Consumer Decision-Making Process - Report Example

Running Head: CDM Consumer Decision-Making of the of the Consumer Decision-Making Introduction Consumer decision making is a lot of importance for companies as it all depends on consumer behaviour of choice about the kind of product and services that will satisfy their needs. Consumer behaviour is influenced by numerous dynamics like personal, environmental and social decision making, which provides the rationale in identifying true consumer needs in the field of marketing. To market a product or service, it is vital to first understand all about consumer needs and then market their product in such a way that it creates certain wants specific to that product or service in the mind of the customer. A consumer decision to buy a product or service involves various behaviours. CDM even recognized as consumer decision-making procedure comprises of behaviours that consumers exhibit while purchasing and scrapping off a product. The CDM comprises of five stages, marketers use these stages to influence consumers into purchasing their products. These stages start when consumer recognizes the need for a good or service, in the next stage consumer browse for information, in the third stage consumer analyzes the various alternatives they have, in the fourth stage the consumer makes the decision to purchase one particular alternative and in the last stage consumer analyzes the option he has selected. This paper focuses on the impact that use of internet has on the stages of CDM procedure. Discussion According to Dennis et al, usage of Internet is increasing day by day, usage of internet during the month of December 2010 was 14 hours at an average and by June 2010, it increased to 19 hours. Dennis et al even figured out that sales conducted through e-commerce elevated by 19.3% during June 2011 as compared to 2009 and the sales conducted through physical retail outlets only increased by 3% during the same period. According to Dennis et al, the percentage of contribution made by the online retail sales out of the total retail sales increased by 0.2% between 2010 and 2011 (Dennis et al, 2011). Internet has a major, but a different impact on the stages of CDM procedure. The retailers who are selling their products through internet have developed ways of attracting more and more consumers to their web page, but due to the lack of help provided for decision making by these retailers have failed in converting webpage visitors into buyers. Figure 1‑0‑1 Source: Blackwell et al, 2001, 23 Managers have to view the CDM procedures from the consumers perspectives inorder to convert webpage visitors into buyers. Marketing through internet provides marketers with the ability to incorporate all the stages of CDM An exceptional feature of Internet marketing is its competence to provision all the stages in the consumer decision makiing process. O’Keefe and McEachern, during 1998 have created a model of the CDM which is supported through facilities provided by the internet and web (Okeefe, R. M. and Mceachern, 1998, p.72). Figure 1‑2 Source: O’Keefe and McEachern, 1998, 72 Recognition of Need The first step of the CDM model is the recognition of need by the consumer. Recognition of need refers to the point where a consumer experiences that there is a gap between the expected and the current situation. Internet can be used in this stage to provide information about the product to the consumer, this will stimulate the consumer to purchase the product. According to Blackwell, this stages is recognized as problem recognization phase (Blackwell et al, 2001, p.73). Various factors can impact this stage, these factors include size of the family, salary of the consumer, etc. Searching for information Once the consumer realizes that he/she needs a particular good or service to satisfy a particular need, they start looking for information. Information is now easily available to due to the internet, now consumers have more information available at hand as compared to the time period when internet was not available. Evaluating Alternatives Through the step of Information search, consumers identify various options available to satisfy their need. Once the consumers identify available alternatives, they start analyzing each alternative inorder to make a decision. They analyze these options by comparing the value that a consumer might get from a particular option, consumers even analyze the costs associated with the option and the benefits of obtaining that option. Internet may not be able to have a major impact on this stage of the CDM, because consumers can only view goods over the internet but they can not touch or feel these offerings. Therefore, internet has little impact on evaluating alternatives phase while consumers are looking for furniture or a bag. The internet has failed in providing help in evaluating alternatives especially in the case of purchase decision for products that have high cost and are purchased infrequently. Consumers themselves lack the ability to assess such products and they need external aid in assessing the alternatives for these products (Propper, 2000, p.855). Purchase Once the consumers have evaluated all alternatives, they select one of the several alternative and purchase it. The step can be quite simple and can even be quite complex. The stage becomes complex when paper work is involved and becomes easy when consumers are purchasing products that need no paper work. Involvement of the internet in this stage depends on the easy at which the contract of purchase and sale can be created. Internet have been quite successful if the products are small and less expensive, but it has failed in the case of expensive products (Scrivens, 2007, p.179). Evaluating the Purchase Decision Once the purchase has been made, consumers determine the effect of the purchase decision. Effect refers to the degree of satisfaction that consumers have gained by utilizing the opion they have selected. If the degree of satisfaction is high, the product has been able to satisfy the need for which the product was purchased, if it is low then the product has failed to perform the purpose for which it was produced. The feedback of whther the product has been successful or not is very important for the marketers (Blackwell et al, 2001). Marketers can use the internet to easily obtain the feedback of the consumers regarding the product. According to Scrivens, consumers feel more comfortable in providing response and feedback about a product through internet sources rather than anyother source (Scrivens, 2007, p.180). Conclusion Consumers have three main benefits of incorporating the internet in their decision making procedure, these include: availability of huge amount of information, appropriate evaluation of the available options and easy and comfort in purchasing an option (Schiffman, 1994, p.89). The effectiveness of internet in the CDM procedure depends on the degree of each benefit obtained by consumers. Marketers have to recognize the degree of impact that internet has on these stages and the benefits obtained by consumers in these stages inorder to make their internet retail activities successful. The internet provides more benefits to the consumers if the products are in expensive and less involvement is needed in making a purchase decision, but the internet has failed in helping consumers make a purchase decision when the products are expensive and higher level of expertise are required. Therefore, internet offers higher benefits if the consumer is purchasing online products such as pay-per-view, but it is less beneficial if the products include furniture items and insurance policies. If online retailers are able to provide help to consumers in making decisions where higher experiese are required, then internet retail outlets can become more successful. References Blackwell, R.D., Miniard, P.W. and Engel, J.F. 2001. Consumer Behavior, 9thedition, Forth Worth: Harcourt College Publishers. 32(6): 6-38. Dennis, C., B. Merrilees, C. Jayawardhena, and L.T. Wright (2011), "E-consumer behaviour," The European journal of Marketing, 43: 1121-39. Okeefe, R. M. and Mceachern, T. 1998. “Web-Based Customer Decision Support Systems”, Communications of the ACM, 41(3): 71-78. Propper, Carol (2000), "The Demand for Private Health Care in the UK," Journal of Health Economics, 19, 855-76. Schiffman, L.G and Kanuk, L. Leslie. (1994), Consumer Behaviour. NJ: Prentice Hall: 88-92. Scrivens, E. (2007), "The role of social marketing in influencing consumer behaviour," The Analysis of Social Policy the University of Bath Claverton Down Bath, 18(179-188). Read More