Consumer decision making diagram 2 * Problem recognition 2 * Information search 3 * Evaluations of alternatives 3 * Purchase decision 4 * Post purchase behaviour 4
Market segmentation 6
Market segmentation diagram 6 iPad market segmentation 7 Tablets market share graph 8
Appendix 1 10
Consumer decision making process
Decision making process is beginning a long time before product or service is purchased and continues long after. (Kotler & Armstrong 2001) It is a process involving all activities related to decision-making, starting with the recognition of needs and ending on an assessment of the relevance of the consumer purchase decision, including the exchange of information and evaluation of purchased goods and services.
Consumer decision making diagram
Diagram adapted from: www.consumerpsychologist.com
* Problem recognition
It is first stage of consumer decision making process, where buyer is realizing the need and noticing the difference between the desired and the actual state, which is able to start the process of making a purchase decision. (Kotler & Armstrong 2001)
It may occur as a result of decrease in the level of consumer satisfaction with a product (such as obsolete, often breaking down) or increase in expectations (under the influence of the prevailing fashion, buyers wealth growth, due to the emergence of new needs). The need can be triggered by internal stimuli (hunger, thirst) which consequently increases and becomes a desire and by external stimuli-we walked past a bakery and smell bred, which stimulates hunger.
* Information search
To make a decision consumer need to have the appropriate amount of information. Their number depends of the type of product. For routine purchase like bread and butter, amount of information is not that big, but with a decision widely extended, for example buying a house, we could see a number of complex data. Information search includes the active acquisition of knowledge and heightened attention about the product, its price and the places of sale. With increase of obtained information consumer knowledge enlarge too. (Kotler & Armstrong 2001) Consumers can use internal search - find information in its memory (using its own experience and knowledge, if the consumer already used the product, he has opinion about it ) or external search - a reference to the experiences and knowledge of other people (asking friends and family, reading materials, advertising, search on web sites, ask dealers and use statistic). * Evaluations of alternatives
The third phase of the decision-making process is evaluation of alternatives. It is a process where buyer use all information to evaluate alternative brands in the choices. (Kotler & Armstrong 2001)
In practice it means that customer have to give up from one good to another. When choosing, a buyer judge all options that are available. These criteria depend of the product type. The criteria related to the cost (price, service, installation, operating cost), criteria related to the presentation (performance, materials), criteria related to reputation (brand, theme) and criteria of convenience(other factors associated with the product).
As a practice example we can analyze purchase of mobile phone service. Different customer chooses different services, because of different aspects of satisfaction with the purchased product. For some people brand and design of the phone will be very important. For others the technical aspects and the functions of the phone. Some others will focus on a price, contract condition or using phone abroad. There is hundreds criteria's on mobile phone services choice.
The situation is quite different when purchasing