The consumer decision making is a complex process with involves all the stages from problem recognition to post purchase activities. All the consumers have their own needs in their daily lives and these needs make them make different decisions. These decisions can be complex depending on the consumer’s opinion about a particular product, evaluating and comparing, selecting and purchasing among the different types of product. Therefore, understanding and realizing the core issue of the process of consumer decision making and utilize the theories in practice is becoming a common view point by many companies and people.
There is a common consensus among many researchers and academics that consumer purchasing theory 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 past years. However, according to Tyagi and Kumar (2004), although these theories vary slightly from each other, they all lead to almost the same theory about the consumer purchasing theory which states that it involves the stages of search and purchase of product or service and the process 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 most common models of consumer decision making process and it involves five various stages. These stages are: recognition of need or problem, information search, comparing the alternatives, purchase and post-purchase evaluation. This simple model clearly illustrates and explains how the consumers make a purchasing decision.
Furthermore, Blackwell et al (2006) highlights the argument why this model is more precise and clear compared to the other similar models is that because this model’s core focus is on motivational factors which helps the user to understand the reasons behind the purchasing decision easier.
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 difference between the actual state of affairs and desired state of affairs. Neal and Quester (2006) further state that the recognition of a problem or need depend on different situations and circumstances such as personal or professional and this recognition results in creation of a purchasing idea. For instance, consumer may recognize the need to buy a laptop when there is need to carry it use it in different places which is convenient compared to a desktop computer.
Solomon et al (2006) classifies the human needs into two different categories depending on their nature. The following categories are mentioned: psychological and functional or physical needs. The authors state that the psychological needs are the outcome of emotional feeling of consumers whereas functional or physical needs are usually the results of necessity.
According to Tyagi (2004) need recognition at various levels often occurs during the process of encountering 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 until he or she encounters with the product as a result of engaging in ‘window-shopping’, media advertisements, 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 need is satisfied another one will come out and this trend continues repetitively.
2. Information Search
The next stage of the model is information search. Once the need is recognized, the consumer is likely to search more product-related information before directly making a purchase decision. However, different individuals are involved in search process differently depending on their knowledge about the product, their previous experience or purchases or on some external information such as feedback from others.
Search of information process itself can be divided into two parts as stated by Oliver (2011): the internal search and external search. In internal search, the consumers compare the alternatives from their own experiences and memories depending on their own past experiences and knowledge. For example, searching for fast food can be an example for internal search because customers often use their knowledge and tastes to choose the right product they need rather than asking someone for an advice. On the other hand, external search ends to be for bigger purchases such as home appliances or gadgets. For instance, consumers who wish to buy new furniture or a mobile phone tend to ask friends’ opinion and advices or search in the magazines and media before making a purchasing decision.
Winer (2009) argues that with the enhancing role of internet in professional and personal lives of people, increasing numbers of individuals are turning to various resources in internet when searching for information about product categories or specific brands. The author specifically highlights the role of online user reviews and forums in terms of their significant impact upon information search stage of consumer decision making process among internet users.
Colleagues, peers, friends and family members are highlighted as another important source of information by Kahle and Close (2006). Moreover, according to Kahle and Close (2006) the nature of influence of peers, friends and family members upon information search and consumer decision making process in general depends on a range of factors such as the nature of relationships, the level of personal influence, the extent of ‘opinion leadership’ associated with specific individuals etc.
3. Evaluation of Alternatives
After gathering enough information at the first stage the consumer gets into comparing and evaluating that information in order to make the right choice. In this stage the consumer analyzes all the information obtained through the search and considers various alternative products and services compares them according to the needs and wants. Moreover, another various aspects of the product such as size, quality, brand and price are considered at this stage. Therefore, this stage is considered to be the most important stage during the whole consumer decision making process.
Furthermore, according to Ha et al (2010), the process of evaluation of alternatives can sometimes be difficult, time consuming and full of pressure for a consumer. This is because it is quite hard to find an ideal product or service that satisfies the needs of the customer as there are numerous 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 be quite complex. Several factors and aspects need to be considered before making a purchasing decision. Factors such as age, culture, taste and budget have all impact on the evaluation process by the consumer. For example, when purchasing a furniture, the young people consider the factors such as convenience and price where as the old people are likely to consider the quality and design.
Moreover, celebrity endorsement is seen as another factor with great potential impact on evaluation of alternatives stages of consumer decision making process. Cant et al. (2010) explain the effectiveness of celebrity endorsements with perceived greatness people associate with their idols and the willingness and desire to become like their idols.
4. Purchase Decision
Once the information search and evaluation process is over, the consumer makes the purchasing decision and this stage is considered to be the most important stage throughout the whole process. In this stage, the consumer makes decision to make a final purchase as he or she has already reviewed all the alternatives and came to a final decision point. Purchased further can be classified 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 number of factors that can affect the purchasing process. For example, the desired product may not be available at the stock. In this case the purchase process is delayed and consumer may consider buying 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 in terms 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 pushy manner, in which case it can prove to be counter-productive.
