Consumer Decision-Making Process - Essay Example

 Consumer Decision-Making Process Purchasing a product is not just a simple buying decision; it involves an entire decision-making process. Sellers need to pay attention to the complete procedure, rather than focusing solely on the purchase decision. In today’s fast-paced and technologically driven world, online shopping has turned into a norm. Even though the decision-making process for consumers is more or less the same, online marketers need to re-think their online marketing strategy. This purchasing process progresses in five stages, namely: recognizing needs, searching of information, evaluating alternatives, purchasing decision and post-purchasing behavior.[Phi09] Need Recognition is the start of the buying process, where the customers realize their need or problem. This necessity or want could be triggered by wanting to satisfy a need which arises due to internal stimuli, such as thirst, hunger, etc.[Ano] . This need can also be sparked by external stimuli such as advertisements, or when your friend buys a new car or a new pair of shoes. At this stage, online marketers should make effective use of the internet to stimulate recognition of this need [Phi09]. They generally start off by collecting information from consumers, about their lifestyles, the products they use, important events in their lives, through online surveys and questionnaires. In the internet world, customers tend to search for pages that they want to browse through. Marketers use the traditional method of using banners and ads to attract customers. Some even use pop-up sites to get the consumer’s attention. A study conducted by IIfeld and Winer showed that about 88 internet companies got frequent hits online due to banner advertising[Suh06]. Online Companies such as amazon.com and easyjet.com use this technique effectively. Not only does it use animated banners and images, amazon displays links such as “what customers are looking for” and “best-sellers”, which could arouse a certain need in the customer. Another need recognition technique could include responding to key words on search engines. When a customer types a key word such as ‘airline’ on google.com, Emirates or Air Canada are usually the first two options that appear on the search list. This search list order could be a vital technique of marketing. If the customer initially wanted to travel via Qatar airways, but the search list brought Emirates on the top, the customer could decide to Emirates instead. Discussion blogs in news groups etc. could also help catch the eye of the consumer. Information Search begins once a consumer has identified his need. There are various ways to search for information regarding the product that the consumer wants to purchase. By searching, he can find out all his options, the various brands that are available, the different prices, design, etc. [San06] .The extensiveness of this search depends upon how valuable this product is. If, for example, the customer wants a camera, he will research more rigorously about the various alternatives that are available. While, if a person just wants to get toothpaste, then obviously he will not go through such an extensive search process. In the online shopping world, customers have various search engines, blogs, discussion groups and web pages at their disposal, through which they can acquire vast amounts of material on different products. Websites such as [www.autotrader.com.uk] provide links such as “car reviews” and ‘compare car insurance prices’, so that the customer can get all the facts and figures about the various types of cars that are available. This way the customer gathers a whole bank of information and companies such as auto trader help direct the customer towards the choice the suits him the most. The auto trader website also had a section, where the customers can put in details about the type of car they want, and their selected budget, and the website lists all the options available in the specified category. Some people say that the information search process is easier and much more efficient online, than if someone was searching for information in the newspaper or going through various advertisements on the television[MiJ07] . The internet not only helps make the searching process quite effortless, but one can find way more information, than if one was searching offline. This not only leads to more choices for the customer, but also toughens the competition among various online retailers and websites. Once customers gather all the information that they need, and are well-informed about their options, they turn towards the third stage of the consumer decision making process, which involves evaluating alternatives[Zei]. Marketers need to know about how consumers process the information they gathered earlier to evaluate the various choices and finally arrive to their preferred brand choice.