Necessary Stages of Consumer Decision Making - Essay Example

The consumer necessarily passes through each stage of consumer decision making Consumers are said to pass through a decision making process when buying. Researchers have named five stages of consumer decision making process as recognition, information search, and evaluation of alternatives, purchase decision, and post-purchase decision. This process should be understood by marketing managers in order to come up with right decisions on how to market their products or services. According to Lamb, Hair & Daniel (2011), problem or need recognition is the first step in the process of purchasing, meaning, the consumer notices a difference in the state he desires and the actual state he is in. For example one will buy a car to satisfy the need for comfort and reaching places faster and on time, or a person who is hungry will look for food to eat in order to satisfy his hunger. This sense of difference in actual status and desired state is also known as internal stimulus. There is also external stimulus where a person has been using his car for a while and sees no need of getting a new one, but as he sees more and more flashy cars being advertised and his friends buying them, he may get a feeling of being obsolete and the need to be up-to-date, thus desiring to buy a new car. Wants are induced by marketers and according to Solomon (2010), when a person has a need that is unfulfilled and has recognized a particular service or good that will satisfy it, then it is called a want. When people discover what their needs are, they start searching for information on how to satisfy them. Lamb, Hair & Daniel (2011) describe two ways of collection information: internal and external search. Consumers use internal search when they use the experience they had from the purchases they made before and what they can remember about the product or service. Information received from external search can either be non-marketing controlled or marketing-controlled information, with the presiding meaning source of information and advice from consumer reports, family and friends, and the latter meaning advertisements by marketers. Sometimes what a customer knows about a certain product or service may not provide enough information needed, so he may seek for more information from friends, newspapers and magazines, and so on. Online shopping sites like Amazon.com provide information about different products and product reviews, and Epinions.com provides product reviews by consumers and product ratings, price information and buying tips. Such independent sources are preferred by people when looking for product or service information. Sales people, brochures, websites and advertisements are also sources of information that buyers can consult. Evaluation of alternatives is the third step in consumer decision making process according to online Marketing Study Guide. However, consumers don’t use the same evaluation process in all their purchasing situations. In evaluating the best alternative, the consumer looks for a product that has problem-solving benefits, one that can meet his or her needs. There are set of attributes in a product that deliver the solution the customer is looking for. Each product is seen by consumers as a bundle of attributions with different ability levels of providing a solution (satisfying his or her need). The attributes of a product are only important and relevant if they lead to some benefits. On the hand benefits are importantly only if they can attend the problem of a consumer and satisfy the underlying need. Essential needs are personal and how important product attributes are than others differ from customer to customer’s beliefs of what can satisfy his or her need. Consumers develop preferences towards various brands based on their personal judgment on what attributes and benefits of a certain products are important. After evaluating alternatives, a consumer moves to the next stage of purchase decision. The buyer’s decision lies on three possibilities: from whom to buy, when to buy and not to buy. Deciding from who to buy from, a buyer can consider terms of sale, return policy or past experience buying from the seller. When to buy will be influenced by a sale, time pressure, shop or store atmosphere (Solomon, 2010). The last stage is the post-purchase evaluation where after using the service or the product, the consumer evaluates whether he or she made the right decision with the purchase. Consumers will feel satisfied if the product or service met or exceeded their expectations and are therefore likely to repeat the purchase. On the other hand, if they receive less value of what they expected, they may feel unsatisfied or ripped off, causing them to shun away from making the purchase decision in the future (Lamb, Hair & Daniel, 2011). The same buyers may discourage their family and friends to avoid making the same wrong purchase decision. Cognitive dissonance which is doubting if the purchase decision made was correct leads to dissatisfaction, and the buyer may regret the decision made and may wish he or she could had chosen another alternative. Companies must therefore overcome cognitive dissonance by understanding that consumer decision making process does not end after buying. They should therefore provide after-sales or aftercare services buy providing warranties, following up customers to find out how they are enjoying the service or product. By doing this companies will reassure buyers that the expensive and important decisions they made were right. Also, the purchase of one product or service may lead to further purchases. For instance, the purchase of a house may lead to purchase of fire insurance cover, the purchase of a man’s suit may lead to buying of a tie to match with, or a purchase of a video playing machine leads to the purchase of movie DVDs, and so on. Consumer however may go through different types of decision process: limited, extended and routine, depending on the level of information search, purchase experience, purchase frequency, time pressure and amount of perceived risk (Lamb, Hair & Daniel, 2011). A customers use extended consumer decision making when they fully use the decision making process. An ample time is spent on searching for information and evaluating alternatives. This form of decision making is also fit for consumers with no prior purchase experience, those buying complex items or expensive products or services like wedding venue, buying a first car, a house or choosing a college. A consumer who uses limited consumer decision