Consumer Behaviour: Analysis of Stages and Decision-Making Process

This project report analyzes the stages of consumer decision-making journey and the importance of understanding customer decision-making for marketers. It also compares the differences in decision-making process under B2B and B2C models and explores different approaches and methods of market research in B2B and B2C contexts.

Consumer Behaviour
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Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Analysis of stages of consumer decision-making journey for a product................................3
P2 Importance for marketers to map a path to purchase and understand customer decision-
making ........................................................................................................................................5
TASK 2............................................................................................................................................7
P3 Comparison of the key differences in decision making process under B2B and B2C using
specific examples.........................................................................................................................7
P4 Different approaches and methods of market research to understand the decision-making
process in both B2C and B2B contexts.......................................................................................8
TASK 3............................................................................................................................................9
P5 Evaluation of how marketers can influence the different stages of consumer decision-
making process in B2B and B2C by specific examples..............................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
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INTRODUCTION
Consumer behaviour refers to the resultant behaviour of a consumer in the process of
decision-making or buying a product or an service (Zhang, 2015). This project report aims at an
analysis of different stages of consumer behaviour along with the importance of understanding
consumer behaviour for the marketers is being done with an organisational context. The selected
company for the purpose is Climax Studios Ltd. which is a medium sized company involved in
development of online computer games. This project report also aims at evaluation differences in
decision-making process in B2B and B2C business models along with the various methods of
research used by marketers to understand and influence the process of consumer decision-
making in these business models.
TASK 1
P1 Analysis of stages of consumer decision-making journey for a product.
Consumer decision-making refers to the process by which an individual selects or chooses
the best product or service out of all of the available alternatives. There are a series of steps
which are involved in the process of consumer decision-making. In context of the Climax studios
ltd, the following stages in the process of consumer decision-making process have been
identified:
Need recognition: This step has been regarded as the most important step in the journey
of a customer decision-making. A process of purchase of goods and service never takes place
without an efficient recognition of need or problem. There are two factors which are responsible
for triggering need in an individual: internal stimuli based on internal factors such as hunger or
thirst or external stimuli based on external factors such as marketing or advertisement (Zhang
and Benyoucef, 2016). For example, due to advertising of computer games by Climax Studios
Ltd. and the internal need of customer related to entertainment works collectively in triggering
the need for computer games in individuals
Information search: After identification of a need or a problem, the next step in the
process of consumer decision-making involves market research and information collection by the
consumer to find out the best choice or the solution. For example, once a person identifies the
need or desire to play computer games, he will indulge in the process of obtaining information
such as the types of games available in the market and different price segments etcetera. Various
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sources such as advertisement, newspaper, brochures, print media etcetera may be used by the
consumer to obtain information related to the product or service he wishes to enjoy.
Evaluation of alternatives: In this step, a customer evaluates all the products and services
which are available in the market with respect to his needs. Consumer motivation and
enthusiasm is a factor which influence this step such as consumer having high enthusiasm will
evaluate as many alternatives as possible to find out the product which fulfils his needs to the
best capacity (Wolny and Charoensuksai, 2014). For example, a customer who wants to play
computer games will analyse all the available options such as different types of games for
different platforms and the price and then try to make a choice which is best-suited for his
requirements. There are a number of competitors which are dealing in computer games for
Climax studios ltd. such as Rockstar games, code masters etcetera which may as well have the
potential to fulfil the customer’s need.
Purchase decision: After going through the complete process of evaluation of all the
alternatives, a customer finally makes a purchase decision which he thinks will help in
satisfaction of his need. Purchase decision refers to deciding what brand is the customer going to
buy from which place and at what time and price. This decision is influenced by the belief of the
customer in the product’s potential to fulfil his needs. For example, a customer might make the
final purchase decision to buy a game which is being offered by Climax Studios Ltd. after
evaluation of all the alternatives because he has finally agreed to the product’s potential to satisfy
his requirements.
