P a g e |2 Vol. 10 Issue 2 (Ver 1.0), April 2010 Global Journal of Management and Business Research Analytical Hierarchy Process for Higher Effectiveness of Buyer Decision Process 1 GJMBR Classification Razia Sultana Sumi FOR: 150501, 150502, 150505 & 150503 Golam Kabir2 GJEL: D11 Abstract- Buyer decision processes are the decision-making tages of the Buying Decision Process: Smart companies will processes undertaken by consumers about a potential market immerse themselves in trying to understand the customer‘s transaction before, during, and after the purchase of a product overall experience in learning about a product, or service. More generally, decision-making is the cognitive making a brand choice, using the product, and even processes of selecting a course of action from among multiple disposing of it. Market scholars have developed a ―stages alternatives. How many evaluation criteria a consumer will model‖ of the buying decision process. The consumer passes use, what different types of criteria will be considered and how much importance will be placed on each of them depends on through five stages: problem recognition, information the consumer himself and the product consideration. The search, evaluation of alternatives, purchase decision and Analytical Hierarchy Process (AHP) is a multi criteria post purchase behavior (Kotler, 2006). decision-making process that is especially suitable for complex Problem Recognition: The buying process starts when the decisions, which involve the comparison of decision elements, buyer recognizes the problem or need. The need can be which are difficult to quantify. The crux of AHP is the triggered by external or internal stimuli. Marketers need to determination of the relative weights to rank the decision identify the circumstances that trigger a particular need. By alternatives. In this study, it has been identified that through gathering a number of information from a number of using AHP model consumers can evaluate the product customers, marketers can identify the most frequent stimuli attributes differently from simple evaluation criteria. AHP process described an effective buying decision by finding out that spark an interest in a product category. They cam the effectual attributes of different alternatives. develop marketing strategies that trigger consumer interest. Keywords:Analytical hierarchy process, Buying decision Information Search: An aroused customer will be inclined to process, MCDM, Purchase behavior search for more information. The relative amount and the influences of the information sources vary with product I. INTRODUCTION category and the buyer‘s characteristics. Each information sources perform a different function in influencing the onsumer buying behavior is very complex and it may buying decision. Through gathering information, the C vary greatly across different types of products and customers learn about competing brands and their features. buying decisions. Consumers use different criteria and Evaluation of Alternatives: There are several decision attributes in the decision process especially in the evaluation evaluation processes, the most current models of which see stage. Analytical Hierarchy Process (AHP) is such a tool the process as cognitively oriented. Consumers vary as to that can be used to evaluate buyer decision process more which product attributes they see as most relevant and the effectively and efficiently. importance they attach to each attributes. They will pay the Buying Decision Process: Consumer buying decision most attention to attributes that deliver the sought benefits. produces an image of an individual carefully evaluating the Purchase Decision: In the evaluation stage, the consumers attributes of a set of products, brands, or services and form preferences among the brands in the choice set. The rationally selecting the one that solves a clearly recognized consumer may also form an intension to buy the most need for the least cost (Hawkins, 2007). Marketers have to preferred brand. Attitude of others and unanticipated go beyond the various influences on buyers and develop an situational factors can intervene between the purchase understanding of how consumers actually make their buying intension and the purchase decision. decisions. Specially, marketers musty identify who makes Post purchase Behavior: After purchasing the product, the the buying decision, the types of buying decisions, and the consumer will experience some level of satisfaction or steps in the buying process. dissatisfactions. The marketer‘s job does not end when the _______________________________ product is bought. Marketers must monitor post purchase About1st Department of Industrial and Production Engineering, Bangladesh University of Engineering and Technology (BUET), satisfaction, post purchase actions and post purchase product Bangladesh use. About 2nd Department of Business Administration, Stamford University E-mail: ([email protected]) Problem Information Evaluation of Purchase Post purchase Recognition Search Alternatives Decision Behavior Global Journal of Management and Business Research Vol. 10 Issue 2 (Ver 1.0), April 2010 P a g e | 3 Figure 1: Five-Stage Model of Consumer Buying Process The AHP is a comprehensive framework when design of the hierarchy and the evaluation of the multiobjective, multicriterion and multifactor decisions are components in the hierarchy (Saaty, 1980 and Vargas, made. In this paper, AHP is used to increase the 1990). effectiveness of the concept of buying decision process. The Analytical Hierarchy Process (AHP) is a multi criteria This method was applied to clarify the concept of buying decision making process that is especially suitable for and to focus the strategy to the most essential issues. complex decisions which involve the comparison of decision elements which are difficult to quantify. It is based II. LITERATURE REVIEW on the assumption that when faced with a complex decision The Analytic Hierarchy Process (AHP) is a multi-criteria the natural human reaction is to cluster the decision decision-making approach and was introduced by Saaty elements according to their common characteristics. It is a (1977). The analytical hierarchy process (AHP) has proven technique for decision making where there are a limited to be a useful method for decision making (Saaty 1980). The number of choices, but where each has a number of different AHP has attracted the interest of many researchers mainly attributes, some or all of which may be difficult to due to the nice mathematical properties of the method and formalize. It is especially applicable when a team is making the fact that the required input data are rather easy to obtain. decisions. It involves building a hierarchy (Ranking) of The AHP is a decision support tool which can be used to decision elements and then making comparisons between solve complex, unstructured decision problems (Partovi, each possible pair in each cluster (as a matrix). This gives a 1994). It uses a multi-level hierarchical structure of weighting for each element within a cluster (or level of the objectives, criteria, sub criteria, and alternatives. hierarchy) and a consistency ratio (useful for checking the Some of the industrial engineering applications of the AHP consistency of the data). include its use in integrated manufacturing (Putus, 1990), in The crux of AHP is the determination of the relative weights the evaluation of technology investment decisions (Boucher to rank the decision alternatives. Assuming that there are n and McStravic, 1991), in flexible manufacturing systems criteria at a given hierarchy, the procedure establishes an n × (Wabalickis, 1998), layout design (Cambron and Evans, n pair-wise comparison matrix, A, that reflects the decision 1991), location planning of airport facilities and maker‘s judgment of the relative importance of the different international consolidation terminals (Min, 1994), large and criteria. The pair-wise comparison is made such that the complex project such as the ―Silverlake Project‖ (Bauer et criterion in row i (i = 1,2,3,....,n) is ranked relative to each of al, 1992), software development (Finnie et al, 1993), the criteria represented by the n columns. Letting aij define supplier selection (Iqbal, 2004), selection of alternative the element (i,j) of A, AHP uses a discrete scale from 1 to 9 communication media (Quamruzzaman, 2002) and also in in which aij = 1 signifies that i and j are equally important, other engineering problems (Wang and Raz, 1991). It can be aij = 5 indicates that i is strongly more important than j and applied to contribute understanding in various types of aij = 9 indicates that i is extremely more important than j. decision problems (Arbel and Orhler, 1990; Hämäläinen, Other intermediate values between 1 and 9 are interpreted 1990; Srinivasan and Bolster, 1990;). correspondingly. For consistency, aij = k automatically implies that aji = 1/k. Also all the diagonal elements aii of A A. Theory of Analytical Hierarchy Process must equal 1 because they rank a criterion against itself. The The Analytical Hierarchy Process (AHP) organises the basic relative weights of criterion can be determined from A by rationality by breaking down a problem into its smaller dividing the elements of each column by the sum of the constituent parts. By decomposing the problem, the elements of the same column. The resulting matrix is called decision-maker can focus on a limited number of items at normalized matrix, N. the same time. The