Buying cycle

From CEOpedia | Management online

Buying cycle is the time needed for the potential buyer to make the decision to buy the item (from the moment the service/product is launched) until the purchase is made (Nasir S. 2015, p. 223).

Stages of buying cycle

Correct understanding the customer position at the buying cycle lets the organisation to develop effective and successful marketing strategies. According to Nasir Suphan, the buying cycle composes of three main stages as following (Nasir S. 2015, p. 223):

  • awareness
  • consideration
  • purchase

The first stage starts when the customers become aware of some goods (the brand or product) that they do not owe - they want to fulfill the need. The second stage begins when clients evaluate alternatives to fulfill their needs and later buy goods among alternatives (Nasir S. 2015, p. 223).

It is important to understand the stages of the buying cycle, because customers' expectations of how the company should treat in each stage, are different. In the early stage in the cycle, clients want to know more about products, want to get educated. At later stage - they may require highly responsive help to complete the purchase. If the company fulfil all customers' needs perfectly - the purchase is done (Nasir S. 2015, p. 223).

However, for companies, the buying cycle begins by defining corporate goals (for instance major cost reductions, competitive advantage or risk reduction) that can be supported by organization's relationships with suppliers, and also the steps it takes to secure the mentioned business relationships. This process ends with management of the contract (it should be mentioned that the end date of the current contract cannot be later than next buying cycle) (Buchanan M. 2008, p. 41).

The length of buying cycle

It is worth mentioning that the length of the buying cycle differs - it depends on the product or the service company offers. For instance, for low-cost consumer products (most typical clients), it can be few days, except when customers plan to buy larger (for higher price) purchases - this can take month. In other markets, this time is much longer - dor industrial equipment - six months or more, and for real estate - almost six years or even more (Ramos A., Cota S. 2009, p. 7).

Advantages of Buying cycle

The buying cycle provides a number of advantages to the buyer, including:

  • Increased understanding of the product or service - By going through the buying cycle, buyers can gain a better understanding of the product or service, allowing them to make a more informed and educated decision.
  • Opportunity to compare and contrast - Going through the buying cycle allows buyers to compare and contrast different products or services, helping to ensure that they are making the right choice.
  • Ability to negotiate - The buying cycle allows buyers to negotiate a better price or terms, helping to maximize their savings.
  • Reduced risk - Going through the buying cycle reduces the risk of buyers making a bad purchase, as they will be able to take the time to research a product or service and make an educated decision.
  • Improved customer experience - By going through the buying cycle, buyers can have a better overall customer experience, as they will be able to get the product or service that meets their needs.

Limitations of Buying cycle

The buying cycle has certain limitations associated with it, which are as follows:

  • Unpredictability: The buying cycle is unpredictable in nature due to many external and internal factors that can influence the length of the cycle. These factors can include the complexity of the service or product, the availability of funds, the competition in the market, and the customer's decision-making process.
  • Lack of Control: The buyer has little control over the buying cycle and is unable to influence the timing of the purchase.
  • Time Consuming: The buying cycle can be time consuming as it involves researching, comparing, and evaluating different services or products before making a decision.
  • Unstable Environment: The buying cycle is subject to changes in the external environment that can affect the decision-making process. These changes can include changes in the economic environment, the competitive environment, or the customer's needs and preferences.

Other approaches related to Buying cycle

The buying cycle is an important process to understand when trying to increase sales. Other approaches that can be used in addition to the buying cycle are:

  • Relationship building: Building relationships with potential customers is important in order to increase sales. This includes developing trust and understanding the customer’s needs and preferences.
  • Market research: Collecting and analyzing data from potential customers can help to better understand their needs and preferences. This can help to identify target markets, develop marketing strategies, and create products and services that will meet customer demands.
  • Product positioning: Positioning products and services in a way that appeals to the target market is key in increasing sales. This includes creating an appealing message, choosing the right distribution channels, and pricing the product competitively.

In summary, the buying cycle is an important process to understand when trying to increase sales. Other approaches that can be used in addition to the buying cycle are relationship building, market research, and product positioning.


Buying cycle — recommended articles
Brand value chain — Customer driven — Consumer sovereignty — Consumer orientation — Selling process — High involvement product — Functions of portfolio — Market for product — Goals of marketing

References

Author: Urszula Bochenek

Retrieved from "https://ceopedia.org/index.php?title=Buying_cycle&oldid=89999"