Consumer Decision Making Process: Analysis

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Consumer Decision Making Process: a detailed analysisPosted onJuly 6, 2013byJohn DudovskiyThe consumer decision making is a complex process with involves all the stages from problemrecognition to post purchase activities. All the consumers have their own needs in their dailylives and these needs make them make different decisions. These decisions can be complexdepending on the consumer’s opinion about a particular product, evaluating and comparing,selecting and purchasing among the different types of product. Therefore, understanding andrealizing the core issue of the process of consumer decision making and utilize the theories inpractice is becoming a common view point by many companies and people.There is a common consensus among many researchers and academics that consumer purchasingtheory involves a number of different stages. Depending on the different factors and findings,numerous researchers and academics developed their own theories and models over the pastyears. However, according to Tyagi and Kumar (2004), although these theories vary slightlyfrom each other, they all lead to almost the same theory about the consumer purchasing theorywhich states that it involves the stages of search and purchase of product or service and theprocess of evaluation the product or service in the post-purchase product.Five Stage Model initially proposed by Cox et al. (1983) is considered to be one of the mostcommon models of consumer decision making process and it involves five various stages. Thesestages are: recognition of need or problem, information search, comparing the alternatives,purchase and post-purchase evaluation. This simple model clearly illustrates and explains howthe consumers make a purchasing decision.Furthermore, Blackwell et al (2006) highlights the argument why this model is more precise andclear compared to the other similar models is that because this model’s core focus is onmotivational factors which helps the user to understand the reasons behind the purchasingdecision easier.Contents[show]1. Problem/Need Recognition
Recognition of need or a problem is the first stage of the model. According to Bruner (1993)recognition of a problem arises in the situation where an individual realizes the differencebetween the actual state of affairs and desired state of affairs. Neal and Quester (2006) furtherstate that the recognition of a problem or need depend on different situations and circumstancessuch as personal or professional and this recognition results in creation of a purchasing idea. Forinstance, consumer may recognize the need to buy a laptop when there is need to carry it use it indifferent places which is convenient compared to a desktop computer.Solomon et al (2006) classifies the human needs into two different categories depending on theirnature. The following categories are mentioned:psychologicalandfunctionalorphysicalneeds.The authors state that the psychological needs are the outcome of emotional feeling of consumerswhereas functional or physical needs are usually the results of necessity.According to Tyagi (2004) need recognition at various levels often occurs during the process ofencountering with the product at various circumstances. In other words, Tyagi (2004)convincingly argues that an individual might not be aware of the need for a specific product untilhe or she encounters with the product as a result of engaging in ‘window-shopping’, mediaadvertisements, or in a range of other circumstances.The human need has no limit therefore; the problem recognition is a repetitive in nature.According to Maslow theory, human being is always dissatisfied, when an individual’s one needis satisfied another one will come out and this trend continues repetitively.2. Information SearchThe next stage of the model is information search. Once the need is recognized, the consumer islikely to search more product-related information before directly making a purchase decision.However, different individuals are involved in search process differently depending on theirknowledge about the product, their previous experience or purchases or on some externalinformation such as feedback from others.Search of information process itself can be divided into two parts as stated by Oliver (2011): theinternal search and external search. In internal search, the consumers compare the alternativesfrom their own experiences and memories depending on their own past experiences andknowledge. For example, searching for fast food can be an example for internal search becausecustomers often use their knowledge and tastes to choose the right product they need rather thanasking someone for an advice. On the other hand, external search ends to be for bigger purchasessuch as home appliances or gadgets. For instance, consumers who wish to buy new furniture or amobile phone tend to ask friends’ opinion and advices or search in the magazines and mediabefore making a purchasing decision.Winer (2009) argues that with the enhancing role of internet in professional and personal lives ofpeople, increasing numbers of individuals are turning to various resources in internet whensearching for information about product categories or specific brands. The author specificallyhighlights the role of online user reviews and forums in terms of their significant impact uponinformation search stage of consumer decision making process among internet users.
