Consumer decision making process

Consumer decision making process

Marketers have always been interested in understanding consumer behavior. Specifically, they have been interested in the understand consumer’s decision making processes.  After four classes of the course, I’m sure you understand now that this is a very complicated subject matter to grasp. Whenever dealing with something very complicated, we try and make it break it into smaller pieces and handle them one piece at a time. The same applies for the consumer decision making process. After a lot of debate over the subject, marketers today agree that there are 5 stages in this process. They need recognition, information search, evaluation of alternatives, purchase decision, and post-purchase behavior. While these terms are very self explanatory, it’s important that we delve into each of these ideas in somewhat greater detail. So, let’s begin!

1. Need Recognition: The Spark of Desire

Imagine you’re lounging on your couch, scrolling through your social media feed. Suddenly, an ad pops up for a sleek, new laptop. Your current one is slow and clunky, and voila! You’ve just recognized a need. This is the first stage of the consumer decision-making process.

Just like many other things, there is much debate around the idea of ‘creating needs’. Some scholars believe that needs are intrinsic to human nature and cannot be artificially created. According to this view, needs are inherent and stem from basic human desires such as hunger, safety, and social belonging. These needs are always present, and the role of businesses and marketers is to identify and satisfy them through their products and services.

For instance, Maslow’s Hierarchy of Needs outlines a range of fundamental needs, from physiological needs like food and water to higher-level needs like self-actualization. According to this perspective, marketers can only tap into these existing needs rather than create new ones. When a consumer buys a new smartphone, they may be satisfying a need for communication, connectivity, or social status – needs that already exist within them.

Others believe that marketing and advertising can indeed create perceived needs. This perspective suggests that through strategic messaging and branding, companies can make consumers believe they need something they previously did not consider.

For example, the introduction of smartphones with high-quality cameras has made many people feel the need to document their lives with professional-quality photos. Similarly, fashion brands often create new trends and styles, leading consumers to feel a need to update their wardrobes regularly to stay fashionable.

By highlighting the benefits, exclusivity, or social status associated with a product, marketers can create a perceived need that prompts consumers to make a purchase.

This argument is supported by the idea that human desires are malleable and can be influenced by external factors. By highlighting the benefits, exclusivity, or social status associated with a product, marketers can create a perceived need that prompts consumers to make a purchase.

As good marketers, we can listen to each side of the argument and make an informed decision when the time arises. But then, regardless of which way we lean, we can agree that the trigger that makes us feel the need can be internal or external. For instance, hunger, thirst, or the realization that your old laptop is slowing you down are all internal triggers. That flashy ad, a friend’s recommendation, or seeing someone with the latest model of the iPhone is obviously an external trigger. 

Whenever these triggers happen, we are faced with a realisation - a realisation that there is a gap between your actual state and your desired state.

Now, let’s move to the next stage - Information Search. 

2. Information Search: The Detective Work

Now that we’ve recognized our need, it’s time to do some detective work. This is where we gather all the info you can about potential solutions from a variety of sources. This could be asking friends, family, or colleagues who might have recently bought a laptop (personal sources), Ads, brochures, and those endless email newsletters you signed up for (commercial sources), Reviews in magazines, websites, and tech blogs (public sources) or Actually testing the laptops in stores (or at least dreaming about it) (experiential sources). 

Some researchers break it down further into internal and external searches. You might rely on past experiences (internal) or look up reviews and ratings online (external). 

This particular aspect comes in handy when we are interested in repeat purchases. If we are interested in making a repeat purchase, chances are, we will not indulge in information search to the same extend as a new purchase. You will discuss this topic in greater detail when you study the B2B courses (straight and modified rebuy situations). 

3. Evaluation of Alternatives: The Decision Showdown

Now that we have gathered all the information that we require, It’s time for us to compare the alternatives that we have identified. 

At this stage, we typically use Criteria (such as Price, quality, features, and maybe even how cool it looks) and Decision Rules (You might use compensatory rules (weighing pros and cons) or non-compensatory rules (deal-breakers)). 

Recall the understanding that you have of the three types of goods here - shopping goods, search goods, and credence goods.

Shopping Goods are items that consumers spend considerable time comparing based on various attributes like price, quality, and style. For instance, when buying a new smartphone, you might compare different models, brands, features, and prices before making a decision. Shopping goods require a more thorough evaluation because the purchase is often infrequent and involves higher costs or personal significance.

