Q.
a) Elaborate on the four (4) major buyer's characteristics which influence the buyer's decision process in buying any property. (20 marks)
b) Clarify any two (2) stages in the process of adopting a new product. (5 marks)
(25 marks, 2017 Q7)
A.
a) 4 major buyer's characteristics
(Remarks 14 Jul, 2018 - with input from Angie Ng)
Before answering the question, there is a need to analyze the question. This question asks about characteristics of buyer which influence his decision to buy. It does not ask for the decision process. It should however, be discussed within the framework of how a consumer goes through a decision process. This process consists of up to five stages:
- Stage 1: problem recognition,
- Stage 2: information search,
- Stage 3: evaluation of alternatives,
- Stage 4: purchase decision,
- Stage 5: post purchase behaviour.
Ref:
Wikipedia, "buyer decision process" available at
https://en.wikipedia.org/wiki/Buyer_decision_process
(Original answer below)
Buyer characteristics can be as shown below.
Consumer’s buying behaviour is influenced by four major factors:
1) Cultural;
2) Social;
3) Personal;
4) Psychological
In such description of the decision making of buyer when buying a property, it is like a kid who wants to play games.
A playful kid (a naughty boy) would choose to play "Mortal Kombat" but a little girl may be more fond of "Plant vs Zombie". The character of the kids which determines the choice of Mortal Kombat or Plant vs Zombie would be 'gender type'. This can be cultural or personal, being biological different between boys and girls.
So, the characteristics of a buyer which influence his choice of property would be as below:
1. Income, investment appetite - Personal Preference
2. Status in society - professionals and education - Social
3. Needs like security & safety - Psychological
4. Active lifestyle, gym, sweat club, sports - Social/personal
5. Fengshui, staying with big family (extended) unit - Cultural.
Therefore, these Personal, Social, Psychological and Cultural characteristics of a buyer would shape his preference before he makes a selection. He will first identify the types properties which fulfill his profile, and next compare them to find the best fit.
Location, being a key determining factor in property, may lure him to forgo some of the prerequisites like psychological or cultural factors. They are not as significant as the location factor of the property.
The above phenomenon is in fact under the influence of the property developer/seller. The crucial point is buyer's characteristics on decision making is influenced by the seller to forgo some important considerations as a trade off with some special offers by the seller.
Another example is developer launching projects with rebate and discounts for units which are not so favourable (Cultural - Feng Shui). On the other hand, if developer has truly a piece of auspicious land, then the marketing target can utilize this benefit for buyers with cultural preference for auspicious land. In this way, it is like performing segmentation using the variable "Feng Shui".
Understanding the characteristics of some buyers is important to tailor the marketing strategy to a focus group. Below are examples:-
1. Left over ground floor of condo next to lift lobby. Psychological factor - some buyer just have fear of height and do not mind noise as they are lonely.
2. House "haunted". Psychological factor - some religious group/race does not mind, or it can be used as hostel for labourers.
3. Semi-D big compounds with snakes. Personal preference - dog lovers who keep dogs and maintain garden for pets.
Ref:
Earlier posts.
Own account.
b) 2 stages in adopting new product
Adopters of new products have been observed to move through the following five stages.
The consumer becomes aware that there is a new product available but lacks detailed information about the product.
The consumer is interested in the new product and actively seeks out information regarding product features and availability.
4. Trial:
The customer tries out the new product to test assumptions regarding the product. The trial can be a trial purchase, a test drive, or a trial at a shop.
Now, the customer takes the decision to make full and regular use of the product. The new product makers should ponder on the question—at which stage of this process, are they likely to find the bulk of their customers-and then they should try to facilitate the movement of their customers through the stages.
For example, if a maker of a video game console finds that buyers are aware of the product but are unwilling to make a large financial commitment, the manufacturer should consider offering trial-use plans with an option to buy.
Factors influencing the adoption of a product can be divided into two parts. On one hand, it depends on the characteristics of the individual, and on the other hand, it depends on the product itself.
[In property, new product like new shopping mall might engage this type of strategy as well. A trial period of 3 months without committing to the tenancy agreement, thereafter, a 2 years tenancy contract for those interested.
The first part is allowing "trial" which is awareness, interest, evaluation & trial. The second part is "Adoption" which is committed to a 2 year tenancy period for a new shopping arcade.]
Ref: