Consumer Decision-Making Processes: Mapping the Path to Purchase

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CONSUMER BEHAVIOUR
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Table of Contents
Introduction......................................................................................................................................3
Demonstrating the ability to map a path to purchase in a given category, including the decision-
making process................................................................................................................................4
Introduction to consumer decision-making.................................................................................4
Factors that influence decision-making.......................................................................................7
Evaluating appropriate forms of research to understand influences on the decision-making
process (B2C and B2B).................................................................................................................10
Researching different stages of the decision-making process...................................................10
Influences on the decision-making process...............................................................................12
Evaluating how marketers influence the different stages of the decision-making process (B2C
and B2B)........................................................................................................................................15
Approaches to consumer learning: behavioural and cognitive..................................................15
Conclusion.....................................................................................................................................17
References......................................................................................................................................18
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Introduction
The modern business environment has grown to be highly competitive, increasing the
importance of understanding consumer behaviours for the business organisations so that they can
positively influence it to increase their sales. This study will analyse the path of purchase for a
consumer, evaluate the factors affecting the consumer decision-making process and the role of
marketers in it.
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Demonstrating the ability to map a path to purchase in a given category, including the
decision-making process
Introduction to consumer decision-making
Consumer decision-making model:
In the modern business market, the decision-making process of consumers has five distinct
stages. The pre-purchase stage involve recognition of problems, searching for information and
evaluating the alternatives. Rezaei (2015) stated that he purchase stage involve making decisions
of purchases. The receive stage involve purchasing the desired product or service, and the post-
purchase stage involve the post-purchase behaviours of the consumers.
 Recognition of problems: This is the stage where the consumers identify and recognize
their needs that they are planning to satisfy. In fact, these needs compels the customers to
purchase new products or services. For instance, the need to clean the teeth give rise to
the plans to buy a toothpaste.
 Searching for information: According to Wierenga and Van der Lans (2017), it may so
happen that the consumers do not know much about the exact product that can satisfy
their needs. Thus, they search for any available information about the product or service
that they plan to buy. In the modern age, the primary platforms for searching such
information are online search engines like Google.
 Evaluating the alternatives: After making the plans to purchase a product or service, the
consumers decide to examine and compare all the available alternatives for it. This
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comparison can be based on many factors, such as quality, price and other parameters.
The reviews of other customers also help in this stage.
 Making decisions of purchase: Karimi, Papamichail and Holland (2015) argued that in
this stage, the decisions regarding the purchases are finalised, and the actual purchase is
made, with the consumer making the payment and the business organisation delivering
the product or service to the consumer. Many factors affect this stage, such as the
advertisements, promotional activities or simply the customer’s tendency of impulse
buying.
 Post-purchase behaviours of the consumers: The post-purchase situation depends on
the quality of the product or service, and the satisfaction level of the consumer while
using it. High quality products or service results in an increase in customer satisfaction
and loyalty, which enhance the brand reputation of the company.
Levels of consumer decision-making:
There are three levels of the entire decision-making level of the consumers. These are:
 Extensive problem-solving: According to Oke et al. (2016), this level of problem-
solving is needed if the consumer is not aware of the attributes, brands or not even classes
of the products or services that can satisfy his or her needs. In such cases, the marketers
have to provide all these information to the consumers, along with presenting their brand
positions.
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 Limited problem-solving: This level of problem-solving is needed if the consumer is
more or less familiar with the brands and classes of the products or services that he or she
need, but is confronted with a new or unknown brand. In such situation, the marketers
have to clearly present the position of that brand to the consumers.
 Routine response behaviour: This is seen when the consumer knows nearly everything
about the attributes, brands and class of the product or services that he or she needs. This
is usually seen in the case of low-priced everyday products, such as shampoo or soaps.
Alavi et al. (2016) opined that in such situations, the marketer simply have to enhance
that habit for existing customers and introduce these product to the new customers.
