The consumer decision process also called the buyer decision process, helps markets identify how consumers complete the journey from knowing about a product to making the purchase decision. Understanding the buyer buying process is essential for marketing and sales. The consumer or buyer decision process will enable them to set a marketing plan that convinces them to purchase the product or service for fulfilling the buyer’s or consumer’s problem.
The consumer decision process is composed of problem recognition, search, evaluation, and purchase decision. Post-purchase behavior is the result of satisfaction or dissatisfaction that the consumption provides. The buying process starts when the customer identifies a need or problem or when a need arises. It can be activated through internal or external stimuli.
Consumers go through 5 stages in deciding to purchase any goods or services.
5 Stages of the consumer decision process (buyer decision process) are;
- Problem Recognition or Need Recognition.
- Information Search.
- Evaluation of Alternatives.
- Purchase Decision.
- Post-Purchase Evaluation.
When making a purchase, the buyer goes through these 5 stages of the decision process.
Clearly, the buying process starts long before the actual purchase and continues long after. The marketer’s job is to understand the buyer’s behavior at each stage and its influences.
The first step of the buyer decision process is the need recognition stage. Here the consumer recognizes a need or problem and feels a difference between the actual state and some desired state. They try to find goods to satisfy such needs.
This leads to the second stage of searching for information about the product. The consumer tries the find out as much as possible about the product’s available brands.
At the Third stage, is consumer uses the information to evaluate alternative brands.
After that, the buyer makes the purchase decision at the fourth stage by selecting the most suitable product.
The fifth stage is the post-purchase evaluation, and it is the most important one. Depending on the level of satisfaction or dissatisfaction, the consumer will become a loyal customer or actively avoid the brand and tells others to do so via online reviews and word of mouth.
Let’s explain all five stages of the buyer decision process.
1. Problem or Need Recognition
Need recognition of Problem Recognition is the first stage of the buyer decision process. During need or problem recognition, the consumer recognizes a problem or need satisfied by a product or service in the market.
The buyer feels a difference between his or her actual state and some desired state. Internal stimuli can trigger the need. This occurs when one person’s normal needs, such as hunger, thirst, sex, rise to a level high enough to become a driver. External stimuli can also trigger a need.
At this stage, the marketer should study the buyer to find answers to some important questions. These are:
- What kinds of needs or problems arise?
- What is the root of these needs or problems?
- How they led the buyer or customer or consumers to a particular product?
This could be a simple as “I’m hungry; I need food.”
The need may have been triggered by internal stimuli (such as hunger or thirst) or external stimuli (such as advertising or word of mouth).
Need or Problem Recognition Process
When a consumer becomes aware that there is a difference between the desired state and an actual condition, problem recognition occurs. Every individual has unsatisfied needs and wants that create tension or discomfort.
Certain needs can be satisfied by purchasing and consuming goods and services. Deciding what to buy starts when a need that can be satisfied through consumption becomes strong enough to stimulate a person.
Thus, a problem is recognized when consumers have an unmet need, and everyday consumers recognize purchase or consumption-related problems.
Consumers may have routine problems when they run out of daily necessities and may have unexpected problems when major appliances suddenly go out of order. In addition to these two, there is another type of problem that is subtle and evolve slowly over time, such as a desire to buy a washing machine.
Consumer decision-making arises when an individual recognizes a problem or need that is not met.
A problem or need exists when there is a discrepancy between a consumer’s actual state and the desired state. This is shown in the following figure, along with different stages of the problem recognition process.
The above figure states that the desired state and existing state result from its lifestyle and current situation. His desired and current state could be the same, or there could be discrepancies between these two states.
If a consumer perceives a discrepancy between his desired and current state, he will recognize that he is having a problem. A consumer defines his problems in terms of his motivation that we have discussed in unit eleven.
The degree of an individual’s desire to resolve a particular problem depends on the degree of discrepancy between the desired and existing states and the importance of the problem.