Post-purchase behaviour: This is the stage after the customer has made the purchase and
has used the product for some time. A customer might behave in two different ways after using
the product, either the product meets his expectation which results in brand loyalty, good
feedback and further future purchase by the consumer or the product doesn’t meet the customer
expectations which results in negative brand image due to poor feedback by the consumer and
loss of trust in the brand as a whole (Rani, 2014). Positive and negative feedback by the
customer is very crucial to influence future sales. In context of Climax Studios Ltd, a customer
may decide to buy another game by the same developer because he liked the graphics and user
interface or he may decide to try a game developed by some other brand.
These are the basic five steps which are involved in every decision-making by the
consumer and influence his final purchase decision. There are various theories to consumer
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learning. Consumer learning may be defined as a system which helps the consumer to obtain
experience and behaviour for a particulate consumption which they apply in future buying
behaviours. These theories can be classified into the following two categories:
Behavioural approach: This theory lays emphasis on the inputs and the outputs which are
the stimuli a person has been exposed to and the resultant buying behaviour. Classical theory of
behaviour approach says that in a situation where two stimulating factors are closely linked
which result in a certain buying behaviour, even if one of the factor is absent, the resultant
behaviours is expected to be the same (Murphy and Dweck, 2016). Observation theory of
behaviour suggests that a consumer also learns from the behaviour which he observes of other
people in his circle and this also tends to influence his behaviour.
Cognitive approach: This theory is more in relation with the process of a resultant
behaviour taking place due to consumer thinking. It aims at understanding the process of
information storage and how a customer stores, retrieves and collects information under various
circumstances (Mullen and Johnson, 2013). For example, according to hemispheral lateralization
theory, brain in split into two parts which are right & left and the right part of the brain stores the
information related to pictures and non-verbal commercials and the left part of the brain stores
verbal information. This theory helps in learning the behaviour of the consumer.
P2 Importance for marketers to map a path to purchase and understand customer decision-
making .
It is really important and crucial for the marketers of any organisation to understand the process
of consumer behaviour and know how the consumers purchase different products which leads to
a satisfaction of their needs (Lantos, 2015). It helps the marketers to better position their
products in the market using different marketing strategies to ensure better influence in the
process of purchase decision by the consumers. Here are some of the ways in which studying
consumer behaviour helps the managers and marketers of a firm or an organisation:
Product designing: It helps the firms to design a product which has every specification that
helps in the satisfaction of the needs of the consumer. Understanding consumer behaviour helps
in designing of the product with better feature as per the requirements.
Pricing strategy: The marketers of a firm are able to determine the price at which the customer is
most expected to buy the products of the organisation with the help of studying consumer
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behaviour and decision making process (Jisana, 2014). The price at which game developed by
Climax ltd. is determined only after an extensive market study of consumer behaviour.
Marketing strategy: Effective understanding of the consumer behaviour by the marketers
help them significantly in development of a marketing strategy which stimulates the consumer to
buy the product of the organisation and triggers a need within the customer. Better marketing
strategy is one of the advantages of understanding consumer decision-making process.
Better salesmanship: Understanding the knowledge of customer behaviour helps a
salesperson to adopt better techniques which influences the decision of a person to purchase any
product and thus ensure effective one-to-one personal sales.
Increasing sales: All the above mentioned benefits of understanding consumer behaviour
helps in increasing the sales of the product offered by the organisation. For example, the
marketing department of Climax Studios Ltd. can adopt a better distribution channel such as
online sales after understanding the influence of online advertisement on the purchase decision
of the consumer and thus increase the sales of the company.
There are different models or views of customer behaviour which helps the marketers to better
understand the decision-making process (Holbrook and Hirschman, 2012). Here is a brief
explanation of all the models of consumer decision making:
Economic View: According to this model, a consumer makes a purchase decision after
evaluation of all the alternatives which are available in the market and exhibits rationality in his
conduct. However, this model lacks complete reliability because a consumer has limits when it
comes to skills which helps in evaluation of different alternatives.
