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Buyer Decision-Making Process

By odlup007 Mar 22, 2011 1421 Words
The buyer’s decision-making process is a way to better understand the way consumers go about when purchasing a product or service. It gives marketers a great insight into the world of buyers and the factors that affect their final decision, such as emotions, environment, and attribute-based decisions. It is a complex process in which internal and external factors have an impact on the buying decisions of the consumer. There are five stages through which a consumer passes, before coming to a decision on the final product or service to be purchased. These stages are: problem recognition, information search, evaluation of alternatives, purchase process and post-purchase process. Problem recognition is the first stage of the buyer’s decision-making process. Problem recognition involves recognising the existence of discrepancy between the consumer’s desired state (what the consumer would like) and the actual state (what the consumer perceives as already existing). Both the desired state and the actual state are influenced by the consumer’s lifestyle and current situation (Hawkins, 2004). A few examples to illustrate the argument stated above would be Chris may recognize that his computer isn’t performing as well as it should or his Teac LCD TV quit working. All these are problems in which the actual state and the desired state are different. Hawkins, 2004 claims that when the desired state is perceived as being greater than the actual state then a problem exists. This can be triggered by stimuli, internal and external ones. Internal stimuli are the forces which arise from within. In Chris’s situation it might be feeling bored and angry not being able to watch his favourite TV shows. External stimuli are the outside factors that influence him to do or buy something. Things such as: advertisements on TV, or passing by a TV retail store such as: Harvey Norma, JB HI FI can influence Chris. When this occurs, Chris will try to find a solution to the problem and as a result the consumer starts the information search process. The second stage of this process is the information search. In this stage consumers begin the information search process by conducting an internal search of what they’re looking for and what will fulfil their need and desire on a personal level. This would be followed up with an external search for information from friends, family members, salespeople, and advertisements. This phase provides consumers with criteria for assessing product alternatives and results in a set of potential choices. (Lake, 2009) In Chris’s case, he might decide to pay more attention to product information of TV’s and get more additional information such as checking the Yellow Pages to see who repairs his brand of television, read TV magazines, visit stores, and ask around friends and family. By gathering information the consumer learns more about some brands that compete in the market and their feature and characteristics. Gathering all the information helps Chris learn more about TV brands, and the competing brands in the market (Samsung, LG, Panasonic, Sharp).There is a total set of brands available to Chris, but he will become more aware of only a subset of the brands in the market (awareness set). Some of these brands may satisfy his initial buying criteria, such as price and processing speed (consideration set). As Chris proceeds to more information search, only a few will remain as strong candidates (choice set). (www. faculty.babson.edu/isaacson/M_E7000/cons/cons1.doc)

The evaluation of alternatives stage is where the gathering of the previous information is analysed with the purpose of evaluating the most preferred options available and coming to a final decision. In this stage consumers use the performance levels to compare different brands in the light of their particular consumption problem. The number, type and importance of evaluative criteria used differ from consumer to consumer and across product categories. (Hawkins, 2004). In the TV example, a lot of thought has been put into the research, and Chris has looked at a number of brands and has compared and contrasted the features by using a set of criteria’s for making the decision such as: cost, brand, features and warranty. He has looked for products with a certain set of attributes that deliver the benefits he’s after and is within the budget. There are 3 types of choice processes when deciding between products and services: affective choice, attitude-based choice, and attribute choice. Affective choice is when a consumer will make a choice based on his feelings (it feels right) and makes them feel good about themselves. This leads to buyers purchasing the product even though it doesn’t contain all the features they’re looking for. On the other hand, the attitude-based choice is when the consumer goes through the entire process from need to research to evaluation, and will make sure that the product meets each and every need that has been identified. (Lake, 2009) Furthermore, the attribute choice is strictly based on benefit and feature-by feature comparisons across specific brands or products. The consumer making this choice will be sitting down and going through each feature or benefit one by one and crossing a product off when it doesn’t correspond with their need. The product that’s left is the one on consumer purchases (Lake, 2009). In Chris’s example, he would most likely be using the attribute choice, where he would classify each TV, listing each feature and comparing those, making sure he gets the best TV with most of the features he’s looking for within the price range. Purchase decision is the next step in this stage. In this step, the consumer determines where to purchase and how to purchase as well as when he should purchase (Lake, 2009). This is where the brand is selected as well as the outlet from which the product will be bought. Neal, Quester, Hawkins, 2004 claim there are three ways these decisions can be made: 1) simultaneously; 2) item first, outlet second; or 3) outlet first, item second. In many situations, consumers engage in a simultaneous selection process of stores and brands. In Chris’s Teac LCD TV example, he may chose a set of brands based on both the product’s technical features (attributes) and availability of brands in the TV stores and mail-order catalogues he knows well. It is also possible that he decides where to buy (e.g. Harvey Norman) and then chooses one or two brands the store carries (Samsung, LG). Once the brand and outlet have been decided, the consumer moves on to the transaction The last stage of the process is the post-purchase stage. As Best, Hawkins, and Coney (2001) suggests, following some purchases, consumers experience doubts or anxiety about the wisdom of the purchase, and may feel that an alternative would’ve been preferable. In Chris’s case he might realise that LG would’ve been a better alternative than the Samsung TV he purchased, as LG had a better warranty and features, leading to post-purchase cognitive dissonance. By understanding the behaviours of consumers, more informed decisions can be made, that can increase customer retention and profitability for organisations. Considering the fierce competition among companies, this process is vital to the success of on organisation, having a greater chance of winning their business.

References:

East, R. (1997). Consumer Behaviour: Advances and Applications in Marketing. Hertfordshire: Prentice Hall Europe. Fairhurst, A.E., Susan, S. (2001). Retail buyer’s decision-making process. An investigation of contributing variables. International Review of Retail, Distribution & Consumer Research , 1(1), 87. Retrieved from http://ezproxy.lib.monash.edu.au/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=buh&jid=5BF&site=ehost-live Hawkins, D.I., Best, R.J., & Coney, K.A. (2001). Consumer Behavior: Building Marketing Strategy (8th ed). New York: McGraw-Hill Lake, L. (2009). Consumer behaviour for dummies. Retrieved from http://lib-wu-prweb1.lib.rmit.edu.au/ Neal, C., Quester, P., & Hawkins D. (2004). Consumer behaviour: implications for Marketing Strategy (4th ed). Australia: McGraw-Hill Rowley, J. (1997). Focusing on customers. School of Management and Social Sciences, 46(2), 81-89. doi: 10.1108/00242539710160938 Widing, R., Sheth, J. N., Pulendran, S., Mittal, B., & Newman,B. I. (2003). Consumer behaviour: consumer behaviour and beyond (pacific rim ed). Australia: Thomson Learning Australia Matsuno, K. (n.d.) Note on Consumer Decision Making Processes. Retrieved from http://faculty.babson.edu/isaacson/M_E7000/cons/cons1.doc

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