5. Post-Purchase Evaluation
The final stage in the consumer decision making process is post-purchase evaluation stage. Many companies 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 decision making processes by the consumer for the same product. Therefore this stage reflects the consumer’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 good experience is vital in reducing the uncertainty when the decision to purchase the same product or service is considered the ext time.
The opinions of peers, friends and family regarding the purchases made is specified as one of the most important factors affecting the outcome of post-purchase evaluation by Perrey and Spillecke (2011). This point is further expanded by Trehan and Trehan (2011), according to whom peer opinions regarding product evaluations tend to impact customer level of satisfaction regardless 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 depending on the evaluation of the purchase and comparison of their own expectations. The outcome forms the experience of the customer and it this experience is believed to have a direct impact on the next decision of the consumer to purchase the same product from the same seller.
Simply, if the consumer is satisfies with the purchase it is likely that the purchase may be repeated while if they have a negative experience from the purchase it is unlikely that the consumer may make the decision to buy the same product from the same seller or even may not buy the product at all.
Brink, A. & Berndt, A. (2009) “Relationship Marketing and Customer Relationship Management” Juta Publications
Cant, M.C., Strydom, J.W. & Jooste, C.J. (2009) “Marketing Management” Juta Publications
Ha, H., Janda. S. and Muthaly, S., (2010). “Development of brand equity: evaluation of four alternative models”, Service Industries Journal, 30(6), pp. 911-928
Hoyer, W.D. & Macinnis, D.J. (2008) “Consumer Behaviour”, 5th edition, Cengage Learning
Kacen. J. J. and Lee. J. A., (2002) “The influence of culture on consumer impulsive buying behaviour”, Journal of consumer psychology. 12(2), pp. 163-174.
Kahle L.R. and Close, A. (2006) “Consumer Behaviour Knowledge for Effective Sports and Event Marketing”, Taylor & Francis, New York, USA
Ofir, C. and Simonson, I. (2005) “The Effect of Stating Expectations on Customer Satisfaction and Shopping Experience”, Stanford Graduate School of Business 44p
Perrey, J & Spillecke, D. (2011) “Retail Marketing and Branding: A Definitive Guide to Maximising ROI” John Wiley & Sons
Trehan, M. & Trehan, R. (2011) “Advertising and Sales Management” FK Publications
Tyagi, C. and Kumar, A. (2004) “Consumer Behaviour”, Atlantic Publishers, US
Wiedmann, K., Hennigs, N. and Siebels, A. (2007) “Measuring Luxury consumer perception: A cross-culture framework”, Academy of Marketing Science review, 2007(7)
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Consumer Behavior : Chapter 13
SUMMARY: Consumers make numerous decisions everyday; sometimes even when they are not consciously aware of how and why they have made a choice. The consumer as a decision maker is viewed in different ways by different groups of researchers. The economic view holds that consumers are rational decision makers, while some other researchers view the consumers as uninvolved, passive decision makers.
There are three phases in consumer decision making process - problem recognition, information search, and alternatives evaluation and selection. Problem recognition is initiated with identification of a gap in the actual state and the desired state as perceived by the consumer. The consumer may be aware or unaware of the problem or need.
The need awareness can trigger through non-marketing and/or marketing triggers. Marketing triggers involve identifying consumer problems through various techniques and then acting on these. Marketers may also try to suppress problem recognition by consumers for products like cigarettes, alcohol, etc.
Information search is initially done from internal sources, i.e., memory and experience, and then from external sources, i.e., friends, internet, etc. Consumer decision making involves seeking information on three important aspects of product - evaluation criteria, alternatives available, and attributes of each alternatives. The amount of external search to be done depends on various market, product, consumer, and situational variables.
Alternatives evaluation and selection involves making the brand choice after evaluating all the alternatives. There are three types of consumer choice processes - affective choice (based on 'it feels right' factor), attitude-based choice (based on decision rules), and attribute-based choice (based on attribute-by-attribute comparison across brands).
There are three important models which explain consumer decision making - the Howard-Sheth model of buying behavior, the Nicosia model, and the Engel-Blackwell-Miniard (EBM) model. The Howard-Sheth model of buying behavior attempts to explain the complexity of the consumer decision making process in case of incomplete information. However, is quite complex and difficult to understand.
The Nicosia model explains the consumers' buying behavior from the marketers' perspective. However, it fails to explain in detail the firm's and consumer's attributes and doesn't take into account that consumer might already be having a predisposition with respect to a particular product/brand.
The Engel-Blackwell-Miniard model assumes that the consumer approach is that of problem-solving. It, however, lacks clarity regarding the influence of individual and environmental variables on consumer decision making.
Consumer Decision-making - An Overview
Defining Consumer Decisions
Consumers as Decision Makers
Types of Consumer Decisions
Consumer Decision-making Process
Alternative Evaluation and Selection
Modeling Consumer Decision-making
Howard-Sheth Model of Buying Behavior
The Nicosia Model
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