BUYING DECISION Flashcards
– a term used to describe the purchase or acquisition of an item or service that’s typically paid for via an exchange of money or another asset.
BUY
is the decision-making process used by consumers regarding the market transactions before, during, and after the purchase of goods or service.
BUYING DECISION PROCESS
the process of making choices that reflect your goals by considering all of the pros and cons along with the costs.
SYSTEMATIC DECISION MAKING
occurs when you plan your earning, spending, and saving so that you meet your financial goals.
FINANCIAL RESPONSIBILITY
– failing to live up your financial obligations to meet your goals and needs.
FINANCIAL IRRESPONSIBILITY
– is an organized method for making good buying decisions. It will help you stretch your limited resources.
BUYING PLAN
is the first step in the buying decision. Without knowing what the customer needs, they will not be enticed to purchased the product. The need can be triggered by internal stimuli (hunger, thirst) or external stimuli (advertising).
STAGE 1 - PROBLEM/NEED RECOGNITION
the customer research the product which would satisfy the recognized need. In this step you should also have criteria, timeline, and a spending limit as stated in the book.
STAGE 2: INFORMATION SEARCH
at this stage, consumers evaluate different products/brands on the basis of varying product attributes, and whether these can deliver benefits that the customers are seeking. This stage is heavily influenced by one’s attitude, as “attitude puts one in a frame of mind; liking or disliking an object, moving towards or away from it.”
STAGE 3: EVALUATION OF ALTERNATIVES
This is the stage where the purchase takes place. According to Kotler, Keller, Koshy, and Jha (2009), the final purchase decision can be disrupted by two factors: negative feedback from other customers and the level of motivation to comply or accept the feedback.
STAGE 4: PURCHASE DECISION
these stages are important to keeping customers. Customers match product with their experiences on whether they are either content or discontent with the product.
STAGE 5: POST-PURCHASE BEHAVIOR
– the ability to borrow money with the agreement to pay it back later. The repayment usually includes interest.
CREDIT
– the ability to borrow money with the agreement to pay it back later. The purpose of credit is to allow buyers to purchase items at the present time and pay for them in the future.
BANK CREDIT CARD
a source of consumer credit that has the ability to receive services and pay them later. (e.g Use of Electricity, Water or Sewer, and other Utilities.)
SERVICE CREDIT
a source of consumer credit is a preapproved amount that a debtor can borrow when needed. It is available through banks, credit card companies, and other lenders.
LINE OF CREDIT
a source of consumer credit where banks and other financial companies can loan money to consumers.
LOANS
5CS OF CREDIT
CHARACTER
CAPACITY
CAPITAL
COLLATERAL
CONDITIONS
AKA CREDIT HISTORY
CHARACTER
ASSESSES BORROWER’S DEBT-TO-INCOME RATIO.
CAPACITY
INDICATES THE BORROWER’S LEVEL OF SERIOUSNESS
CAPITAL
OFFERS ASSURANCE THAT IF THE BORROWER DEFAULTS ON THE LOAN, THE LENDER CAN REPOSSESS THE COLLATERAL.
COLLATERAL
FACTORS LIKE INTEREST RATE AND AMOUNT OF PRINCIPAL
CONDITIONS
delinquency means the failure to do what your duty or the law requires. When the term is used with regard to credit, delinquency means an overdue debt.
CREDIT DELINQUENCY
if payments on your credit account are overdue, your account may be turned over to a collection agency. Collection agencies have the right to represent the creditor to collect the amount due.
COLLECTING AGENCIES
– is a proceeding in which a creditor may legally take possession of money or goods held by a third party in payment of a borrower’s debt.
. GARNISHMENT
is the process of taking an asset used for collateral, such as a car, and selling it to pay debt.
REPOSSESSION
– is a legal proceeding a creditor can use when borrower does not make mortgage payments. The creditor may be able to force a sale of the property, Money from the sale is used to pay the mortgage.
FORECLOSURE
