Consumer Decision Making Process Meaning, Definition, Types, and Stages. The purchaser selection-making method includes the shoppers figuring out their needs, gathering information, evaluating alternatives, and then making their shopping decision. Consumer behavior may additionally decide with the aid of monetary and psychological elements and influenced using environmental elements like social and cultural values.
Consumer decision making behavior is a complicated technique and includes a whole lot beginning from hassle attention to post-purchase activities. Every patron has extraordinary wishes in their everyday lives and these are these wants that make to make one-of-a-kind decisions.
Decisions can be complex, comparing, evaluating, and choosing as properly as buying from a range of merchandise relying upon the opinion of a customer over a precise product. This renders perception and realization of the fundamental hassle of the client selection-making technique for entrepreneurs to make their merchandise and offerings specific to others in the marketplace.
The buying process begins when customers recognize an unsatisfied need. Then they seek information about how to satisfy their need- what, products might be useful and how they can buy them. Customers evaluate the various alternative sources of merchandise such as stores, catalogs, and the Internet and choose a store or an Internet site to visit or a catalog to review. This encounter with a retailer provides more information and may alert customers to additional needs.
After evaluating the retailer’s merchandise offering, customers may make a purchase or go to another retailer to collect more information. Eventually, customers make a purchase, use the product, and then decide whether the product satisfies their needs. In some situations, customers like Sania spend considerable time and effort selecting a retailer and evaluating the merchandise. In other situations, buying decisions stand made automatically with little thought.
The three types of customer decision-making processes are:
Extended problem solving is a purchase decision process in which customers devote considerable time and effort to analyzing alternatives. Customers typically engage in extended problem solving when the purchase decision involves a lot of risk and uncertainty. There are many types of risks. Financial risks arise when customers purchase an expensive product. Physical risks are important when customers feel a product may affect their health or safety.
Social risks arise when customers believe a product will affect how others view them. Consumers engage in extended problem solving when they are making a buying decision to satisfy an important need or when they have little knowledge about the product or service. Due to high risk and uncertainty in these situations, customers go beyond their knowledge to consult with friends, family members, or experts.
They may visit several retailers before making a purchase decision. Retailers influence customers engaged in extended problem solving by providing the necessary information in a readily available and easily understood manner and by offering money-back guarantees. For example, retailers that sell merchandise involving extended problem solving provide brochures describing the merchandise and its specifications; have informational displays in the store (such as a sofa cut in half to show its construction); and use salespeople to make presentations and answer questions.
Limited problem solving is a purchase decision process involving a moderate amount of effort and time. Customers engage in this type of buying process when they have had some prior experience with the product or service and their risk is moderate.
In these situations, customers tend to rely more on personal knowledge than on external information. They usually choose a retailer they have shopped at before and select merchandise they have bought in the past. The majority of customer decision-making involves limited problem-solving.
Retailers attempt to reinforce this buying pattern when customers are buying merchandise from them. If customers are shopping elsewhere, however, retailers need to break this buying pattern by introducing new information or offering different merchandise or services.
Sania Mirza’s buying process illustrates both limited and extended problem-solving. Her store choice decision was based on her prior knowledge of the merchandise in various stores she had shopped in and an ad in the San Francisco Chronicle. Considering this information, she felt the store choice decision was not very risky, thus she engaged in limited problem solving when deciding to visit Macy’s. But her buying process for the suit stood extended. This decision was important to her, thus she spent time acquiring information from a friend and the salesperson to evaluate and select a suit.
One common type of limited problem solving is impulse buying. Impulse buying is a buying decision made by customers on the spot after seeing the merchandise. Sania’s decision to buy the scarf was an impulse purchase.
Retailers encourage impulse buying behavior by using prominent displays to attract customer attention and stimulate a purchase decision based on little analysis. For example, sales of a grocery item are greatly increased when the item stands featured in an end-aisle display when a “BEST BUY” sign stands placed on the shelf with the item, and when the item stands placed at eye level (typically on the third shelf from the bottom), or when items stand placed at the checkout counter so customers can see them as they wait in line.
