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Importance of Composition of the decision making

1.) Importance of Composition of the decision making unit:

It is really important to study the composition of the decision making unit. This is so because the decisions of purchase are affected by various reasons. Therefore the sources that affect the decision making process should be identified.  The decision making unit or DMU are actually the collection of people who take active part in the decision making process specifically for buying goods and services.

The composition of the decision making can be affected by the followings.

  1. Buyers:

    Buyers are the people with the money who can make the purchase of product and service. These people have potential to purchase but are affected by the different factors who could either support or halt the purchase process by affecting the decision.

  2. Decision makers:

    The decision makers are people who make final decision within a group of individuals. These people have huge controls over the decision making process and can surpass the suggestions of other people to get their final decision applied.

  3. Users:

    The users are the people who are finally going to use or consume the particular product. This way they have their opinion heard most of the times. Thus after the deal is clinched they are given with the particular product after purchase for making its usage.

  4. Influencers:

    Influencers include those who play persuasive role in the decision making process. These people are therefore informed people and they try to affect the decision making through their shared vision and approach. The influencers can be formal like marketing personnel, businessmen etc. The influencers can also be informal like family members, friends etc.

  5. Initiator:

    Initiators are the people who recognize the need that required to be satisfied. Therefore they raise demand for particular goods and that demand is taken into consideration by the purchaser. This way the initiator starts the process of considering purchase of particular goods or services.

  6. Gatekeepers:

    Gatekeepers are those individuals who could either stop or initiate the process of purchase. They could hamper the purchase or even promote the purchase as the case may be. The work of gatekeepers are mostly done by parents in the family who earlier try to access the need of particular goods and later take the decision of buying or not to buy.

Extent of success for the research approach:

It is expected that this research approach that is DMU will give a complete understanding of how the family units make purchase. To be more specific, Claritas is the approach that is much closer to reality. This approach helps in making correct predictions and outcomes. The case study gives the example of Jones family in which the correct data base was collected. The research was made on daily basis by the researcher who lived with for few days. He observed all the decision making process made by Joneses and compared it with the earlier inputs made by them. In this process, the Jones family was compensated with $100 on daily basis for the trouble. The result outcomes were completely different from that of earlier research. That is in earlier research it had inputs that the Joneses like to buy antiques, but the result of this research proved that Jones family was occasionally buying homes or antiques or antique books. Also it was claimed in the earlier results that the Jones family like to gardening, eating out, traveling and even DIY. This claim was however proved correct. Finally the database of earlier research claimed that the family would likely to own a Ford or Renault car, however the truth was that they already owned these cars. Mrs Jones had a Ford car and Mr Jones had a Renault.

This proved that the inputs made by other research methods are not always correct. They vary from people to people, the state of their mind and their personal attitudes. Thus the Claritas research approach is the best approach. However it is difficult to get permission to live along with a family for full time and would require lot more investment like in the case of Jones family it was $100 per day and that too for quite many days. Hence we can conclude that this approach will give a complete understanding of how family units make purchase, even if it has various hardship to move along for the researcher and the family unit.

2.) Possibilities through market segmentation:

Through this approach of the study of buyer behavior, various market segmentation possibilities are opened. The market segmentation is actually a process of subdividing the broad consumer market into potential and existing consumers. The basis of difference between different characteristics are common interest, needs, lifestyles, shared vision etc. This way the attempts are made to frame a yield segment and concentrate on that so that long term benefits and gains can be secured for the organization. The different says of segmentation includes Business to Business, Business to consumer and others. The Second segmentation kind that is business to consumer is the one taken into consideration through this buyer behavioral approach. This approach takes into account the different segments such as demographic, lifestyle, behavior, age, gender etc. The main idea is to access the customer and divide them into various fractions so that strategies could be applied depending on the various needs of the customers.

The different bases of segmentation applied under this research are stated as follows.

  1. Demographic:

    Under this the quantifiable population are taken into consideration and divided on the basis of age, gender, income and various other related groups. The grouping or segmentation is made between young and old, male and female, single income and double income group etc.

  2. Geographic:

    Under this segmentation process the population is divided under physical location or region. For instance country, state, city, region etc. The segmentation can be made between people living in city and people living in remote regions, national and international etc.

  3. Psychogrpahics:

    Under this segmentation the division of population is made on the basis of lifestyle, personalit and social group. The example of psychographics based segmentation is socially aware and less aware, traditionals, conservatives and progressive etc.

  4. Behaviroal:

    Under this segmentation the division of population is made on the basis of user behavior. This include needs based, usage and customer loyalty. The example of behavioral approach is technical advanced people and lesser educated people, leaders and followers, price conscious and quality conscious etc.

