The Consumer Decision Process
Need RecognitionNeed recognition occurs when a consumer identifies a need and thinks of a product that might meet this need.
Learning ObjectivesIdentify need recognition as part of the consumer decision making process
- The 5 stages which a consumer often goes through when they are considering a purchase: problem or need recognition, information search, evaluation of alternatives, purchase, and post-purchase behavior.
- Need or problem recognition is oftentimes recognized as the first and most crucial step in the process because if a consumer does not perceive a problem or need, he generally will not move forward with considering a product purchase.
- A need can be triggered by internal or external stimuli.
- Internal stimuli refers to a personal perception experienced by the consumer, such as hunger or thirst.
- Buyer Decision Processes: The Buyer Decision Processes are the decision-making processes undertaken by consumers in regard to a potential market transaction before, during, and after the purchase of a product or service.
- Abraham Harold Maslow: He was an American psychologist who was best known for creating Maslow's hierarchy of needs, a theory of self-actualization.
- need recognition: the first step in the buying decision process, where the problem or need is understood
- John Dewey: He was an American philosopher, psychologist, and educational reformer whose ideas have been influential in education and social reform. Dewey was an important early developer of the philosophy of pragmatism and one of the founders of functional psychology.
Need RecognitionThe Consumer Decision Processes (also known as Buyer Decision Processes) refer to the decision-making stages that a consumer undergoes before, during, and after they purchase a product or service.
John Dewey introduced 5 stages which consumers go through when they are considering a purchase:
- Problem or need recognition
- Information search
- Evaluation of alternatives
- Post-purchase behavior
Problem or Need RecognitionThis is the first stage of the Consumer Decision Process in which the consumer is able to recognize what the problem or need is and subsequently, what product or kind of product would be able to meet this need. It is oftentimes recognized as the first and most crucial step in the process because if consumers do not perceive a problem or need, they generally will not move forward with considering a product purchase.
A need can be triggered by internal or external stimuli. Internal stimuli refers to a personal perception experienced by the consumer, such as hunger, thirst, and so on. For example, an elderly, single woman may feel lonely so she decides that she wants to purchase a cat. External stimuli include outside influences such as advertising or word-of-mouth. For example, a consumer who just moved to Minnesota may not realize he needs a heavy winter coat until he sees a store advertising for it, which triggers the need in his mind.
Maslow's Hierarchy of NeedsAmerican Psychologist Abraham Harold Maslow believes that needs are arranged in a hierarchy. Only after a human has achieved the needs of a certain stage, does he move to the next one. None of his published works included a visual representation of the hierarchy. The pyramidal diagram illustrating the Maslow needs hierarchy may have been created by a psychology textbook publisher as an illustrative device.
This now iconic pyramid frequently depicts the spectrum of human needs, both physical and psychological, as accompaniment to articles describing Maslow's needs theory and may give the impression that the Hierarchy of Needs is a fixed and rigid sequence of progression. Yet, starting with the first publication of his theory in 1943, Maslow described human needs as being relatively fluid—with many needs being present in a person simultaneously.
According to Maslow's theory, when a human being ascends the levels of the hierarchy having fulfilled the needs in the hierarchy, one may eventually achieve self-actualization. Maslow eventually concluded that self-actualization was not an automatic outcome of satisfying the other human needs. Human needs as identified by Maslow:
- At the bottom of the hierarchy are the "Basic needs or Physiological needs" of a human being: food, water, sleep and sex.
- The next level is "Safety Needs: Security, Order, and Stability". These two steps are important to the physical survival of the person.
- Once individuals have basic nutrition, shelter and safety, they attempt to accomplish more. The third level of need is "Love and Belonging", which are psychological needs; when individuals have taken care of themselves physically, they are ready to share themselves with others, such as with family and friends.
- The fourth level is achieved when individuals feel comfortable with what they have accomplished. This is the "Esteem" level, the need to be competent and recognized, such as through status and level of success.
- Then fifth is the "Cognitive" level, where individuals intellectually stimulate themselves and explore.
