The Consumer Decision Process| LGMW01/11
The Consumer Decision Process – Marketing Management
Customer is king – this popular and globally accepted statement has formed the basis for today’s Customer Centric and Holistic orientations towards marketing, as compared to the Production orientation that was prevalent until the 1950s.
Today, every product that is introduced into the market as a new entrant, or as a reinvention of an already existing product, is so done keeping in mind what the consumers want and need, and not just what the producer can produce.
In a market place where consumers needs and wants are drastically changing(MKA1), and companies are furiously trying to capitalize on these needs by introducing new products and brands, how does the consumer decide what he or she wants to buy? What compels a consumer to purchase a particular brand from a myriad of brands that serve the same or similar purpose?
The Buyer Decision Process or the Consumer Decision Process is one of the many intriguing aspects of Consumer Behaviour According to James F. Engel, Roger D. Blackwell and Paul W. Miniard, Consumer Behaviour can be defined as “the mental and emotional processes and the observable behaviour of consumers during searching for, purchasing and post consumption of a product or service.” Broadly, the definition elicits the main phases of Consumer Decision Making Process – searching, purchasing and post consumption actions.
The Business Dictionary defines Consumer Decision Making as ‘the process by which consumers identify their needs, collect information, evaluate alternatives, and make the purchase decision. These actions are determined by psychological and economic factors, and are influenced by environmental factors such as cultural, group, and social values.’
Steps in Consumer Decision Making
The Consumer Decision Making Process is a five-fold approach; the extent to which each of the steps is undertaken by consumers and the amount of time and effort spent on each step varies significantly based on the type of purchase that the consumer wishes to make. On one end of the spectrum, we have low involvement purchases such as purchase of salt, sugar and so on. Such purchases do not require extensive information search due to the nature of the product, and the wavering brand loyalty – customers may or may not be loyal to a particular brand of sugar or salt. On the other hand, high involvement purchases such as purchase of luxury cars or jewellery demand greater time be spent on the decision making process. Moreover, individual buyer process varies significantly from organisational buying behaviour and process (MKA3).
The steps involved in the decision making process are:
- Problem/Need Recognition: Any purchase decision begins with the identification or recognition of a problem. The problem or need typically stems from one of two stimuli, or both.
- Internal Stimuli
- External Stimuli
The stimuli are in turn, affected by the individual’s level of need, and better explained by Maslow’s Theory of Needs.
Consider Sam, a resident of Sydney, who owns a pair of jeans that have gone out of style. He finds himself needing a new pair of jeans that are trendy and currently fashionable. He recognizes his problem to be the lack of a pair of good, fitting jeans that are within the norms of the latest fashion fad.
- Information Search: Once the consumer has identified his or her need, he/she begins the process of information search. In the context of purchasing a pair of jeans, Sam may look for information from various sources such as
- Internal sources: He had always wanted to own a pair of Diesel Jeans
- Group sources: Information from peers and social groups regarding the trendiest brand of jeans, or jeans that fit the best, could help Sam in deciding which brand to purchase from
- Marketing sources: Various companies engage in marketing communications to demonstrate the benefits that their brand can offer to consumers.
- Experiential sources: Sam himself may have experienced a particular brand in the past, which acts as a source of information. He may have tried on a pair of Levi’s jeans during his previous shopping trip, and may have liked the colour
iii. Evaluation of Alternatives: By investing time and effort in seeking information, the consumer would come across a few alternatives that fit his/her requirement. The consumer would have to evaluate each alternative and what it offers, in order to make a final decision. For example, Sam may narrow down his choices to Diesel, Levi’s and Lee. Each brand may offer a certain benefit. Sam will then rank the benefits according to the features he requires the most.
- Purchase: The consumer finally makes a choice from among the various alternatives, and purchases his/her brand of choice.
- Post-Purchase Decision: Once the product has been purchased and utilized or consumed, the consumer gains an experience of the product, which could be either satisfactory or unsatisfactory(MKA10) (broadly). Customer satisfaction is usually, though not always, followed by repeat purchases (depending on the type of product), positive word-of-mouth and recommendations. Similarly, an unsatisfactory experience will result in negative word-of-mouth about the brand.
For the most part, the consumer decision making process takes place without us even realising that it has happened. Every day, we unconsciously go through the process while purchasing staples or daily requirements; we are more conscious of the decision making process and the steps involved when the purchases in consideration carry a higher financial or status value.
Other articles under blog series of “Marketing Management”
- Marketing environment
- Consumer behavior
- Organisational buyer behavior
- Market segmentation, targeting and positioning
- Branding and product development
- Marketing plan
- Customer relationship management (CRM)
- Consumer buying process
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