  5. Situational:

    The segmentation made under situational factor include the situation from the customer is passing through. For instance if the customer is actively shopping because of low price sale, promotion and other reason.

This way the ethnographic approaches are becoming more popular than other methods of research as they give more near to reality outcomes. These research shows what actually is the cause behind decision making.

Market segmentation:

The market segmentation has opened various new possibilities for the purpose of studying buyer behavior. These are stated as below.

  1. Customer behaviors on purchase can be accessed efficiently. The cause behind the purchase decision or not making the purchase can both be accessed through this method.
  2. Latest trend can be understood through the segmentation of the research. The trend that is prevalent in youth or old age people can be identified and the appropriate provisions could be made to meet the changing demands of the customers.
  3. New technological inputs that are prevalent will be identified. That is the use of latest technology latest technology in products and services that is attracting customer interest will be recognized. This way the businesses will be able to apply these technological inputs to maintain the flow of customers to their business as well.
  4. Problems with sale could be identified. That is the issues that are hindering the process of sale are identified through this method. This way the factors that affect the buyer behaviors will be identified and appropriate on timely action can be taken to overcome these problems.

3.) Critical analysis of scope of research:

The scope for expanding this type of research as a means of learning more about buyer behavior includes the followings.

  1. Environmental level:
    1. Technological innovation:

      The research could help the business that it could be in a position to upgrade its business process and products to meet the demands of the customers.

    2. Competitor analysis:

      The research could offer the businesses with the information about the competitors and their products. This way strategies can be formed to fight back competition in the market.

    3. Industry analysis:

      Research could help the business get the industry analysis which helps in understanding the latest industry trends so that the business could make changes accordingly.

    4. New market entry:

      Research could make the businesses get aware of new market entry who are affecting the sale proceeds of the business. This ay proper plan of action could be framed to fight back competition with the new entrants.

    5. New product development:

      Research could suggest that the new product development could be done by the business which could bring back the customers or affect their purchasing decision in future.

  2. Organizational level:
    1. Human Resource management:

      The research would suggest that the development of human resource could be done according to the needs of the business.

    2. Finance:

      The research would signify the requirement of the finance can be identified which are required to improve product and stage them before customers so that their purchase decision can be affected.

    3. Production:

      The research would suggest review of the production process will be made and the priorities will be set for change that could help the business achieve long term benefits and gains for the organization.

    4. Organizatonal effectiveness and success:

      The research could help in achieving organizational effectiveness and success. The various loopholes and drawbacks can be identified and attempts could be made to remove them.

  3. Marketing level:
    1. Product:

      The research could help in reviewing the product outcome and make changes as required to affect the purchase decision of the customers. This way proper renovation of the product and production process could be achieved which will help in achieving customer priority.

    2. Price:

      The research could help in fixing the price of goods and services such that the competitiveness in the market could be maintained. This way customers could prefer company products and services before other products.

    3. Place:

      The research could help in placing the products in such an attractive way in the market so that more and more customers can be attracted to the business. This will include placing of the products at prime locations so that it comes under reach of common people.

    4. Promotion:

      The research could give away ideas of promotion that could help the product come under observation and interest of people. This way various promotional activities that could affect the decision making are selected.

    5. Sales:

      The research could help in identifying the reasons for purchase made by the customers. Therefore efforts could be made to fulfill the customer needs so that the desired level of sale proceeds could be attained.

    6. Customer:

      The research could help in understanding the customer trends, preferences and tastes. This way the products could be developed and introduced in the market conveying that it could fulfil particular needs of the customers.

Critical analysis:

Critics are however of the view that it is complete over dependence over the research process. The research may showcase various inabilities. It cannot give figures and factual outcomes like quantitative research. Rather it is just like another qualitative research where in extra efforts are made to fetch the desired information. The research could even get distorted by the personal thoughts of the researcher who may interpret the results as per his knowledge and skills. Critics are also of the view that this research process is narrow based. That is only few families or groups are taken into consideration. However there is still big target population available.

Critics are also of the view that it is more time consuming method. That is it takes around day and weeks to come to final conclusion. Moreover this research method is costly. That is the researchers have to pay huge for staying together with the family and note down various factors.

Critics are of the view that this research is more like suffering not only to the researcher but also for the selected sample. That is the selected population and the researcher has to bear the presence of unknown people around them. The researcher has to stay calm while the families have to suffer from different kinds of sufferings with the presence of unknown person near them, taking note of their day to day proceeds and noting down their privacy.

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