- Finally, there is the "Aesthetic" level, which is the need for harmony, order and beauty.
At the top of the pyramid, "Need for Self-actualization" occurs when individuals reach a state of harmony and understanding because they are engaged in achieving their full potential.
Information SearchInformation Search is a stage in the Consumer Decision Process during which a consumer searches for internal or external information.
Learning ObjectivesExamine the "information search" stage of the consumer decision process
- During the information search, the options available to the consumer are identified or further clarified.
- An internal search refers to a consumer's memory or recollection of a product, oftentimes triggered or guided by personal experience.
- An external search is conducted when a person who has no prior knowledge about a product seeks information from personal sources (e.g. word of mouth from friends/family) and/or public sources (e.g. online forums, consumer reports) or marketer dominated sources (e.g. sales persons, advertising).
- Consumer Decision Process: Also known as the Buying Decision Process, the process describes the fundamental stages that a customer goes through when deciding to buy a product. Many scholars have given their version of the buying decision model.
- Information Search: The second of five stages that comprise the Consumer Decision Process. It can be categorized as internal or external research.
- External Research: When a person has no prior knowledge about a product, which then leads them to seek information from personal or public sources.
Information search can be categorized as internal or external research:
Internal research refers to a consumer's memory or recollection of a product, oftentimes triggered or guided by personal experience. This is when a person tries to search their memory to see whether they recall past experiences with a product, brand, or service. If the product is considered a staple or something that is frequently purchased, internal information search may be enough to trigger a purchase.
External research is conducted when a person has no prior knowledge about a product, which then leads them to seek information from personal sources (e.g. word of mouth from friends/family ) and/or public sources (e.g. online forums, consumer reports) or marketer dominated sources (e.g. sales persons, advertising) especially when a person's previous experience is limited or deemed inefficient.
- Examples of personal sources that are marketer dominated, include sales person advice in a retail store.
- Personal sources that are not marketer dominated include advice from friends and family.
- Television advertising and company websites are examples of non-personal sources that are marketer dominated
- Online forums are non-personal sources that are non-marketer dominated.
Evaluating AlternativesDuring the evaluation of alternatives stage, the consumer evaluates all the products available on a scale of particular attributes.
Learning ObjectivesExamine the "evaluation of alternatives" stage of the Consumer Decision Process
- During this stage, consumers evaluate all of their products or brand options on a scale of attributes which have the ability to deliver the benefit that they are seeking.
- In order for a marketing organization to increase the likelihood that their brand is part of the evoked set for many consumers, they need to understand what benefits consumers are seeking and specifically, which attributes will be most influential to their decision-making process.
- It is important to note that consumers evaluate alternatives in terms of the functional and psychological benefits that they offer.
- During this stage, consumers can be significantly influenced by their attitude as well as the degree of involvement that they may have with the product, brand, or overall category.
- Ultimately, consumers must be able to effectively assess the value of all the products or brands in their evoked set before they can move on to the next step of the decision process.
- Evoked Set: The number of alternatives that are considered by consumers during the problem-solving process.
- Evaluation of Alternatives: This is the third stage in the Consumer Decision Process. During this stage, consumers compare the brands and products that are in their evoked set.
Sometimes known as a consideration set, the evoked set tends to be small relative to the total number of options available. When a consumer commits significant time to the comparative process and reviews price, warranties, terms and condition of sale and other features it is said that they are involved in extended problem solving.
Unlike routine problem solving, extended or extensive problem solving comprises external research and the evaluation of alternatives. Whereas, routine problem solving is low-involvement, inexpensive, and has limited risk if purchased, extended problem solving justifies the additional effort with a high-priced or scarce product, service, or benefit (e.g., the purchase of a car). Likewise, consumers use extensive problem solving for infrequently purchased, expensive, high-risk, or new goods or services.
In order for a marketing organization to increase the likelihood that their brand is part of the evoked set for many consumers, they need to understand what benefits consumers are seeking and specifically, which attributes will be most influential to their decision-making process. It is important to note that consumers evaluate alternatives in terms of the functional and psychological benefits that they offer. The company also needs to check other brands of the customer's consideration set to prepare the right plan for its own brand.