Passive View: According to this model of consumer behaviour, a purchase decision of a
consumer is highly influenced by the promotional efforts and strategies used by the marketers. It
is in contrast with the economic model as it suggests that consumer will always buy a product
based on how the product is marketed and positioned by the organisation.
Cognitive View: According to this model, a consumer makes a purchase decision on the
basis of his thinking and interests and his own understanding of demand in the market instead of
the needs or promotional strategies used by the marketers (Hofacker, Malthouse and Sultan,
2016). It lays emphasis on shortening the decision-making process and provide provisions for
instant purchases by the marketers.
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Emotional View: This model suggests that a consumer makes decision according to their
emotions. They are most likely to buy a product if they relate themselves with it. Consumers
spend less time on thinking whether the product is useful for them or not and make decision
based on the positive emotions which are generally related with the product.
TASK 2
P3 Comparison of the key differences in decision making process under B2B and B2C using
specific examples.
B2B and B2C are two very different business models and hence the decision-making
process related to purchase system is very different in both the models. Some of the key
differences which can be noticed under buying behaviour in both the models are:
Time and People involved: In B2B business models, decision-making involves a lot of time
and a lot of people are involved in the process of decision making for example a purchase
decision for Climax studios ltd. of network providers for game development would involve a
consultation of the top-management and many other people and will take time whereas in B2C,
decision-making is a very fast process relatively and only a few people are concerned in the
process of decision-making.
Duration of relationships: In B2B buyers are focused towards making long-term
relationships from the suppliers and aim at getting benefits in the long duration such as supplier
relationship with coffee providers with Starbucks Ltd. whereas in B2C, customers aim to derive
benefit in the short term and focus generally on short-term relationship such as discount offered
by any seller would result in a short-term relationship and benefit derived by the consumer in
accepting that discount and purchasing the product.
Buyer emotions: In B2B buyer emotions and logical arguments have a very little or no
influence at all in the process of decision making and the rationality of needs is more at
consideration whereas in B2C models, individual emotions and feelings of a person towards a
particular product has a great influence on the buying behaviour and decision-making (Pandey
and Mookerjee, 2018). For example, an individual might buy a product because of its perceived
emotional value such as buying a product which was somehow associated with the childhood of
a person but this is not the case in B2B models.
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Size of purchases: In B2B business models, purchases are in large sizes and a huge
investment is involved in every purchase consideration which makes it necessary for the
decision-makers to asses the long term future benefits of the purchase whereas in B2C models,
sizes of the purchase is small and doesn’t involve any long-term future benefit assessment.
P4 Different approaches and methods of market research to understand the decision-making
process in both B2C and B2B contexts.
Generally, the same models for qualitative and quantitative research are used with some
changes in their implementation are used to understand decision-making in both the models
which are being discussed below:
Personal interviews: For qualitative research in both the business models, marketers use the
method of personal interview which involves a one-to-one round of questions with an individual
buyer to help better understand the decision-making process (Hansen and Mossberg, 2013). In
B2C business models, a single person is interviewed to get some insights into buying behaviours
whereas in B2B, interview is done with potential clients or subject-matter experts. This is an
interesting and useful approach to get qualitative understanding of consumer behaviour however
its successful implementation requires a lot of time and efforts.
Observations: Observing the behaviour of consumers in different situations helps the
marketers to understand the process of decision-making in both the B2B and B2C business
models in a better way. It helps to analyse the influence of various factors on buying behaviour
of the consumers.