Colleagues, peers, friends and family members are highlighted as another important source ofinformation by Kahle and Close (2006). Moreover, according to Kahle and Close (2006) thenature of influence of peers, friends and family members upon information search and consumerdecision making process in general depends on a range of factors such as the nature ofrelationships, the level of personal influence, the extent of ‘opinion leadership’ associated withspecific individuals etc.3. Evaluation of AlternativesAfter gathering enough information at the first stage the consumer gets into comparing andevaluating that information in order to make the right choice. In this stage the consumer analyzesall the information obtained through the search and considers various alternative products andservices compares them according to the needs and wants. Moreover, another various aspects ofthe product such as size, quality, brand and price are considered at this stage. Therefore, thisstage is considered to be the most important stage during the whole consumer decision makingprocess.Evaluation of alternatives have to include 4 P’s Marketing mix.If you askWhat is the marketing mix?Then in summary these 4 variables comprise theMarketing mix.1.Product – What the company is manufacturing?2.Price – What is the pricing strategy used by the company?3.Place – Where is the company selling?4.Promotions – How is the company promoting the product?TheMarketing mixis a set of four decisions which needs to be taken before launching any newproduct. These variables are also known as the4 P’s of marketing. These four variables help thefirm in making strategic decisions necessary for the smooth running of any product /organizationFurthermore, according to Ha et al (2010), the process of evaluation of alternatives cansometimes be difficult, time consuming and full of pressure for a consumer. This is because it isquite hard to find an ideal product or service that satisfies the needs of the customer as there arenumerous factors that hinder the consumer purchasing decision making process. For instance,when it comes to online hotel reservation or furniture purchasing evaluation process, it can bequite complex. Several factors and aspects need to be considered before making a purchasingdecision. Factors such as age, culture, taste and budget have all impact on the evaluation processby the consumer. For example, when purchasing a furniture, the young people consider thefactors such as convenience and price where as the old people are likely to consider the qualityand design.Moreover, celebrity endorsement is seen as another factor with great potential impact onevaluation of alternatives stages of consumer decision making process. Cant et al. (2010) explain
the effectiveness of celebrity endorsements with perceived greatness people associate with theiridols and the willingness and desire to become like their idols.4. Purchase DecisionOnce the information search and evaluation process is over, the consumer makes the purchasingdecision and this stage is considered to be the most important stage throughout the wholeprocess. In this stage, the consumer makes decision to make a final purchase as he or she hasalready reviewed all the alternatives and came to a final decision point. Purchased further can beclassified into three different types: planned purchase, partially purchase and impulse purchase(Kacen, 2002).Kacen’s view is further supported by Hoyer and Macinnis (2008) stating that there are a numberof factors that can affect the purchasing process. For example, the desired product may not beavailable at the stock. In this case the purchase process is delayed and consumer may considerbuying the product through online stores rather than visiting traditional physical stores.According to Wiedmann et al. (2007) department store sales assistants play in integral role interms of impacting consumer purchase decision in a positive way from a business point of view.At the same time Wiedmann et al. (2007) warn that this impact must not be done in a pushymanner, in which case it can prove to be counter-productive.5. Post-Purchase EvaluationThe final stage in the consumer decision making process is post-purchase evaluation stage. Manycompanies tend to ignore this stage as this takes place after the transaction has been done.However, this stage can be the most important one as it directly affects the future decisionmaking processes by the consumer for the same product. Therefore this stage reflects theconsumer’s experience of purchasing a product or service. This view is further supported by Ofir(2005) mentioning that the consumer decision making process is a repetitive action and a goodexperience is vital in reducing the uncertainty when the decision to purchase the same product orservice is considered the ext time.The opinions of peers, friends and family regarding the purchases made is specified as one of themost important factors affecting the outcome of post-purchase evaluation by Perrey andSpillecke (2011). This point is further expanded by Trehan and Trehan (2011), according towhom peer opinions regarding product evaluations tend to impact customer level of satisfactionregardless of their level of objectivity.Brink and Berndt (2009) also highlights the importance of the post-purchase evaluation stage.According to the authors, the consumer may either get satisfaction or dissatisfaction dependingon the evaluation of the purchase and comparison of their own expectations. The outcome formsthe experience of the customer and it this experience is believed to have a direct impact on thenext decision of the consumer to purchase the same product from the same seller.
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