What is Consumer’s Decision Process?
Consumer’s Decision Process is a model that explains the steps or stages that a consumer goes through before making a purchase decision. These stages include problem recognition, information search, evaluation of alternatives, purchase decision, and post-purchase evaluation. By understanding the consumer’s decision process, businesses can create effective marketing strategies and make products that cater to the needs of the target audience.
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A good number of marketing-oriented companies spend huge amounts of money in understanding the consumer learning process about brands and services, how consumers choose brands, use the brands, and form opinions about the brands and brand-related experiences.
Many marketing research companies collect data about consumers’ decision processes and make them available to marketing strategists in the form of commercial intelligence. Marketers learn about various stages in the buying decision process by looking at themselves as consumers. This method is called the introspective method, which allows them to check their decisions if they would have been consumers by themselves.
The marketers also speak to a few customers through an informal interview method or by conducting focus group discussions and asking customers to reveal details, which led to the purchase. This method is called the retrospective method. Marketers also find potential customers and then ask about their purchase process, through a process called the prospective method.
During interviews for a desired purchase situation, marketers ask consumers to prescribe the ideal alternative in a purchase situation. This is called the prescriptive method. Each of these methods leads to a set of steps in the consumer decision process.
Stimulus Response Model of Consumer Decision-making
This model is also known as Input-Processing-Output Model. The consumer decision process is a series of activities and steps of decision-making leading to a purchase function. It represents a problem-solving approach. This is the simplest model to explain the consumer decision-making process.
The mechanism is the same as in any processing activity in which there are three factors namely inputs, processing and outputs. The inputs in the form of product, price, place and promotion parts of a marketing program are fed into the consumer information-processing box (called ‘black box’) and it leads to a set of outputs.
During the last few decades, numerous models of consumer behaviour depicting the buying process have been developed. All these models treat the consumer as a decision-maker who comes to the marketplace to solve his consumption problems and to achieve the satisfaction of his needs. The simplest model given is composed of three stages – Input, Processing, and Output.
Input is a set of stimulus factors that the consumer receives in the market. It is provided by two sets of stimulus variables, namely, the firm’s marketing efforts and the social environment. The firm’s marketing efforts are designed to positively expose, inform and influence consumers. These efforts include the product/service itself, advertising, price strategies, distribution network, and in fact all marketing functions.
For example, when a company introduces a new brand of detergent powder or a television set, it may run a series of radio commercials along with supporting press advertisements. The social environment serves as a non-commercial source of consumer information and influence, which is not under the direct control of the firm.
It includes reference groups and individuals, members of the family, social class and castes, culture, and the like. Both these stimuli variables influence consumers and their buying process.
Consumers receive the input factors and process input information through a deep psychological process of information processing, evaluation of alternative information inputs, and comparison of each input’s attributes with the expected consumer benefits that leads them to finally take a decision.
The decision is a mental rule used in favor of arriving at a solution to a confronting consumption problem. Consumers also retrieve available information from their memory box and use this information with the collected information from external sources to process information for arriving at a solution to a consumption problem.
Due to the ability to capture, analyze, retrieve, and use a mental rule to arrive at a decision, the consumer’s mind is called a black box.
The output factors are the end result of the information processing stage. These can be in the form of creating positive word of mouth among potential consumers, leading to a trial of the brand or final adoption of the brand for every purchase situation. The effectiveness of a marketing program is evaluated by measuring the output results.
Stages in Consumer Decision Process
For certain product categories, the consumer takes his buying decision immediately without much consideration. These are items of daily consumption. When consumers buy products and services without much consideration, they tend to show impulse buying behavior.
- Stage of Problem Recognition
- Stage of Information Search
- Stage of Alternative Evaluation
- Stage of Purchase Decision
- Stage of Post Purchase Behaviour
For some other product categories, mainly luxury or durable items the consumer thinks carefully before taking a decision to purchase them. Sometimes, the consumer may also consult others. Generally, the purchaser passes through five distinct stages namely need or problem recognition, information search, alternative evaluation, purchase decision, and post-purchase behavior.
