Consumer Decision Making-Process

Challenged with competing products, companies are finding it more important to understand why a consumer would choose one product over another. To do this, the company needs to recognize the complex decision-making process a consumer goes through. The variety of products is always expanding, but with the consumers’ limited temporal and cognitive resources, they cannot simply analyze all the products.

Making rational choices does not only require access to options, but also the necessary time and information needed to choose.

Consumers increasingly face information overload and consequently are unlikely to process all available product or service specifications.

Marketers can strategically design the information given to consumers are such the options being promoted appear more attractive causing the consumer to make the decision to purchase.

Elements of the Decision-Making Process

There are five elements of consumer behavior that lead to a purchasing decision. The first element is problem recognition; the consumer comprehends a need, difference between a perfect and a genuine situation. The situation can be as simple as seeing there is no bread left. Second information search, the consumer is looking for value. This is where clarification of options is revealed to the consumer and many involve internal and external search. Next is assessment of other possibilities. What standards will be used and what is the perceived value in making the purchasing decision. Fourth is the decision to purchase. This involves when, to buy, who to buy from, or if to buy at all. When to buy will come from influences like store atmosphere, time, is there a sale happening, and the shopping experience. Who to buy from will depend on the terms of the sale, past experience with the seller, and the return policy.

If all the factors do not fit what the consumer is looking for the consumer may and will chose not to buy. Fifth is post-purchase behavior. Once the consumer makes the decision to purchase, he or she will compare the likelihood the buying decision meant expectations, this will leave the buyer either satisfied or dissatisfied. Pleasure or disappointment will affect the consumer’s impression of value, any communications and recurring purchase activities. Companies work to establish a positive after purchase communication with the consumer to build a relationship with the buyer for continued business. At this point companies understand the consumer may have tension or anxiety following a purchase, this is cognitive dissonance. (Price, Zinkahn 2004)

Cognitive dissonance is the perception of incompatibility of two cognitions. Cognitions are processing information applying knowledge and changing preferences, it is reasoning, perception, and learning. Cognitive dissonance is any element of knowledge, attitude, emotion, belief, or behavior. (Price, Zinkahn 2004)

An example follows. Jane purchases a new computer. After little or no consideration of various computers, Jane chooses one. While Jane’s choice is in agreement with the facet of his choice and with the imperfections of the computers she has rejected: it is dissonant with any know or unknown faults of her choice and the good appearance of the rejects. If Jane’s dissonance is enlarged enough by reviews of the computer she has chosen, rating the computer poorly, or if she finds her friends computers leave her new purchase lacking, Jane will start to be weighed down by her computer and start to second guess her choice. If Jane had a first choice in a computer and it was not available causing her to settle for the lesser choice then that first choice computer becomes accessible Jane will feel an immediate boost in the second choice computer’s previously subdued dissonance.

Jane will perceive complete cognitive dissonance when dissonances outweigh consonance. Jane can try to decide to change the imbalance in favor of consonance by exchanging her computer to meet her expectations. If a trade is not possible and if Jane is cognitively dissonant enough she may discard the computer and buy another that is less dissonance provoking, consonance should always outweigh dissonance. (Festinger 1957). Many companies use ads and follow-up calls to convince buyers they have made the right choice.

How to Use Process to Drive Buyer’s Actions

Before the decision-making process can be used to drive a buyer’s action, buyer behavior has to be defined. The purchasing response is the choice method and action of consumers in obtaining and use of a product. Questions that have to be answered are why do people make the buying choice they make, what influences that particular purchase, what aspect is changing in our society?

There are six areas to the exchange process for consumers. The first area is the consciousness of a problem or a want. This is the distinction of a preferred state and the real condition, with hunger a person realizes it is time to eat. Second is information, internal and external influences will be at work here. The consumer will use acquaintances, family associates for word of mouth. With this research comes information for a consumer to have other options. Third is assessment of choices. This is where the buyer decides what they want or do not want. Fourth is the decision to buy, this includes packaging, the product, and the place. Fifth, now is the time the purchase. Sixth is either satisfaction, dissatisfaction. The consumer decides if her or she made the correct choice, or for some reason did the product not meet expectations. (Hawkins et al 2004)

Those trying to get a message to consumers need to keep Maslow’s Hierarchy of needs in mind when planning strategy to persuade the customer into buying their products. Those needs come in order of physiological; this would be food or water. The second is safety, the third is belonging. The fourth is status and the fifth is self actualization. (Maslow

Impact of Consumer Satisfaction

According to Price and Zinkahn (2004) “the definition of consumer satisfaction is a judgment of a pleasurable level of consumption-related fulfillment.” “Satisfaction is social and cultural.” If a customer is not satisfied with a product of service the cost to the company can be one or more of the following, the consumer will not purchase again, the consumer will complain, not only to the organization but to friends, family and coworkers. If the customer complains to friends, family, and coworkers a company probably will not gain this group as customers. If a consumer is satisfied he or she will continue as a customer. Customer loyalty is the goal of every company. Having a consumer become a repeat buyer leads to profits for the company. If a customer is happy with a company they will tell others of the wonderful experiences with a company. Consumers may communicate “twist”. “Twist is positive and negative ways a consumer structures meanings, roles, and objects in the market place.” (Price, Zinkahn 2004)

Conclusion

Marketers need to understand the role of involvement and habit, information processing and the concept of life values in consumer behavior as well as cultural determinants. The behavioral sciences such as sociology and psychology are paramount in achieving this goal. Consumers’ demand for an exciting variety of new products puts ceaseless strain on companies to constantly try to understand consumer behavior. Marketing products thus becomes pointless if the marketers are unaware of the consumers’ needs and wants. Without the knowledge of the varying areas of behavioral sciences it would be difficult for marketers to identify the characteristics of their consumers and they would be unable to achieve maximum sales and product potential

References:

Arnould, E, Price, L & Zinkahn, G (2004) Consumers (2nd ed.) [University of Phoenix Custom

Edition e-text]. McGraw Hill/Irwin, 2004, New York, NY. Retrieved September 27, 2006 from University of Phoenix, Resource, MKT/463Marketing Website; https://ecampus.phoenix.edu/secure/resource/resource.asp

Festinger, L. (1957). A theory of cognitive dissonance. Stanford, CA: Stanford University

Press. Retrieved October 19, 2006 from http://www.ciadvertising.org/student_account/spring/spring_02

Hawkins, D, Best, R. & Coney, K. (2004). Consumer Behavior (9th ed.) [University of

Phoenix Custom Edition e-text]. McGraw Hill, New York, NY. Retrieved September 27, 2006 from University of Phoenix, Resource, MKT/463Marketing Website; https://ecampus.phoenix.edu/secure/resource/resource.asp

Maslow, A (1943) Maslow’s Hierarchy of Needs, A Theory of Human Motivation. Retrieved October 21, 2006 from http://www.ship.edu/~cgboeree/maslow.html