Consumer Behavior

CONSUMER BEHAVIOUR : The five stage buying decision model

Problem Recognition of Consumer’s in Availing Services from Commercial Banking for Housing Loan.

The Buying Decision process of a Consumer depends upon the five stage model. They are

 Problem Recognition

 Information Search

 Evaluation of Alternatives

 Purchase Decision

 Post Purchase Behaviour

• Problem Recognition

The buying process starts when the buyer recognizes a problem or need triggered by internal or external stimuli. Loan could be availed for buying a house, flat or for construction on personal land.

The following Problems were recognized for availing the services of a Commercial Bank for a Housing Loan.

a) Needs : 1. Requirement of more space, 2. Migration, 3. Investment, 4. Better Living Conditions, 5. Social Status

b) Investments

c) Reconstruction of Existing Property.

• Information Search

At this level a person simply becomes receptive to information about a loan by looking for information from TV, Newspaper, Magazine Ads, Loan Fairs, Previous Borrowers, Organizations, Builders/Contractors, Bank Officials, Friends and Relatives, Agents, Direct Contact with Bank to learn about the Housing Loan.

The major information sources to which consumers will turn fall into four groups.

a) Personal - Family Friends, Neighbours, Acquaintances

b) Commercial - Advertising, Websites, Salesperson, Display

c) Public - Mass Media, Consumer Rating Organization

d) Experiential - Past Experiences and review

• Evaluation of Alternatives

There are several processes that influence the consumer in forming judgement largely on a conscious and rational basis.

Interest rates

Reputation

Processing Fees Switching Facility

EMI

Duration

Previous Experiences

Acquaintances

Adequacy of loans

Processing time of loan

Duration Margin Amount

Acquaintances Tax Benefit

Accessibility

Number of visits

Proximity

Other services

Prepayment

The above...