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Explain and analyse of the stages of the customer decision making process for insurance policies using a visual map demonstrating the path to purchase insurance policies and understand the consumer decision making
Understanding the decision-making process of consumer help organisations recognize the challenges and opportunities. It is very crucial for marketers to align with the steps undertaken by the consumers along with the efforts of the marketers. Consumer decision making involves five basic steps when it comes to purchasing an insurance policy.
This is the basic step in the consumer decision making procedure where the need for the product and service is identified. Need is the most crucial aspect when it comes to making any purchasing decision of the service and product. Basically, need is considered the driving force or the trigger point in all buying decisions of insurance (Pradhan, 2018). Recognizing the need of the consumer is a milestone for an insurance organisation that help them to evaluate and analyse the entire consumer decision-making process. Comprehension of the need and wants of the target market helps organisations support the decision of marketers.
When potential consumer recognizes their needs and wants, in the second stage, consumer try to know more about the insurance product or service via making searches and gathering data. Humans tend to be sceptical when it comes to choosing between different alternatives (Kanagal, 2016). Hence, before spending money consumers prefer to gather information to make an informed decision while buying insurance. In this phase, the potential consumer evaluates all the advantages and disadvantages of the product. With the constantly evolving trends and online shopping sites, customers are now more informed which helps them to make judgments. This information can be collected from various sources including electronic media, reviews from the people and from prints (Ashman, Solomon and Wolny, 2015). As making purchasing decision is important, consumers tend not to be hasty in terms of collecting information regarding the available brands in the marketplace. Apart from the mentioned sources, this information is gathered from personal contacts, printed sources, prior purchase experiences and commercial information sources, such are, TV ads, salespeople, public displays etc (Carpenter and Yoon, 2015). Marketers can make use of the search data generated by consumers’ information search so that they can use it for SEO and boost the conversion rates of their companies.
This stage is emphasized when the customer has recognized their need and has understood the source of satisfying the need. In this stage, customers focus on valuating different options available in the market, based on product quality, price and value-added features and other significant aspects. In terms of making purchasing decisions regarding the product which will satisfy the need of the customers, customers tend to compare the price and evaluate the consumer reviews (Willman-Iivarinen, 2017). This is the third stage of the consumer decision-making process where the consumers carefully evaluate all the substitutes. After the process of recognizing a need and gathering necessary information about the insurance, opt for the best insurance available in the market depending upon their income, need, preference and key features the customers wish for and expect when they search for alternatives. This data can help marketers to showcase these features and create a more convincing marketing strategy which would ensure that the customers do not even have to look for alternatives when they come across its services.
After going through all the stages mentioned above, consumers finally decide what to buy and from where they want to buy the insurance. After evaluating all the facts and figures, the consumer comes to a logical decision in order to purchase insurance depending on the need and want of the consumer (Kumar et al., 2018). These needs of the consumers are often found to be triggered by marketing campaigns, advertising and personal. The marketers need to consider the points which actually convinced the consumers to make the purchase, despite the presence of the alternatives, so that they can highlight the same even more in their next plans and strategies.
Post Purchase Evaluation
This is the last and final stage of the decision-making procedure of insurance purchase, where the consumers analyse the usefulness of the insurance, satisfaction offered by the insurance, and value of the product based upon the level of consumer need fulfilment. If the consumers feel satisfied after the purchase of the product bought, they will become loyal customers and will prefer to buy that product in the first place.
In the present context understanding, the process of consumer decision making has become more significant than ever as the blessing of globalization has driven organisations to garb the opportunity caused by the advancement of technology and globalization. The gathered information regarding how a consumer makes their purchasing decision benefits the Aviva marketers to make a consumer-centric marketing approach for successfully conducting their marketing campaigns. In addition to this, comprehension of the target market benefits Aviva marketers to enhance the efficiency of the marketing process for encouraging people to buy insurance which helps the marketers to bring up a more efficient marketing plan which yields a better result for Aviva insurance organisation.
Apply the relevant theories, concepts, and models to evaluate how marketers are responding to the stages of decision-making process
Consumers must first determine their needs, then obtain information, assess options, and then make a purchase choice. Economic and psychological variables impact consumer behaviour, which is influenced by environmental elements such as social and cultural values. The first phase, need identification, comes when a customer articulates their requirements precisely. Consumers may feel as though they are missing out on something and want assistance in filling in the gaps (Karimi, Papamichail and Holland, 2015). If Aviva can ascertain when its target market begins to acquire certain demands or desires, it may capitalise on the optimal time to advertise its brands (Ashman, Solomon and Wolny, 2015). The information search stage of the buyer choice process is always evolving as consumers want increasing amounts of information about items that meet their demands. Additionally, information may be gathered through recommendations from others who have had prior experience with a product. At this stage, customers examine risk management and compile a list of a brand’s characteristics. This is because the majority of consumers do not wish to repent their purchase (Rezaei, 2015). Aviva’s marketer should use this data to ascertain and comprehend the customer’s expectations, and make the necessary changes to streamline their marketing plan and come up with strategies which would certainly persuade the customers to opt for the company’s services instead of any other one.