Thus, an individual consumer will be desirous of solving a problem if he considers the degree of discrepancy as large enough and the problem as very serious or important.
After the problem is identified, the buyer has to define it in some meaningful term to help him initiate an action to solve his problem.
For example, one may recognize that he is having a status related problem. This is problem recognition. Now he has to define it in some meaningful term, which is causing the status problem.
A consumer may recognize both an active as well as the inactive problem that he is having. An active problem is that he is aware of or will become aware of, and, on the other hand, an inactive problem is one he is not aware of.
Situations Leading to Problem Recognition
There could be many situations that may lead a consumer to recognize a problem to exist. Major situations leading to problem recognition are;
- Insufficient Stock of Goods
- Dissatisfaction or Discontentment with the Stock
- Changes in the Environmental Characteristics
- Changes in the Financial Status
- Promotional Activities
- Consumer’s Previous Decisions
- Individual Development
- Efforts of Consumer Groups and Governmental Agencies
- Availability of Products
Insufficient Stock of Goods
The most common situation leading to problem recognition by a consumer is the depletion of the stock of goods that he uses. If, for example, an individual runs out of necessities that he uses, he will identify a problem to exist.
Dissatisfaction or Discontentment with the Stock
If a consumer becomes dissatisfied with the goods he owns or uses, he will recognize that he is having a problem.
A family having a ten year’s old car may be willing to buy a late model car. Such a feeling will lead to discontent, and as a result, the family will recognize a car-related problem.
Changes in the Environmental Characteristics
With the change in an individual’s or family’s environmental characteristics, the individual or the family may recognize a problem.
For example, when a family moves from one stage of its life cycle to another stage, it requires different types of products and services, and as a result, problems occur.
More so, friends and reference groups’ influence may demand new and different products to be bought by an individual or a family. Such a situation also leads to the recognition of a problem.
Changes in the Financial Status
Changes in the financial status or position of an individual or a family may also lead to problem recognition.
For example, if an individual’s financial position improves or worsens or anticipates an improvement or deterioration, he may recognize a problem associated with his actual or anticipated changing financial position.
By promotional activities, marketers try to trigger drives in consumers. Through different promotional activities, marketers try to create a discrepancy between actual and desired states of consumers. Such a situation will trigger problem recognition in consumers.
Consumer’s Previous Decisions
Other purchases made by a consumer may also lead to problem recognition.
For example, if an individual buys a television, it may trigger buying an antenna or a voltage stabilizer. The purchase of a computer may lead to the recognition of the problem of not having a printer.
With an individual’s mental development and change in outlook, he may recognize not having certain products.
Efforts of Consumer Groups and Governmental Agencies
Activities of different consumer interest groups and different government agencies may also lead to problem recognition. For example, if consumer groups advocate environmentally friendly products, they may feel the need for such products creating problems.
If the government puts an embargo on using private vehicles on the city’s main roads, consumers can buy bicycles, thus causing a problem.
Availability of Products
The availability of a product makes customers aware of it, making them feel to have one of those. Such a feeling may also lead to problem recognition.
Marketing Strategy with Regards to Problem Recognition
Recognition of problems by consumers bears important marketing implications. They should first identify the problems that consumers face, and, in the second stage, they should develop a marketing mix aiming at consumers’ problem solutions.
Marketers may also create situations where consumers look for problems or create situations that may suppress the consumers’ problem recognition.
Measuring Problem Recognition
The fast task is to identify the problems faced by the consumers or the problems they recognize. A marketer can take many approaches in measuring problems recognized by the consumers. One such approach is “intuition.”
By evaluating his product, a marketer can determine whether he should improve his product, and if so, how can he do so. Second, he can conduct surveys to identify the problems recognized by his customers.
A marketer can also conduct activity analysis focusing on consumers’ particular activity, such as how breakfast items are prepared. A product analysis may also be undertaken to identify consumers’ problems or problems using a particular product.
Another technique used in identifying problems consumers recognize to undertake problem analysis. Here, consumers are requested to identify the problems they face and give suggestions relating to such problems.