making undergoes all the stages of the purchase process but does not spend a lot of time on them. This is used by a customer who has had a bit of prior purchase experience, the risk involved is moderate and the buyer is willing to spend some time purchasing. This is used in a situation where a customer is buying clothing, a second car, a vacation, and gifts and so on. A buyer who uses routine consumer decision making does not utilize all the steps in the decision process. In this case the buyer is doing repurchasing of the same products or services and does not want to spend time shopping. Usually, the customer has a great deal of purchasing experience as she or he buys the products regularly. There is no or little perceived risk on the product or service and they are usually low-priced. Routine decision making occurs when buying weekly groceries, weekly haircut and daily newspaper (Kennedy & Ashely, 2004. As discussed above customers involve in decision making at different levels and their involvement depend on various factors: previous experience, interest, perceived risk of negative consequences, situation and social visibility (Solomon (2010). The level of consumer involvement decreases if they’ve had previous experience with a service or product. After repeatedly trying the service, the buyer learns to make choices without spending a lot of time. They spend less time involving in the purchase because they are already familiar with the service or product and already know whether their needs can be satisfied by the product or not. For example in a store there are different brands of beverages to choose from, and if a buyer always buys the same brand because it satisfies his or her need then there was no much involvement in the purchase. However a buyer purchasing the beverage for the first time is likely to be involved in the purchase in a great way. Interest is another factor that influences the level of consumer involvement. Different buyers are involved in different products or services like electronics, bicycling, movies, cars or music. A person who participates in car racing will be interested in a type of a car he would like to have and will spend more time evaluating different cars to suit his need. A person who wants a car that can help him move from one point to another may be less involved in the purchase and can just buy the car from the nearest location. A consumer’s level of involvement increase as the perceived risk of buying a service or a product increases. The risks that a buyer is concerned with are psychological risk, social risk and financial risk. High risk in financial risk is associated with high product prices, and so customers become more involved in the purchase. A person buying an electronic for the first time, which is perceived as high risk usually, spends more time on the purchase. However when the customer buys the electronic the same time, he will take social risks as he will buy a product that affect the opinion of other people in his circle (buying a Sony or LG electronics, or stylish clothes). Psychological risk is when buyers feel that the decision they made may cause anxiety or concern to them like feeling guilty for eating junk food (Tsiros & Mittal, 2000.) Situation is also another factor that affects consumer involvement level in the purchase. A situation may transform a high-involvement into a low-involvement decision or vice-versa. For instance when a person goes to eat alone, he may go to a cheaper eating place and order low –priced food, but when joined by friends or workmates he will buy expensive food in an expensive hotel. Consumer involvement in the purchase also depends on social visibility, where as product’s social visibility increases, so does the involvement. These products are designer clothing, cars, furniture, and jewelry normally on social display. They also carry a social risk as they definitely say something about the buyer. It is important for marketers to understand the entire process of consumer decision making rather than the decision to purchase. At the need recognition stage, marketers can align their messages in the advertisements with the potential need of a customer. Marketers can create awareness that trigger a need with external stimuli. At the information search stage, marketers can provide product and company information by issuing out brochures, fliers, inviting consumers in open days, advertisements and posting product information in consumer reports (Olsen, 2003). By understanding the evaluation process that consumers go through, marketers can influence their buying decisions. They can provide buyers who are highly involved in the purchase with information that reassures positive results of buying, by emphasizing on advantages of the company compared to competitors and important features of the product. For a customer who can’t find preferred alternatives, marketers can provide all the information needed including features comparing company’s products and the competitors. At the purchase decision stage, marketers should ensure that the store atmosphere and environment is pleasant to what the customer is looking for. They can also save a customer’s time by clearing return policy and terms of sale upfront (Dalton, Hoyle& Watts, 2010). Having sales can also influence the purchasing decisions, as specials and sales promotions can be very effective in gaining new buyers and maintaining the existing ones. Marketers should also pay attention to their customer service and competitive prices which can create an incredible experience to a buyer. At the post-purchase evaluation, marketers should follow-up with consumers to check on the product use progress and if they are encountering any problems (Hall, 1990). They can also provide after-sales services, free technical support for a period of time and warranties. Reference List Dalton M, Hoyle, DG & Watts, MW 2010. Human Relations. 4th ed. Cengage Learning, pp. 222-235 Hall, T 1990. Other Furnishers Aren't Smiling. The New York Times. Available at: http://www.nytimes.com/1990/02/08/garden/other-furnishers-aren-t-smiling.html?pagewanted=all&src=pm> [Accessed 18th April 2012). Haubl, G & Trifts V 2000. Consumer Decision Making in Online Shopping Environments: The Effects of Interactive Decision Aids. Marketing Science, 19(1), pp. 4-21 Lamb, CW, Hair, JF & Daniel C 2011. Essentials of Marketing. 7th ed. Cengage Learning, pp. 189-199 Marketing Study Guide. Stages in Consumer Decision Making Process. Available at [Accessed 18th April 2012). Olsen, H 2003. 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