consumers to purchase products and services rather than advertisement because humans are likely to believe what they get directly from their peers (Maisam & Mahsa). There are positive and negative word of mouth that clearly depends on the satisfaction of consumer. Due to the development of technologies, numerous electronic media especially internet is supporting the spread of word of mouth. People can share their opinion as well as get others’ opinion immediately regardless of time and location. The “share a coke” campaign is an obvious case for the success of word of mouth. Consumers can print their name on labels of coca-cola bottles that give them a chance to share this happiness with their friends. It brings about sales increase in over 10 years. (“9 example of how coca-cola”, n,d)

A research of Minewhat states that 81% of buyer research online before making purchase decision and 61% of buyer read product reviews before buying. According to Chen, Wyer, Jr. and Shen (2015, p.431), consumers usually research information to recognize a particular product they want to buy.

Customer-product involvement

Product involvement is one of most important factors that influences the buyer decision process. Bian and Moutinho (2008, p.6) defines product involvement as an insight of customers about the importance of the products depending on the customers’ basic needs, beliefs and concerns. Decision-making is categorized according to the degree of customer-product involvement (Fanning, 2016) (see figure 3):

[pic 32]

Figure 3: Product involvement affects decision-making

- Impulse decision-making is identified as deploying little time and effort in selecting and purchasing products in which customers usually suddenly purchases products which may be food or drink.

- Routine decision-making happens in daily basic like buying groceries that is mentioned as habitual buying, repeat purchasing, straight rebuy and fast moving consumer goods.

- Limited decision making is characterised by the investment of money, time effort is nominal and not very high such as purchasing a furniture or a car.

- Extensive decision making is used when the product is a very high involvement product and the investment is very important that may happen once or twice in life time. For example, buying a house or buying a new manufacturing plant in case of industries.

Ferreira and Coelho (2015) concludes that higher involvement brings customers to employ more time and effort assessing alternatives, utilize more complicated decision processes and more important recognized product characteristic differences.

Impulse buying occupies a large share in daily life of consumers. In some product categories, the rate of impulse buying behaviour is extremely high: “85% for candies and chewing gums, 75% for dental hygiene products, and 70% for cosmetics” (Solomon, Bamossy, Askegaard & Hogg, 2009). Impulse buying is a quick, spontaneous and hedonic purchase behaviour in which customers tend to make decision without their carefully thinking (Rook, 1987). The impulse buying behaviour may be influenced by many aspects such as product’s types, money power, consumer’s mood and shopping task (Chen, 2008).

The research of Ferreira and Coelho (2015) shows that the degree of product involvement positively impacts on brand loyalty. Accordingly, when customers purchase a high involvement product, they tend to purchase same brand of previous purchase that may lead to the efficiency in stage of searching for information.

Estimating risks

When assessing alternatives, customers estimate risks that is referred as perceived risks in marketing field (Fanning, 2016). Perceived risk is the customers’ perception of unexpected and uncertain outcomes resulting from buying products (Bauer, 1960). Perceived risk is specific and different among individuals as well as product categories (Bettman, 1973). Jacoby and Kaplan (1972) classifies perceived risks:

- Financial risk

- Performance risk

- Physiological risk

- Social risk

- Physical risk

During searching for information about products, consumers may recognize risks through internal (capacity, behaviour, personality, previous purchase…) and external sources (word of mouth, media). Mitchell & Boustani (1994) states that information obtaining can warn customers to risks and difficulty within the product purchase to which previously they had been unfamiliar. When assessing alternatives, customers make a list of products and then they will choose the highest preference, related to the brand which has minimum perceived risk. High-risk perceivers tend to purchase the products that previously they purchased instead of new products (Arndt, 1967) that bring about brand loyalty. Moreover, High-risk perceivers are more likely to spend more time and effort to find information as well as estimate risks. Furthermore, word of mouth is more effective for high-risk perceivers rather than low-risk perceivers.

When recognizing some risks of product, consumers try to manage the hazards of perceived risk by using risk-handling tactics (Fanning, 2016, p.68). For example:

- Re-purchase the same brand

- Seek additional information through word of mouth or internet

As an organizational perspective, marketers try to create trusted brand to reduce the consumers’ perceptions of risks that clearly identifies an important factor of the company success (Fanning, 2016, p.68). It is true that both organizations and customers hold brands as an essential of product that creates difference from competitors. Generally, when searching for information, customers rely on brand with a degree of risk. It is important that marketing practitioners should position their brand in the top of mind of customers whenever a particular is noticed (Akpan & Etuk, 2014). Therefore, brand is vital part of all companies in the competitive business