Marketing Mix Decision Aiming at Problem Solution
After the consumers’ problem is identified, a marketer may adjust their marketing mix variables to help consumers overcome problems. This may be done through product modification, changing the distribution strategy channel, adjusting prices, or changing advertising or communication strategy.
Activating Problem Recognition
Marketers themselves may activate problem recognition by the consumers. Marketers may activate problem recognition, first, by influencing the desired state. By emphasizing the benefits of products, marketers may encourage people to buy a particular product they lack actively.
Through advertising, personal selling, and sales promotion activities, marketers can influence consumers’ desired state, causing them to recognize problems. Marketers may also activate problem recognition by influencing perceptions of consumers’ actual state.
For example, an individual buying a particular brand of a product may be given the idea that another alternative is better than one he is having or using. This may also lead to problem recognition by a consumer. Marketers may also activate problem recognition by influencing the timing of problem recognition.
If a consumer thinks of buying a refrigerator before “Eid- Ul-Azha,” he may be given the idea that refrigerators’ prices will rise during Eid time, causing him to recognize the problem now instead of buying later.
Suppressing Problem Recognition
By this time, you are aware of the situations that trigger problems in consumers. Some of the problems recognized by consumers may create problems for certain marketers. In such a situation, marketers try to suppress the problem to be recognized by consumers.
A tobacco marketer may suppress problem recognition by the tobacco users caused by consumer groups or other agencies by developing an advertisement that shows tobacco users in a lively mood.
2. Information Search
The second stage of the purchasing process is searching for information. Once the need is recognized, the consumer is aroused to seek more information and moves into the information search stage.
The consumer may have heightened attention or may undertake an active search for information. The amount of searching a consumer will depend on the strength of his drive, the amount of information he starts with, the ease of obtaining more information, the value he places on additional information, and the satisfaction he gets from searching.
Buyers or customers can get information about goods from different sources.
- Personal sources: This includes family, friends, neighbors, acquaintance, etc.
- Commercial source: This includes advertising, salespeople, dealers, packaging, display, etc.
- Public sources: This includes mass media, consumer rating organizations, etc. they also become confidential to provide information.
- Experimental sources: This includes handling, examining, using, etc. Such information becomes decisive and confidential.
The relative influence of these information sources varies with the product and the buyer. Generally, the consumer receives the most information about a product from commercial sources-those controlled by the marketer.
The most effective sources, however, tend to be personal. Personal sources appear to be even more important in influencing the purchase of services. Commercial sources normally inform the buyer, but personal sources legitimize or evaluate products for the buyer.
For example, doctors normally learn new drugs from commercial sources but turn to other doctors for evaluative information.
The consumer’s awareness and knowledge of the available brands and features increase as they get more information. In designing the marketing mix, a company should make the target customers aware of its brand. Buyers’ sources of information should be carefully identified, and the importance of each source should also be assessed.
Nature of Consumer’s Information Search
Consumers arrive at purchase decisions based on information gathered regarding the product under consideration. They collect information from many different sources.
The effort, a consumer, will put into collecting information from external sources depends on several factors. Once information is gathered, the consumer evaluates them to arrive at the purchase decision.
Understanding how consumers evaluate alternatives is essential from a marketing point of view.
The second step in the buying decision-making process is obtaining purchasing related information to solve the buyer’s problem. Once the consumer is aware of a problem or need, the consumer (if he decides to continue the decision-making process) searches for information.
Such a search may focus on numerous dimensions, such as brands’ availability, product features, sellers’ characteristics, after-sales service, warranties, prices, quality, and use instructions.
How long the consumer will search for information and how intense his search process will depend on his buying the product and the importance of purchase to him.
The consumer may go for both internal as well as an external search of information. Information search is a mental process, and physical activity performed to make decisions and attain the desired goals.
Such a search requires time, energy, as well as money. It may also require a consumer to forego more desirable activities.