Search goods are products or services that consumers can evaluate before purchasing. Characteristics of search goods are easily accessible through online reviews, descriptions, or by examining the product in a store. Examples include clothing, electronics, or appliances. Consumers can gather substantial information about search goods, making it easier to compare alternatives and make an informed decision.

Credence goods are more complex because their qualities cannot be easily evaluated even after consumption. Examples include services like car repairs, medical procedures, or financial advice. For credence goods, consumers often rely on the reputation of the provider, recommendations from others, and professional certifications. Evaluating alternatives in this category is challenging, and trust plays a significant role in the decision-making process.

By understanding these different types of goods, we can tailor our evaluation process to suit the nature of the product or service we are considering. 

When comparing alternatives, the type of good you’re evaluating influences the approach you take:

For shopping goods, you might visit multiple stores, read reviews, and consider factors like warranty and after-sales service.

For search goods, you can rely heavily on online information, reviews, and product specifications.

For credence goods, you may need to seek advice from trusted sources, consider the provider’s reputation, and evaluate their credentials carefully.

By understanding these different types of goods, we can tailor our evaluation process to suit the nature of the product or service we are considering. 

4. Purchase Decision: The Final Countdown

We’ve done our homework, and now it’s time to make the big decision. Various factors influence the purchase decision, and understanding these can help us make more informed choices.

Types of Purchases

Planned Purchases: These are items you knew you needed and have been actively researching. For example, buying a new laptop because your old one is broken.

Partially Planned Purchases: You knew you needed something but hadn’t decided on the exact product. For instance, knowing you need a new phone but choosing the brand and model at the store.

Impulse Purchases: These are spontaneous decisions made on the spot, often triggered by emotions or special promotions. Like grabbing a chocolate bar at the checkout counter.

Influencing Factors

Availability: The product’s availability can significantly impact your decision. If your desired item is out of stock, you might settle for an alternative.

Store Environment: A pleasant store environment, attractive displays, and a comfortable shopping experience can nudge you towards making a purchase.

Sales Assistance: The charm and expertise of a persuasive sales assistant can play a crucial role in swaying your decision, providing insights or recommendations that tip the balance.

Some scholars suggest that even after all that thorough evaluation, the final decision can still be influenced by last-minute factors. These can include a sudden discount, a limited-time offer, or simply a positive interaction with store staff. Even the presence of other shoppers can create a sense of urgency or competition, pushing you towards making a quicker decision.

Understanding these nuances helps us realize that while planning and evaluation are critical, the actual purchase decision is often a blend of rational thinking and situational influences. By being aware of these factors, we can better navigate the final step of the consumer decision-making process and make choices that truly satisfy our needs.

Post-Purchase Behavior: The Aftermath

You’ve made the purchase, but the journey doesn’t end there. Now comes the crucial stage of post-purchase evaluation, where you assess whether you’re truly satisfied with your decision.

Customer Satisfaction: This involves reflecting on whether the laptop meets your expectations in terms of performance, features, and overall value. Are you happy with your choice, or does it fall short?

Cognitive Dissonance: This is the feeling of second thoughts or buyer’s remorse that can creep in after making a purchase. You might wonder if you made the right choice or if another product might have been better.

Feedback and Reviews: At this stage, many consumers share their experiences online, whether it’s a glowing review praising the product or a critical rant highlighting its flaws.

Some scholars also suggest that product disposal behaviour, recycling and other aspects are also covered in this stage. 

It is clear that post-purchase evaluation is crucial for future purchasing decisions. A positive experience can foster brand loyalty, making you more likely to choose the same brand in the future. Conversely, a negative experience can lead to a vow never to buy from that brand again. This stage not only affects your future choices but also influences potential buyers who read your feedback. Thus, the post-purchase phase plays a pivotal role in shaping consumer behavior and brand perception, and marketers leave no stone unturned to ensure that the consumers have a great post purchase experience. 

Conclusion

We have now journeyed through the intricate stages of the consumer decision-making process: need recognition, information search, evaluation of alternatives, purchase decision, and post-purchase behavior. Each stage is crucial, offering marketers insights into how consumers make choices and how best to influence those choices.

Understanding these stages not only helps businesses tailor their marketing strategies to better meet consumer needs but also empowers consumers to make more informed decisions. Whether it’s recognizing the subtle influences that create perceived needs or navigating the myriad sources of information available, being aware of this process can lead to more satisfying and rational purchasing decisions.

As consumers, we can use this knowledge to be more mindful of our choices, ensuring that our purchases truly align with our needs and desires. For marketers, this understanding fosters more ethical and effective marketing practices that enhance consumer satisfaction and loyalty.