Surveys: Many types of surveys such as telephone surveys, mail surveys, online surveys and in-
person surveys are used for conducting research related to the behaviour of consumers in
different business models. In person surveys are more time and cost consuming. Generally,
online surveys are used to understand the behaviour and process of decision-making and get
quantitative data related to the same (Goh, Heng and Lin, 2013). Online surveys are most time
and cost effective and a large sample size can be analysed however it is difficult to ensure the
reliability of data obtained with the help of online surveys. In both B2B and B2C models, the
survey method of research is applied in a similar fashion with very little changes. However, due
to large purchasing size and wholesale purchases, sample size in case of B2B business models is
generally smaller in size.
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TASK 3
P5 Evaluation of how marketers can influence the different stages of consumer decision-making
process in B2B and B2C by specific examples.
As discussed earlier, a consumer goes through 5 different stages in a decision-making
process and purchasing any product or service. All the stages are of extreme relevance and affect
the whole process significantly. Attempts are made by marketers to influence the different stages
involved in the buying process to make sure that their product fits into the requirement and needs
of the customer and a sale is generated. Here is brief explanation with the help of specific
examples as to how different stages under this process can be influenced by the marketers:
STAGE 1 (Need recognition): This is the initial stage where the buyer identifies a need or a
problem. External factors responsible for stimulation of this need involves the promotion and
advertising of various products by the marketers. This is the most essential stage where every
marketer focuses to create the biggest impact using different strategies (Glimcher and Fehr,
2013). A customer generally don’t recognises a need for any product until he evaluates how the
product might be useful for him. Every marketing campaign aims at describing in terms of its
usefulness for the consumer which leads to a stimulation of need. For example, when a person
watches an advertisement of a new game launched by the Climax Studios Ltd. with better
graphics and improved performance, he identifies a need to buy that product since it is useful for
the customer in satisfying his entertainment needs. The further buying decision depends on the
affordability and many other factors but a need is stimulated in the consumer at this stage.
STAGE 2 (Information research): During the second stage, consumer tries to gather
information about the product in which marketing plays an important role by helping the
customer to identify sources from which he can obtain information and descriptions about the
product such as online brochures or catalogues. For examples, the management of the Climax
company usually include links for website where a detailed product information about the game
is available in advertisements.
STAGE 3 (Evaluation of alternatives): Marketers help in influencing the evaluation of
alternatives by the consumer by describing how the product offered by them is better than the
other products which are being sold in the market (De Mooij, 2019). Marketing campaign
planned around the competitive advantages of the game offered by the Climax company helps
the consumer in a better evaluation of alternatives in company’s favour and interest.
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STAGE 4 (Purchase decision): In the final stage of decision-making, a purchase decision is
made by the consumer in terms of what product he is going to buy and at what price. Tools such
as discounts and other offers helps the marketers to influence this stage of consumer buying
process and encourages the consumer for instant purchases. For example, an additional discount
offered by Climax Studios Ltd on its game might be a factor for an individual which helps him in
taking his final decision of buying that product.
STAGE 5 (Post-purchase behaviour): Marketers try to influence the post-purchase
behaviour by strategically responding to the various customer grievances and complaints and
showcasing positive consumer responses. This stage helps in influencing future buying
behaviour of the consumer as well.
CONCLUSION
It can be concluded from the above report that consumer decision-making is a process which
involves various stages and each stage has a significant impact on final decision. It is important
for the manager to understand the consumer beahvuour to adopt better marketing and pricing
strategies (Chen, Chen and Huang, 2012). It can also be concluded that there are many
differences in the decision-making process in B2B and B2C business models and various tools
are used for research by the marketers in both the models. At last it can be concluded from this
report, a marketer has significant strategies and tools which he uses to influence every stage in
the process of consumer behaviour and decision-making.
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REFERENCES
Books and Journals
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De Mooij, M., 2019. Consumer behavior and culture: Consequences for global marketing and
advertising. SAGE Publications Limited.
Glimcher, P.W. and Fehr, E. eds., 2013. Neuroeconomics: Decision making and the brain.
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Hansen, A.H. and Mossberg, L., 2013. Consumer immersion: A key to extraordinary
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