Time consumers spent seeking information, and the amount of information a consumer seeks depends on many factors.
A consumer may seek information from within, or he may search externally. If he tries to recollect his memory to help him decide on the brand to buy, he searches internally.
Past purchase experience may help him decide on the desired course of action related to his perceived problem. If he fails to arrive at an appropriate solution to his problem, he may go for an external search.
A consumer may solve some of his recognized problems using his past experiences that he is having with purchases of similar products or brands.
By recalling his memory, he may decide to buy the same brand that he bought before the previous purchase is considered satisfactory.
Marketers can influence internal search through different marketing activities, such as advertising and personal selling, or sales promotion that may remind consumers of the brand he bought last time.
A consumer may go for an external search of information if he fails to find a satisfactory solution to his recognized problem using his stored information.
Externally, he may take friends’, neighbors’, and relatives’ opinions; may rely on information provided by the marketers through different advertising materials; he may go for sampling and gather first-hand experience; or he may gather information reading articles, books, or company brochures, pamphlets, or leaflets.
Sources Used by Consumers in Gathering Information
In seeking information, a consumer may turn to one of several major sources of information. The most widely used source is experience. This is one of the primary sources of information.
Personal experience with a product may provide selected kinds of information to the consumer. This is most vital because such a selected kind of information may not be acquired in any other way by a consumer.
In acquiring information through personal experience, marketers can help consumers significantly. This may be done by distributing free samples, arranging a demonstration of the product, or allowing consumers to use the product temporarily with or without charging any price.
Another important source of information used by consumers includes friends, relatives, family members, neighbors, or associates. This is referred to as a personal source. Consumers rely heavily on their friends, family members, relatives, neighbors, and associates.
The reason is that consumers trust this source more than any other source. Another source of information, as used by the consumers, is the marketing source. It includes salespersons, advertisements, product displays, and packages and labels.
Though such a source provides marketer generated messages, it can influence other information sources that consumers use.
Consumers can also use public or independent sources of information. They include government reports, news presentations, reports from product testing information, and reports published by different consumer groups.
These sources are considered most credible as they are independent sources and are likely to provide the most neutral and factual information. Another most widely used source is the memory search.
Here consumer tries to recollect his memory to find any relevant information if there is any stored in his memory. If a consumer can successfully search for information, it can yield him a group of brands that he may view as possible alternatives.
Factors Influencing the Level of External Search
A consumer goes for an external search if an internal search cannot provide him with sufficient information to solve his recognized problem.
He also goes for an external search if he perceives that the external search benefits will offset its costs. Several factors determine a consumer’s level of external search.
- marketplace characteristics;
- product characteristics;
- consumer characteristics; and,
- situational characteristics.
Let us now have a look at them in turn:
Marketplace Characteristics Influencing the Level of External Search
Certain characteristics of the marketplace determine the level of external search of a consumer. These characteristics affect the level of external search as they determine the costs involved in search and the corresponding benefits that a consumer may derive from such a search.
They include an available number of alternatives, price range, store distribution, and information availability. If there is only one brand available in a particular product category, the consumer does not require an external search regarding that product.
But, if the number of alternative products, brands, and stores is numerous, there will be an extensive external search that a consumer will go for.
The consumer goes for extensive external search if prices of alternatives vary greatly as he intends to make the best utilization of his money being spent on a product. If the stores selling a particular type of product are clustered, the external search will be intense.
But, if stores selling a particular product are situated in dispersed locations, it will reduce the external search level because it involves consumers’ time and money to move around stores.
Instant availability of external information may also increase the level of external search. It provides convenience to the consumer looking at and comparing many alternatives, which helps him make the most appropriate decision to solve his recognized problem.
Product Characteristics Influencing the Level of External Search
Product characteristics such as price level and product differentiation also influence the level of external search of consumers. The consumer will do a limited external search if a product’s price is considered insignificant or very low.