Supermarkets use these displays and prime locations for the profitable items that customers tend to buy on impulse, such as gourmet food, rather than commodities such as flour and sugar, which are usually planned purchases. Impulse purchases by electronic shoppers are stimulated by putting special merchandise on the retailer’s home page and by suggesting complimentary merchandise.
Habitual decision-making is a purchase decision process involving little or no conscious effort. Today’s customers have many demands on their time. One way they cope with these time pressures is by simplifying their decision-making process.
When a need arises, customers may automatically respond with, “I’ll buy the same thing bought last time from the same store.’ Typically, this habitual decision-making process is used when decisions aren’t very important to customers and involve familiar merchandise they have bought in the past.
Brand loyalty and store loyalty are examples of habitual decision-making. Brand loyalty means that customers like and consistently buy a specific brand in a product category. They are reluctant to switch to other brands if their favorite brand isn’t available. Thus, retailers can only satisfy these customers’ needs if they offer the specific brands desired. Brand loyalty creates both opportunities and problems for retailers.
Customers stand attracted to stores carrying popular brands. But since retailers must carry high-loyalty brands, they may not be able to negotiate favorable terms with the supplier of the popular national brands. Store loyalty means that customers like and habitually visit the same store to purchase a type of merchandise.
All retailers would like to increase their customers’ store loyalty. Some approaches for increasing store loyalty are selecting a convenient location, offering complete assortments and reducing the number of stockouts, rewarding customers for frequent purchases, and providing good customer service.
The buying behavior model stands as one method used by marketers for identifying and tracking the decision-making process of a customer from the start to the end. The process stands categorized into 5 different stages which stand explained as follows:
Need recognition occurs when a consumer exactly determines their needs. Consumers may feel like they are missing out on something and needs to address this issue to fill in the gap. When businesses can determine when their target market starts developing these needs or wants, they can avail the ideal opportunity to advertise their brands.
An example who buys water or cold drink identifies their need as thirst. Here; however, searching for information and evaluating alternatives are missing. These consumer decision-making steps stand considered to be important when an expensive brand is under buying consideration such as cars, laptops, mobile phones, etc.
The buying process begins when consumers recognize they need to satisfy. This stands called the problem recognition stage. Imagine leaving class to find that high winds had blown one of the oldest trees on campus directly onto your car. You need your car to get to school, work, and social events with your friends and family.
Because your current car stands destroyed, you would immediately recognize that you need a new type of transportation. In this case, due to a lack of public transportation and the distance you must travel to meet your day-to-day obligations, you need to purchase a new car.
The information search stage in the buyer decision process tends to change continually as consumers require obtaining more and more information about products that can satisfy their needs. Information can also obtain through recommendations from people having previous experiences with products.
At this level, consumers tend to consider risk management and prepare a list of the features of a particular brand. This is done so because most people do not want to regret their buying decision. Information for products and services can be obtained through several sources like:
Information searches fall into two main categories- external and internal.
When consumers seek information beyond their knowledge and experience to support them in their buying decision. They are engaging in an external information search. Marketers can help consumers fill in their knowledge gaps through advertisements and product websites. The Internet has become an increasingly powerful tool. Because it provides consumers with on-demand product information in a format. That offers them as much or as little detail as they prefer.
Many firms use social media to empower consumers’ external information search. For example, Ford uses Facebook, Twitter, YouTube, Flickr, and Scribd to communicate information and deepen relationships with customers. Ford combined paid advertising and content on Facebook by placing a sponsored video about the Ford Mustang on the Facebook logout page. Over 1 million people viewed the video in just one day. Allowing Ford to provide external information about the Mustang to a large audience of consumers.
The consumer’s friends and family serve as perhaps the most important sources of external information. Think about the example of buying a new car and what those in your life might say about different brands or types of vehicles. You might be impressed by the salespeople and commercials for a certain type of car. But if your parents or friends tell you about a bad experience they had with it. Their opinions probably carry more weight.