[Eri10] The evaluative criteria for these options, differs from customer to customer. Websites such as [www.pricerunner.com] help make this evaluation process easier. Suppose you want to purchase a mobile phone. One you click on to the mobile phones tab, you are led to a list of different mobile phones, with the most popular ones at the top. You want to buy a phone with a touch screen. You are provided with various options, such as iPhone 4S, Samsung galaxy, etc. and in front of each option is a ‘compare prices’ tab. This way you can view prices of the same product and model, from various retailers. You can also select the design, model and color of that product. Therefore price runner actually helps the customer narrow down his choice, from a touch screen phone, to an iPhone, to the exact model, design, price and retailer, making the online shopping experience rather easy for the customer and helping the customer believe that he got the best bargain. In the evaluation stage the consumer places the brands at different levels in his mind, and forms certain purchase intentions. Usually the consumer’s purchase decision will be to buy the most favored brand, but two issues can come between the consumer’s purchase intention and the actual purchase decision[Mar05]. The first factor is the attitude of peers. For example, if you’ve decided to buy an iPhone, but your friend already has one, and says that it does not have a lot of good applications, or that you could get the same features for a lower price by buying the Samsung Galaxy phone, then your chances of buying an iPhone are automatically reduced. The second factor is unexpected circumstances. For instance, the price of the phone could rise, or Samsung might drop the price of the Galaxy phone even further down, etc. Thus, preferences and purchase intentions do not always result in an actual purchase choice. Online websites such as amazon and easy jet can actually help the customer make the actual decision. Internet services that help support this decision include the ‘add to shopping cart’ tab and the various options for online payments[Efr01]. Amazon.com shows the customer the price that they’d actually be paying, and the original price that they’d have to pay if they were buying the product from another website. They give you shipment discounts on physical products and many offers such as ‘buy one get one free’. The types of online payment methods also play a role in affecting the purchase decision. The various types include electronic cash, credit card transactions and authentication. These sites use the assistance of payment websites such as paypal.com. Some consumers might be hesitant about performing a credit card transaction online. They might be afraid of their information being misused, or that the website might be a fraud. Therefore, payment websites such as PayPal use the tagline ‘the safer, easier way to pay without exposing your credit card or bank account number’, which instills confidence in the consumer to give out their personal details. Post Purchase Evaluation. The marketer’s job does not end once the product is bought. After getting a certain product, a consumer will either be satisfied or dissatisfied with it and will get involved in post purchase behavior which is a crucial stage for the marketer. Whenever a customer purchases a certain product, the customer will have certain expectations about the product. The product must have had a tagline which must have influenced the consumer’s purchasing decision. If a product fails to meet those expectations, the consumer will be disappointed; if it lives up to its tagline, and delivers all that was promised to the consumer, the consumer will be satisfied; but if the product performs even better than expected, then the consumer will be delighted[Phi09]. Therefore, marketers should always guarantee what their brand can actually offer, so as to avoid consumer disappointment. The internet can be an important tool in communicating with the consumers after the purchase is complete. Marketers can correspond with the customer via email, inquiring about the customer’s opinion, or making them fill out a questionnaire, which would help the marketer get information about whether the consumer is satisfied with the product or not. This way the marketers can take the appropriate form of action. Apart from emails, marketers can collect post-purchase information via customer support groups, discussion blogs and newsgroups. In order to avoid customer dissatisfaction, online marketers are paying more attention to the first few stages of the customer decision making process, so that the customer makes the right decision and is happy with it [Tim98]. The online shopping website Tesco, takes this follow up stage rather seriously. They have a ‘rate this page’ tab, where customers can fill out a questionnaire about the website. This way they can collect feedback about how many people are satisfied with their page and how many are not. They also have an extensive ‘contact us’ page, where the customer is provided with contact numbers and email addresses of all the individual departments at Tesco. This way if any consumer wants to contact the company after that purchase, they can easily do so. References Phi09: , (Philip Kotler, 2009), Ano: , (Anonymous, n.d.), Phi09: , (Philip Kotler, 2009), Suh06: , (Limbada, 2006), San06: , (Krishnamurthy, 2006), MiJ07: , (Mi-Jung Kim, 2007), Zei: , (Karake-Shalhoub, n.d.), Eri10: , (Erik Brynjolfsson, 2010), Mar05: , (Mark Easterby-Smith, 2005), Efr01: , (Efraim Turban, 2001), Tim98: , (Tim McEachern, 1998), Read More