On the contrary, if the price level is high from the consumer’s point of view, he will go for an extensive external search. Product differentiation is another product related characteristic that influences the level of consumer’s external search.
If a consumer perceives many differences between alternative brands, he will heavily be involved in the external search. He may consider competing brands differ in quality, features, design, appearance, or style.
Consumer Characteristics Influencing the Level of External Search
Consumer characteristics, such as learning and experience, personality and self-concept, social class, age and stage in the family life cycle, and perceived risk, may also influence the level of a consumer’s external search of information.
If a consumer is satisfied with his prior purchase and consumption of a particular brand in a product category, he will go for repeat purchase instead of searching externally for more information on that product category (applies in case of habitual or routine purchase).
One’s personality characteristics and self-concept also influence his level of external search of information.
An individual who considers himself a deliberate information seeker will go for extensive external search. A person of an authoritarian type of personality will go for less external search. The social class of a consumer is another determinant of the level of external search.
Generally, lower and middle-class people go for more external searches than upper-class people. The level of information search decreases with an individual’s age as his learning and maturity increase. Families in the earlier stages of the life cycle involve them heavily in external information search.
With the increase in risk perception, the level of external search increases as the consumer tries to minimize his dissatisfaction with the purchase and consumption.
Situational Characteristics Influencing the Level of External Search
Situations surrounding consumers influence his level or intensity of external search. If a consumer, for example, is time-pressed, he will go for a limited external search.
A consumer will reduce his search if he finds shops are overcrowded that he visits. He may also search less for information if he considers a desirable purchase offer made by a seller.
The physical and mental conditions of a consumer may also influence his level of external search. If he is not physically or mentally energetic, he will reduce his level of external search.
Marketing Strategies Based on Information Search Patterns
While developing marketing strategies, a marketer should actively consider the information search patterns of his target consumers. The following discussion will illustrate the strategy implication concerning the information search patterns of consumers.
If a marketer finds that his brand falls in the routinely purchased product category, he should reinforce consumers’ existing behavior patterns.
He can maintain product quality, ensure regular distribution, and reinforce consumers through persuasive advertising. He should also combat competitive, disruptive activities immediately.
If a marketer finds that his brand is not included in the buyer’s evoked set of alternatives, he may try to disrupt the existing decision pattern by product improvement and persuasive marketing communication that attracts target consumers’ attention to his brand.
He may also disrupt the existing decision pattern by distributing free samples, reducing price and announcing price cuts, or offering coupons or other inducements to customers.
Where consumers search for limited information, a marketer can identify the places where consumers search for information and then provide them with sufficient attention-getting and influencing information to capture a large market size as possible.
3. Evaluation of Alternatives
With the information in hand, the consumer proceeds to alternative evaluation, during which the information is used to evaluate” brands in the choice set.
Evaluation of alternatives is the third stage of the buying process. Various points of information collected from different sources are used in evaluating different alternatives and their attractiveness.
While evaluating goods and services, different consumers use different bases.
Generally, the buyer evaluates the alternatives based on the product’s attributes, the degree of importance, belief in the brand, satisfaction, etc. to choose correctly.
A marketer must know how the consumer processes information to arrive at brand choices. Consumers do not always follow a simple and single evaluation process. Rather several evaluation processes are in practice.
Consumer evaluation processes can be explained with the help of some basic concepts.
- First, it is assumed that each consumer sees a product as a bundle of product attributes. For refrigerators, product attributes might include cooling capacity, size, space, price, and other features. Buyers will pay more attention to those attributes relevant to their needs.
- Second, the importance of depending upon their needs and wants.
- Third, the consumer will develop a set of brand beliefs about where each brand stands on each attribute. The set of beliefs buyers hold about a particular brand is called brand image. Based on the buyer’s experience and the effects of selective perception, distortion, and retention, the consumers’ beliefs may differ from actual attributes.
- Fourth, the consumer’s expected total product satisfaction will vary with the changes at the levels of different attributes.