Views of consumer decision-making:
The decision-making of the consumers can be expressed with four different views, which are:
 Economic view: This viewpoint states that consumers do not have enough information
regarding the products or services to make any rational decision. Hence, they go for the
products or services that offer more quantity against the same price.
 Passive view: Xie and Lee (2015) opined that according to this viewpoint, the consumers
do not take any active decisions on their own, and simply buy those products that have
more promotional efforts and advertisements associated with it.
 Emotional view: This particular viewpoint indicates that the consumers often associate
deep emotions or feelings with certain brands of products or services, and make their
purchases accordingly.
 Cognitive view: According to Ewerhard, Sisovsky and Johansson (2019), this viewpoint
expresses that the customers always assess the risks associated with buying the particular
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brand of products or services, and finalise their decisions with buying the product or
service with the least associated risk.
Factors that influence decision-making
Heuristics affecting the decision-making:
The decision-making process of a consumer may be greatly affected by heuristics-based
thinking. As heuristics is simply the decision-making strategy where the major focus is given on
the most important or relevant aspect of the impending problem, it utilises the past experiences,
intuition, educated guesses and emotions of a consumer to help him or her take the purchasing
decision quickly. Pappas (2016) argued that the marketers can use various heuristics models,
such as availability heuristics, representative heuristics and attribute substitution in order to
influence the decision-making of the consumers.
Marketing mix elements affecting the decision-making:
The 7Ps marketing mix is a set of elements or attributes that a particular brand have to clearly
define for the products or services under its banner.
 Product: This element directly refers to the quality and properties of the product or
service. Consumers usually decide to buy the product that has superior quality and
properties.
 Price: Saidani and Sudiarditha (2019) argued that this element signifies the pricing of the
products or services. Consumers often decide to choose a product with lower price.
 Place: This element points towards the place of delivering the product or service. It is
seen that consumers usually go to the nearest and most convenient place to look for their
desired product or service.
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 Promotion: This element refers to the promotional activities, such as advertisements. It
is sometimes seen that flashy and attractive advertisements can influence customer
decision of buying new products.
 People: This element refers to the people involved with the production and delivery of
the products or services. Consumers often prefers the brands where the staffs are modest,
efficient and helpful.
 Process: According to Loo and Leung (2018), this element refers to the business and
delivery process. The consumers often prefers the products or services that use robust and
less risky infrastructure and business process. Moreover, they often prefer to have a
simple and accurate delivery process of the products and services.
 Physical evidence: The consumers often prefer to buy products from brands that have
physical establishments, as it helps building the trust of consumers.
Influences of new technologies:
The modern digital technologies like e-tailing has become popular model of retail business
among the consumers. This has been further augmented by the development of online financial
transactions, making online payments more secure, fast and convenient. Apart from e-tailing
companies like Amazon, many retail chains are starting their e-tailing business, such as Tesco,
Waitrose and others.
Moreover, Xiang, Magnini and Fesenmaier (2015) argued that along with the B2B and B2C
business models, the new C2C model is also gaining popularity. Online platforms such as eBay
emphasis this customer-to-customer model, which is naturally increasing the sales figure of used
and old goods, increasing the retail market.
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Organisational decision-making models:
There are various models that a business organisation can use to make business-related decisions.
The management science model completely relies on the quantitative data to make logical
decisions, but it can often be erroneous due to its over-reliance on strict logic. The Carnegie
model emphasises the concept of bounded rationality, and focuses more on negotiations and
adjustments. Schneckenberg et al. (2017) argued that the garbage can model states that
organisational decisions are random and unsystematic in nature, decisions have to be made while
considering the entire organisational profitability. Unstructured decision-making model is used
mainly for highly uncertain organisational situations. Contingency decision-making model relies
on the two dimensions of problem and technical knowledge to reach a solution.
