In this article we will discuss various terms and terminologies which influences buying decisions of consumers especially for financial products and services.
1.Consumer– A person who purchases goods and services for personal, family use.
2.Decision making is the process of making choices by identifying a need/want/desire, gathering information, and assessing alternative resolutions.
3.Difference between Need, Want & Desire
A need is something you cannot live without, such as air, water and food.
A want is something that you don’t absolutely need but will make your life a little better.
A desire is something you wish to have, regardless of your needs and wants
4.Difference between tangible and intangible products
A tangible product is a physical object that can be perceived by touch such as a building, vehicle, or gadget.
An intangible product is a product that can only be perceived indirectly such as Financial Instruments like insurance policy.
5.Four Parameters for Decision making of Financial Instruments
Since financial products and services come under the category of intangible things, the decision making process involves different considerations while buying financial products. Consumers unknowingly think about the below mentioned four parameters while deciding on financial products.
- Safety of the Product – The condition of being protected from or unlikely to cause danger or risk. Consumers first see the safety of their investable money.
- Security or brand value – the state of being free from danger or threat by examining brand value or the brand equity of manufacturing/ distribution houses.
- Returns– Profitability or gain from the investments
- Facilities– A facility is something such as an additional service provided by an organization or an extra feature on product/services which is useful but not essential.