- Fifth, the consumer develops attitudes toward the different brands through some evaluation procedure. Buyers use one or more of several evaluation procedures, depending on the consumer and the buying decision.
The mode of evaluating purchase alternatives depends on the individual consumer and the specific buying situation. In some instances, consumers apply meticulous calculations and logical thinking.
In other situations. The same consumers may not make any evaluation. Rather they buy on impulse and use intuition.
Sometimes consumers themselves make buying decisions. At other times they rely on friends, consumer guides, or salespeople for buying advice. Marketers should study buyers to know how they evaluate brand alternatives.
Marketers can take appropriate steps to influence the buyer’s decision to know what the buyers follow evaluative processes.
4. Purchase Decision
At this stage of the buyer decision process, the consumer buys the product. After the alternatives have been evaluated, consumers decide to purchase products and services. They decide to buy the best brand. But their decision is influenced by others’ attitudes and situational factors.
Usually, the consumer will buy the most preferred brand.
But two factors might influence the purchase intention and the purchase decision. The first factor is the attitudes of other people related to the consumer.
The second factor is unexpected situational factors. The consumer may form a purchase intention based on factors such as expected price and expected product benefits.
However, unexpected events may alter the purchase intention. Thus, preferences and even purchase intentions do not always lead to actual purchase choice.
5. Post-Purchase Evaluation
In the buyer decision process’s final stage, post-purchase-purchase behavior, the consumer takes action based on satisfaction or dissatisfaction.
In this stage, the consumer determines if they are satisfied or dissatisfied with the purchasing outcome. Here is where cognitive dissonance occurs, “Did I make the right decision.”
At this stage of the buyer decision process, consumers take further action after purchase based on their satisfaction or dissatisfaction.
What determines whether the buyer is satisfied or dissatisfied with a purchase?
The answer lies in the relationship between the consumer’s expectations and the product’s perceived performance.
If the product falls short of expectations, the consumer is disappointed; if it meets expectations, the consumer is satisfied; if it exceeds expectations, the consumer is delighted.
Final words: Consumers go through the 5 stages of the decision process to purchase any goods or services.
Napoleon said that nothing is more difficult than to be able to decide. The same is true for consumer’s decision making, and, as a result, marketers are keen to understand the consumer decision-making process.
Buyers form their expectations on information they receive from sellers, friends, and other sources.
If the seller overstates the product’s performance, consumer expectations will not be met, and dissatisfaction will occur.
The wider the gap between expectations and performance, the greater the consumer’s dissatisfaction. This implies that sellers claim that the product’s performance should be genuine so that buyers are satisfied.
It is also found that some sellers understate performance levels to enhance consumer satisfaction with the product.
For example, Boeing sells aircraft worth ten million dollars each, and consumer satisfaction is important for repeat purchases and the company’s reputation.
Boeing’s salespeople tend to be conservative when they estimate their product’s potential benefits. They almost always underestimate fuel efficiency – they promise a 5 percent saving that turns out to be 8 percent.
Customers are delighted with better-than-expected performance; they buy again and tell other potential customers that Boeing lives up to its promises.
In almost all purchases, buyer experience cognitive dissonance. Cognitive dissonance is the discomfort felt by the buyers due to the post-purchase conflict.
Customers are happy with the benefits of the chosen brand and forget the benefits of brands not bought. Also, they feel unhappy about the chosen brand’s demerits and remembers the benefits of the brands not chosen.
Here, the consumer makes a compromise. Thus, buyers experience some post-purchase-purchase dissonance for every purchase.
So, to reduce cognitive dissonance, a company should measure customer satisfaction regularly. The company should seek out and respond to complaints of the customers.
The company can also take other steps to reduce consumer post-purchase-purchase dissatisfaction and help customers feel satisfied with their purchases.
For example, Toyota writes or phones new car owners with congratulations on having selected a fine car.
It places ads showing satisfied owners talking about their new cars (“I love what you do for me, Toyota!). Toyota also obtains customer suggestions for improvements and lists the location of available services.