Stages of buying:
There are mainly six stages of the process of a consumer buying a product or service from a
business organisation. Rezaei (2015) argued that the first stage is recognising the problem,
searching the information, evaluating the alternatives, deciding to purchase, buying the product
or service and post-purchase analysis.
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Evaluating appropriate forms of research to understand influences on the decision-making
process (B2C and B2B)
Researching different stages of the decision-making process
The decision making process of B2B and B2C organisation:
It is seen in this world of globalisation competition is enhancing in this business environment.
However, there is presence of two types of companies one is business to consumer companies
and another is business-to-business organizations. The business to consumer organizations takes
decisions based on the total buying trends of the consumers on an effective way. The B2C
companies like Mcdonalds, Alibaba, Facebook, eBay formulates business strategies based on the
exact requirement of the consumers. In the opinion of Diba, Vella, and Abratt (2019), for B2C
companies’ large consumer data is required and data analysis is performed by using the big data
software’s to tackle effective business decisions to increase revenue. On the other hand, the B2B
companies as if Atalassian telecommunication man telephone supply and other software
companies are important B2B companies those perform collaborative business with other
organizations. In the information technology industry there is presence of B2B companies like
Infosys cognizant those perform business with big banks. The business decision of the B2B
companies totally depends on the board of directors of the client company. The business
relationship of the B2B companies is easy to establish compared to the B2C companies.
In case of the Business to customer, one of the most important theories that may be used is the
decision theory that analysis different consumer perspective before taking a massive decision in
an efficient way. It is essential for companies like Amazon and Ebay to get feedback from the
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different consumer base and analyse their perspective to deliver service according to the demand.
The implementation stage is important, as monitoring of the effects of the decision is required. In
case of the B2B companies sometimes it is easy as the client gives immediate feedback of the
decision taken (Gomes, Fernandes, and Brandão, 2016). However, in case of the B2C companies
it is difficult to formulate monitoring, as sometimes the consumer experience cannot be
measured in a proper way. During implementation of any decisions in consumer-oriented
companies lots of analysis is required as the target segments vary and their preferences vary. In
case of B2B c companies like Cognizant client, feedback is the key and decisions are taken based
on feedbacks to improve a client satisfaction.
Difference in market research of B2B and B2c companies:
In this world of globalisation one of the most important component is the market research that
helps the organisation to develop effective business strategies that should help in establishment
of the competitive advantage over the rival companies. The research varies in B2B and B2C
organisation those are mentioned below:
 Skills set: In case of the skill during market research of B2B organisation
communications skills, in depth knowledge of the subject and soft skills are required
since the data is totally gathered form managers and professional person of the client
organisation (Grewal et al., 2016). On the other hand, in case of the B2C research
communication is required however, in this case consumers are the target to extract data
so online survey or physical survey may be done with close ended question to take
consumer perspective.
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 Research methodology: In case of the B2B organisation in the opinion of Veldeman,
Van Praet, and Mechant, (2017), it is essential to do qualitative research method that
includes detailed interview of the manager of the client company. On the other hand, in
case of the B2C company’s quantitative method like the close-ended survey is required
from their data may be quantified.
 Sample sizes: In case of B2B, small sample size is required as the buying trend is linear
according to the requirement of Client Company. However, in case of the B2C large
sample size is required that helps to develop a trend of the buying pattern of consumers
(Veldeman, 2017).
 The importance of tele-depth interviews: In depth, interviews are required in case of
B2B organisation where managers are often called and detailed interview is done to
analyse the experience. In case of B2C, superficial communication is essential to know
experience of consumers.
 Pareto principle: Pareto principle is used effectively in both B2B and B2C organisation.
It is right that 80% of the impact is almost done by 20 % of the consumers. In case of
B2B as well if there is 5 clients one big client will do major damage.
Influences on the decision-making process
A number of factors are there that influence the decision making process in the B2B and the B2C
method. Those factors can be classified as the internal as well as the external factors. In the
subsequent points, this classification has been explained.
Personality, self and motivation:
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