Ans 1

The consumer decision making process can easily be divided into five stages: 1.

Need Recognition

2. Information Search 3. Evaluation Of Alternatives 4. Purchase 5. Post Purchase Evaluation These five stages of consumer decision making process with respect to purchase of a car by a middle class consumer are explained below
1.

Need Recognition: - Consumers recognize their need for a product based on stimulus. A stimulus is a cue or a drive. The cues are also of various types physical, social, commercial, non-commercial, etc. For purchasing a car a middle class consumer can receive both social cue and the physical cues. Social cues are received by talking to his friends, colleagues, relatives, etc. & physical cues may be received by just by feeling tired on the two wheeler because of the long distance of office from the home. Need recognition, or awareness, is the trigger of the consumer decision-making process. Before a consumer embarks on a buying process, he must recognize a functional or emotional need. Functional needs are needs based on a product's use in performing a particular function. Emotional needs are based upon consumers desire for products or services, which just might be for the sake of pleasure or emotional interests. For a middle class consumer needs can either be functional or emotional. For instance a customer may be wanting the car so that he can easily travel to his office everyday or it may also be based upon the fact that purchasing a car is a matter of pride or self actualization.

2.

Information Search: - Once a customer decides that he needs a product than he begins searching the information about the car that will fill his need. Information search is both external and internal process. Internal information search is based upon personal experiences. But for a middle class consumer it is unlikely to have experience in terms of purchasing the car. Thus, he is more likely to depend upon the external information search. External information search is use of other resources such as the Internet, as well as consultation with other consumers. Customers also discuss their needs with friends and relatives to see what solutions they may suggest. For more expensive purchases like car, customers may read reviews, look through newspapers.

3.

Evaluation of Alternatives: For a middle class consumer purchasing car the information search is highly driven by the factors like price, mileage of the car, finance facility if required, post purchase servicing, Re sale value etc. Once the customer has gathered enough information he begins evaluating alternatives based upon his pre defined criteria. However, there is no single, simple evaluation process applied by all consumers or by one consumer in all buying situations. He will look for problem-solving benefits from the product. The consumer, then, looks for products with a certain set of attributes that deliver the benefits. Thus, the consumer sees each product as a bundle of attributes with different levels of ability of delivering the problem solving benefits to satisfy his need.

4.

Purchase: - Following selection of the best alternative, the consumer is ready for the purchase act. A consumer's decision to purchase something includes where to buy, terms and availability. Where to buy, refers to the location of the show room from where the consumer intends to buy the car of his choice. The location is depended upon the distance of service station from his residence or office, affection shown by the sales staff during information search, discount offered, ease of finishing post purchase facilities like RTO passing, etc.

Terms refers to the price and mode of payment. A middle class customer buying car may also decide upon the location of purchase based upon the ease of finance facility, repayment options, EMI or interest rates associated with loan etc. Availability refers to the waiting period of the period for a particular car. A consumer may also decide upon his purchase of car depending upon the waiting period for the car or whether or not the showroom can deliver the car to them on a specific day like Dusshera.
5.

Post Purchase Evaluation: The final step in the consumer decision-making process is the

post-purchase evaluation. This is where the customer evaluates his purchase based on previous expectations. If the experience after the purchase exceeds expectations, then he feels like he got a excellent value. If it fails to meet expectations, then he may spread negative messages about the product. If the customer feels that he gets great mileage from the car, his car is praised by his friends, relative, colleagues then he feels that car has met his expectations and is likely to spread positive word of mouth for it. If the car does not met his pre set criteria then customer is most likely to be dissatisfied with the car and is more likely negative word of mouth regarding the same.

Ans 2 Four major psychological factors have their influence on a persons buying behavior. These factors are: Motivation Perception Learning Beliefs and Attitudes

These psychological factors can be expressed as under:

Motivation: A person has many needs. Some of these needs are biological such as hunger and thirst while others are psychological such as recognition, esteem or belonging. A need becomes a motive when it is aroused to a significant level of intensity. Motivation is defined as the drive to satisfy a need. The motivation is the drive that leads the consumer towards buying a product or service. If the motivation is high, meaning the need or perception of need is high; the individual will actively seek to satisfy that need. Many psychologists have developed theories of motivation which are quite useful for consumer analysis. Notable theories are Marshall, Freud, Veblen, Herzberg and Maslow. For example, "Maslow's Hierarchy of Needs" which states that every individual will actively seek to satisfy physiological needs first, followed by safety, social, esteem and finally, self-actualization needs. Other famous theory by Sigmund Freud states that that people are largely unconscious about the real psychological forces shaping their behaviour. He sees the person as growing up and repressing many urges.

Perception: Perception is the process by which people select, organize, and interpret information to form a meaningful picture of the world. Consumers make all manner of associations from their prior knowledge and experiences. Perception is concerned with the way stimuli is interpreted. Stimuli may include a commercial messages, advertisements, etc. Perception is selective i.e. we see what we want to see and nothing else.

There are three different perceptual processes which are selective attention, selective distortion and selective retention. In case of selective attention, marketers try to attract the customer attention. Whereas, in case of selective distortion, customers try to interpret the information in a way that will support what the customers already believe. Similarly, in case of selective retention, marketers try to retain information that supports their beliefs. Learning: Learning can be defined as changes in the individual behaviour arising out of experiences. These experiences play an important role in the consumer buying behaviour. For example if the previous experience of a consumer with Honda vehicles is good then there are high chances that in future if the need arises then he will again purchase the product of the same company or would spread positive word of mouth regarding the same. Learning occurs through the interplay of drives, stimuli, cues, responses, and reinforcement. A drive is a strong internal stimulus that generates action. Drive becomes a motive when it is directed toward a particular stimulus object. Cues are minor stimuli. They determine when, where and how the person responds.

Beliefs & Attitude: - Beliefs and attitudes okay an important role in consumer buying behaviour. Beliefs are the way people think about a particular subject or product. Beliefs may be based on real knowledge, opinion, or faith and may or may not be associated with emotion. Marketers try to understand the beliefs that people formulate about specific products and services. Because these beliefs build product and brand image that affect buying behaviour. If it is found that there exist wrong beliefs that prevent purchase, the marketer will take corrective

measures. For example, Micromax mobiles in India initially was believed to be one of the low quality, low priced mobiles, but over the years with proper advertising it has established itself as a value for money for phone by not only properly branding but also offering better and durable products. An attitude is the individual's consistently favourable or unfavourable evaluation, tendency or feeling about a particular subject. Attitudes put people into a frame of mind of liking or disliking things, of moving toward or away from them. It is very difficult to change attitudes of people. Therefore, a company generally should try to fit its products into existing attitudes instead of making attempts to change them. For example, most of the deodorant companies for men design their advertising strategies around the fantasy that putting on deodorant would attract the females, rather than showing the benefits of the deodorant in the day to day life.