During this stage, consumers can be significantly influenced by their attitude as well as the degree of involvement that they may have with the product, brand, or overall category. For example, if the customer involvement is high, then he or she will evaluate several brands, whereas if it's low, he or she may look at only one brand. In low involvement buying, the activity is usually frequent, habitual to a certain extent and there is generally little difference between the brands. No strong attachment exists between the buyer and the brand. Promotions are simple and repetitive. Conversely, high involvement buying involves products with many differences. The behavior is more complex and the research is more detail oriented.
Ultimately, consumers must be able to effectively assess the value of all the products or brands in their evoked set before they can move on to the next step of the decision process.
PurchaseDuring the purchase decision stage, the consumer may form an intention to buy the most preferred brand or product.
Learning ObjectivesExamine the "purchase decision" stage of the Consumer Decision Process
- During this time, the consumer may form an intention to buy the most preferred brand because he has evaluated all the alternatives and identified the value that it will bring him.
- The final purchase decision, can be disrupted by two factors: 1. Negative feedback of others and our level of motivation to comply or accept the feedback. 2. The decision may be disrupted due to a situation that one did not anticipate, such as losing a job or a retail store closing down.
- During this stage, the consumer must decide the following: 1. from whom he should buy, 2. when to buy, and 3. whether to buy.
- Purchase Decision: The fourth stage in the consumer decision process and when the purchase actually takes place.
According to Philip Kotler, Keller, Koshy and Jha (2009), the final purchase decision, can be disrupted by two factors:
- Negative feedback of others and our level of motivation to comply or accept the feedback. For example, after going through the need recognition, information search, and alternative evaluation stages, one might choose to buy a Nikon D80 DSLR camera, but a close photographer friend might share negative feedback, which could drastically influence personal preference.
- The decision may be disrupted due to a situation that one did not anticipate, such as losing a job or a retail store closing down.
During this stage, the consumer must decide the following:
- From whom they should buy, which is influenced by price point, terms of sale, and previous experience with or awareness of the seller and the return policy.
- When to buy, which can be influenced by the store atmosphere or environment, time pressures and constraints, the presence of a sale, and the shopping experience.
- This is also a time during the which the consumer might decide against making the purchase decision. Alternatively, they may also decide that they want to make the purchase at some point in the near or far future perhaps because the price point is above their means or simply because they might feel more comfortable waiting.
Post-Purchase BehaviorPost-purchase behavior is when the customer assesses whether he is satisfied or dissatisfied with a purchase.
Learning ObjectivesExamine the "post-purchase behavior" stage of the Consumer Decision Process
- How the customer feels about a purchase will significantly influence whether he will purchase the product again or consider other products within the brand repertoire.
- Cognitive dissonance is when the customer experiences feelings of post-purchase psychological tension or anxiety.
- Some companies like to engage their consumers with post-purchase communications in an effort to influence their feelings about their purchase and future purchases.
- cognitive dissonance: This term is used in modern psychology to describe the state of simultaneously holding two or more conflicting ideas, beliefs, values, or emotional reactions.
Cognitive dissonance, another form of buyer's remorse, is common at this stage. This is when the customer may experience feelings of post-purchase psychological tension or anxiety. For example, the customer might feel compelled to question whether he has made the right decision. They may also be exposed to advertising for a competitive product or brand which could put into question the product that they have chosen. A customer may also have a change of heart and decide that he no longer has a need for this particular product.
Some companies now opt to engage their consumers with post-purchase communications in an effort to influence their feelings about their purchase and future purchases. Offering money back guarantees also serve to extend and enrich post-purchase communications between the company and its consumers. Other examples include VIP invitations to become part of a club or special and select group of consumers who buy a particular product. Another example is when customers are asked for their contact information at the point of purchase so they can be targeted later with a follow-up call that surveys the product's performance and consumer satisfaction. This approach could help influence or alleviate feelings of cognitive dissonance or "buyer's remorse" following a product purchase.