The third step of alternative evaluation entails assessing the market’s available alternatives as well as the product’s lifetime. Once the buyer has chosen what would suit their demand, they will begin looking for the greatest solution available. This evaluation might be based on a variety of elements such as quality, price, or any other aspect that is significant to the client. They may check to price or read reviews before deciding on a product that best meets their criteria. When customers eventually make their buy choice in the fourth phase of the purchasing process, marketers must determine the many factors they studied and reviewed prior to making their purchase decision (Maniatis, 2016). Aviva’s marketers may use this data to optimise their marketing strategy and to enhance or adjust their products/offerings. They should pay attention to this aspect in that it is a fact that there is no scarcity of alternatives to the well-informed modern customers who are also technologically equipped. Therefore, AVIVA’s marketers need to optimize their marketing strategies to the maximum extent possible.
After making a purchase, the way customers share their feedback and spread it among their own circles of friends, relatives, acquaintances, and even on social media platforms should be analysed and recorded by Aviva’s marketers so that they can trace both the advantages and disadvantages of the purchased product or service from the customer’s perspective after making the purchase (Ashman, Solomon and Wolny, 2015). This information may then be used by Aviva’s marketers to address the concerns and promote the resolutions as their company’s strengths in subsequent marketing efforts. The marketers of Aviva should use the feedback shared by the customers, to bolster their marketing efforts and enhance the credibility of the same.
Thus, it is clear that knowing the customer decision-making process is critical for the marketing team of Aviva to identify marketing obstacles and possibilities. It is critical to link marketing activities with the stages customers take to make a purchase decision. This is true for both consumer and business-to-business products and services.
Compare and contrast the key differences of the decision-making process in the context of B2C and B2B
There are three fundamental differences that lie between B2C and B2B transactions, which are as follows:
When it comes to achieving their company’s objectives, B2B customers set their own requirements Consumers in both the B2B and B2C sectors begin the purchase process by identifying a need that they want to fill. According to Rklaitis and Pilelieni (2019), B2B clients of Aviva are more likely to define a requirement and seek a solution to address that requirement as part of their company strategy. Marketing and advertising materials that draw attention to new products can have an impact on B2C consumers in the same way that they have an impact on Aviva’s B2B clients. For example, without the promotion of Aviva, this may be used to fill a need that was previously undetected.
When it comes to B2B purchases, buyers look for products and services that meet specific needs, but B2C customers may be more ambiguous in their purchasing decisions. Customers of Aviva in the B2B sector are less likely to make impulsive purchases than their consumer counterparts. They become more logical in their purchasing decisions, and less impulsive as a result of this development. When it comes to making purchases, B2C buyers are more impacted by their emotions than B2B shoppers (Davidaviciene, Pabedinskaite and Davidavicius, 2017). Clients typically have a basic notion of what they want (or the ultimate result they want to achieve), but they rarely have specifics to work from. If another product or service becomes available that they prefer over the one they were considering, they will leave the one they were considering (Rudawska, 2019).
B2B clients place a high value on after-sale service. No of whether or not a consumer purchases a product, they expect a high quality of service from the company. It is critical for Aviva’s business-to-business clients to have exceptional service prior to, during, and after the transaction. B2C clients of Aviva, on the other hand, are more likely to call after-sales help only when they have a problem or complaint with their purchase (Nath, Saha and Salehi-Sangari, 2019). This may be influenced by characteristics such as their capacity to respond to and resolve the problem quickly, among other things. Even though it is beneficial, they are not as enthusiastic about obtaining supplemental resources such as manuals or emails as B2B clients are.
Following are some of the most essential ways to market research that firms may employ to understand decision-making processes in both B2C and B2B scenarios.
Marketers can assess a representative sample group using simple surveys. Larger samples yield more accurate findings. In-person surveys are one-on-one interviews performed in busy places like shopping malls. Telephone surveys are cheaper than in-person surveys but more expensive than mail. Mail surveys are a low-cost technique to contact a large audience (Panwar et al., 2019). They are cheaper than in-person and phone surveys, but only 3–15% of respondents respond. However, postal surveys are still an affordable option for small firms.
Because marketers can’t manage the pool of respondents, online polls provide variable response rates and incorrect data. But an online survey is a quick and easy method to acquire client feedback.
Focus groups are led by a moderator using a predetermined set of questions or themes. These meetings are held in neutral settings, frequently with videotaping equipment and a one-way mirror observation room (Kumar et al., 2018).
Personal interviews, like focus groups, offer open-ended questions. They are normally videotaped and last around an hour.
Individual survey and focus group replies don’t often match real behaviour. A firm can monitor how people buy or utilise a product by videotaping them in stores, work, or at home (Dehnert and Schumann, 2022). This provides the marketers a better understanding of the clients’ use and purchase behaviour.
Unexpectedly, the health of any economy is heavily influenced by the insurance business. As a result, insurance companies confront a fierce rivalry for new customers and new product lines. In order to remain competitive, insurance companies must place a high value on learning about their customers’ motivations and patterns of behaviour. They are always looking for ways to improve their offerings, whether it is by responding quickly to market changes or by turning their attention away from the bottom line and toward the needs of the customer.
The following factors have a substantial influence on customer behaviour and insurance selection:
Gender, age, and stage of life all have a big impact on buying decisions. Men and women have distinct product needs and p
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