The power of these personal external information sources highlights why marketers must establish good relationships with all customers. It’s impossible to predict how one consumer’s experience might influence the buying decision and information of another potential customer.
Not all purchases require consumers to search for information externally. For frequently purchased items such as – shampoo or toothpaste, internal information often provides a sufficient basis for making a decision. In an internal information search, consumers use their past experiences with items from the same brand or product class as sources of information. You can easily remember your favorite soft drink or vacation destination. Which will likely influence what you drink with lunch today or where you go for spring break next year.
In our car example, your experience with automobiles plays a significant role in your new car purchase. If you have had a great experience driving a Ford Escape or Toyota Camry. For example, you may decide to buy a newer model of that same car. Alternatively, if you have had a bad experience with a specific car, brand, or dealership. You may quickly eliminate those automobiles from contention.
This step involves evaluating different alternatives that are available in the market along with the product lifecycle. Once it has been determined by the customer what can satisfy their need. They will start seeking out the best option available. This evaluation can be based upon different factors like quality, price, or any other factor which are important for customers.
They may compare prices or read reviews and then select a product that satisfies their parameters the most. Once consumers have acquired information. They can use it to evaluate different alternatives, typically with a focus on identifying the benefits associated with each product. Consumers’ evaluative criteria consist of attributes that they consider important about a certain product.
For example, you would probably consider certain characteristics of a car. Such as price, warranty, safety features, or fuel economy, are more important than others when evaluating which one to buy. Car marketers work very hard to convince you that the benefits of their car, truck, or SUV reflect the criteria that matter to you. Marketing professionals must not only emphasize the benefits of their goods or service. But also use strategies to ensure potential buyers view those benefits as important.
A company marketing an extremely fuel-efficient car might explain that you can use the several thousand dollars a year you will save on gas to pay off credit card debt or fund a family vacation. In contrast, a company marketing a giant SUV with poor fuel efficiency might tell you about the vehicle’s safety features and how it can protect your family or the flexibility it will give you to take more family members on trips.
When all the above stages have been passed, the customer has now finally decided to make a purchasing decision. At this stage, the consumer has evaluated all facts and has arrived at a logical conclusion. Which is either based upon the influence of marketing campaigns or upon emotional connections or personal experiences, or a combination of both. After evaluating the alternatives, a customer will most likely buy a product. Usually the marketer has little control over this part of the consumer decision-making process. Still, consumers have several decisions to make at this point.
For example, once you have decided on the car you want, you have to decide where to buy it. Price, sales team, and experience with a specific dealership can directly impact. This decision can finance terms such as lower interest rates. If you decide to lease a car rather than buy one, you would make that decision during this step.
An effective marketing strategy should seek to encourage ritual consumption. Ritual consumption refers to patterns of consumption that are repeated with regularity. These patterns can be as simple as buying the same soft drink or stopping at the same place for breakfast every morning. These types of repeat purchases often provide firms with higher profits and a steady stream of customer sales.
The purchase of the product is followed by a post-purchase evaluation. Which refers to analyzing whether the product was useful for the consumer or not. If the product has matched the expectations of the customer, they will serve as a brand ambassador. Who can influence other potential consumers which will increase the customer base of that particular brand? The same is true for negative experiences; however, they can halt the journey of potential customers toward the product. Post-purchase evaluation is even more important to marketers today because of the power of customer reviews available on the Internet.
Such reviews can become critical factors in the firm’s ability to win over new customers. Though the decision-making process provides marketers with a framework for understanding how consumers decide to purchase a product, consumers don’t always follow the orderly stages discussed. Marketers should not assume that because their strategy succeeds at one stage of the consumer decision-making process it will succeed at the next.
For example, a car company might do an excellent job of providing external information to help interest you in its car but still not receive your business. Because of your inability to secure financing or the objections of your family members. Numerous situational influences like these can occur at various points in the decision-making process and change the customer’s path.