Stage of Problem Recognition
A buying process starts when a consumer recognizes that there is a substantial discrepancy between his current state of satisfaction and expectations in a consumption situation. The need is an internal state of felt deprivation.
A consumer must have countless sets of needs but he becomes aware of a few of them when a feels devoid of certain experiences of product or service, whose existence would have otherwise made him satisfied.
This explanation assumes that consumers always become aware of their needs through an internal process of realization of deprivation. But in reality, the marketer can make the consumer aware of a particular need through communication or the social environment may make him aware of a particular need.
For example, needs related to basic instincts like hunger, sex, and thirst, are the needs that have the capacity for self-arousal. Whereas social needs like ownership of products and services related to social class belongingness and status are aroused by the individual customer’s socialization process.
Through marketing communication programs marketers expose consumers to new products and services for the satisfaction of some latent hidden need.
A need can be activated through internal or external stimuli. The basic needs of a common man rise to a particular level and become a drive and he knows from his previous experience how to satisfy these needs like hunger, thirst, sex, etc.
This is a case of internal stimulus. A need can also be aroused by an external stimulus such as the sight of a new products in a shop while purchasing other usual products.
There is a two-fold significance of the need arousal stage to a marketer.
- The marketer must identify the drive that might actually or potentially connect with the product class or brand and make the buyer feel that the product can satisfy his needs.
- He should also recognize that the need levels for the product fluctuate over time and are triggered by different cues. The marketer can arrange cues to conform better to the natural rhythms and timing of need arousal.
So mere existence of a need does not initiate a decision-making process. When this need is backed up by goal-directed behavior, it is called a motive. Motives are more dynamic and kinetic compared to needs, which are static in nature. Motives bring both propensities to search for information and the propensity to spend energy to acquire that information.
Stage of Information Search
After need arousal, the behavior of the consumer leads towards the collection of available information about various stimuli i.e. products and services in this case from various sources for further processing and decision-making.
Depending upon the intensity of need discrepancy and urgency of the problem, an individual reaches two states. The first state is called heightened attention where the consumer becomes more receptive to the information regarding the products and services he needs.
He becomes alert to information related to his need as well as on alternatives about their gratification. If a consumer needs to purchase a television, he will pay more attention to TV advertisements. He keeps remembering the remarks made by friends and associates about TVs. In this case, he is slowly collecting the information through an ongoing or passive information search process.
If the need is more intense and the problem is urgent, the individual enters a state of active information search in which he tries to collect more information about the product, its key attributes, the qualities of various brands, and about the outlets where they are available. His information search is direct and is also observable through his behavior.
The first source of consumer information is the internal source. The consumer searches for any relevant product information from his memory box. If the information is not available and in the case of supporting available information from internal sources for making a purchase decision he may collect information from external sources.
External sources for desired information can be grouped into four categories:
- Personal Sources (family, friends, neighbors, and peer group).
- Commercial Sources or Market Dominated Sources (advertisements, salesmen, dealers, and company-owned sales force).
- Public Sources (mass media, consumer rating organizations, trade association publications).
- Experiential Sources (handling, examining, and using the product).
At this stage, the consumer is actively involved in the buying process and pays attention to the product. However, if he loses interest during this involvement, his attention will be diverted and the buying-decision process will break down.
In our example of the housewife requiring a washing aid, she may look for further information about these machines once she becomes aware of such machines. The kind of information she may look for are the alternative washing machines available in the marketplace, their relative prices, operational efficiency, and warranty and service facilities.
Stage of Alternative Evaluation
Once interest in a product(s) is aroused, a consumer enters the subsequent stage of evaluation of alternatives. The evaluation stage represents the stage of mental (cognitive) and emotional (affective) trials of various product alternatives.
During this stage, the consumer assigns relative value-weights to different products/brands on the basis of the accumulated stock of product information and draws conclusions about their relative potential for giving satisfaction to his needs. When the consumer uses objective choice criteria, it is known as cognitive evaluation.
In the case of using emotional reasons for evaluating the alternatives, we call this affective evaluation. Consumers evaluate brands by using either or both criteria in a purchase situation.
Evaluation leads to the formation of buying intention that can be either to purchase or reject the product/brand. The intention is the forecasting future courses of action. The final purchase will, however, depend on the strength of the positive intention, that is the intention to buy.
In our example of the housewife, after arousal of her interest in washing machines, she will compare the stock of information she has accumulated about the different washing machines in the market and then evaluate the value of each one of them before she develops the intention to buy. However, if she feels that a washer-man/woman would serve the need then she may altogether reject the idea of buying any washing machine.
On the basis of the evaluation of the behavior of consumers, the marketer can improve or develop the product and segment the market on the basis of product attributes. So, at the evaluation stage the consumer gives relative weights to each factor for his purchase decision and evaluates each brand on the basis of those factors for each alternative.
Stage of Purchase Decision
Finally, the consumer arrives at a purchase decision. Purchase decisions can be one of the three viz. no buying, buying later, and buying now. No buying takes the consumer to the problem recognition stage as his consumption problem is not solved and he may again get involved in the process as we have explained.
A postponement of buying can be due to a lesser motivation or evolving personal and economic situation that forces the consumer not to buy now or postponement of purchase for a future period of time. If positive attitudes are formed towards the decided alternative, the consumer will make a purchase.
There are three more important considerations in taking the buying decision: (a) attitude of others such as wife, relatives, and friends. Interestingly, it depends more on the intensity of their negative attitude and the consumer’s motivation to comply with the other person’s wishes
(b) anticipated situational factors such as expected family income, expected total cost of the product, and the expected benefits from the product and (c) unanticipated situational factors, like accidents, illness, etc.
Both the influencer’s negative attitude towards the purchase process and the motivations of the buyer to overcome these influences will influence a no-purchase situation. The customer in this case is likely to go back again to the problem recognition stage.
Purchase is a consumer commitment to a product. It is the terminal stage in the buying decision process that completes a transaction. It occurs either as a trial and/or adoption. If a consumer is buying something for the first time then from the behavior viewpoint, it may be regarded as a trial.
This trial enables him to accumulate experience with the product purchased. If this experience is positive in terms of the satisfaction derived, then repeat purchases may occur, otherwise not.
For example, when a new brand of bathing soap is introduced in the market, the consumer may buy it for the first time as a trial. However, repeat purchases will occur only when he is satisfied with its performance. But the possibility of a trial purchase is not available in all cases.
In the case of consumer durables such as scooters, refrigerators, and the like, a trial is not possible, because once a product is purchased, it has to be adopted and repeatedly used. Adoption means a consumer’s decision to commit to full or further use of the product.
In our example of the housewife, the washing machine is not open for a trial purchase; it will have to be adopted only. If the customer decides to make a purchase, his post-consumption behavior is studied in the next stage.
Stage of Post Purchase Behaviour
If the product matches his expectations, the consumer is satisfied. If the performance of the product exceeds expectations, the consumer is delighted and if the performance falls short of expectations, he is dissatisfied.
So post purchase behavior leads to three situations, namely, the customer is satisfied; the customer is delighted and the customer is dissatisfied. In the event of dissatisfaction, the consumer goes back to the problem recognition stage and again undergoes the process of information search, evaluation of alternatives, and final purchase.
In the subsequent stages, he is not likely to include the rejected brand of the previous round and will only consider the existing brands and new brand information that he acquired while he was still evaluating the previous brand.
Post-purchase behavior refers to the behavior of a consumer after his commitment to a product has been made. It originates out of consumer experience regarding the use of the product and is indicated in terms of satisfaction.
This behavior is reflected in repeat purchases or abstinence from further purchases. A satisfied product-use experience leads to repeat purchases, referrals from satisfied customers to new customers, higher usage rates, and also brand advocacy.
Post-purchase behavior study also includes how consumers use and dispose of the product after consumption. Disposal of products explains the emerging environmental issues related to packaging disposal and its impact on the environment.
A consumer’s decision to buy a product or service is the result of the interplay of many forces or stimuli. The starting point is the marketer’s stimuli in the form of product offering through a marketing program, which is communicated through integrated marketing communication methods, and the products are made available at retail outlets at a price.
The marketing stimuli for the product include developing a marketing program by locating target markets and segmenting markets as per the customer’s needs and requirements.