Understanding Consumer Decision Making

Consumers are the centre of many marketers work. While the consumer is part of the marketing environment, it is also very important to recognise and understand the more personal and specific influences effecting consumers and the nature of the decision making process they use. Research suggests that customers go through a five-stage decision-making process when making any purchase. This is summarised in the diagram below: Figure 1, This model is important for anyone making marketing decisions. It ensures the marketers consider the whole buying process rather than just the purchase decision.

This model implies that customers go through all stages in every purchase they make. However, in more routine purchases, such as cleaning products, customers often skip or reverse some of the stages. For example, a student buying a favourite hamburger would recognise the need which is hunger and go right to the ‘purchase decision’, skipping ‘information search’ and ‘evaluation’. However, the model becomes far more useful when it comes to understanding any purchase that requires some thought and deliberation.

The buying process starts with need recognition. At this stage, the buyer recognises a problem or need (e. g.

I am hungry) or responds to a marketing stimulus (e. g. you pass Starbucks and are attracted by the aroma of coffee and chocolate muffins). An “aroused” customer then needs to decide how much information is required. If the need is strong and there is a product or service that meets the need close to hand, then a purchase decision is likely to be made there and then.

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If not, then the process of information search begins. A customer can obtain information from several sources: •Personal sources, such as family and friends •Experimental sources such as handling and examining the product •Public sources, such as newspapers and television Commercial sources, such as advertising, retailers and packaging The usefulness and influence of these sources of information will vary by product and by customer. Research suggests that customers value and respect personal sources more than commercial sources (the influence of “word of mouth”). The challenge for the marketing team is to identify which information sources are most influential in their target markets. There are many factors that have an effect on buyer behaviour, Cultural factors have a significant impact on customer behaviour.

Why Is It Important For Marketers To Understand Consumer Behavior?

Culture is the most basic cause of a person’s wants and behaviour. Growing up, children learn basic values, perception and wants from the family and other important groups. Marketing are always trying to spot “cultural shifts” which might point to new products that might be wanted by customers or to increased demand. For example, the cultural shift towards greater concern about health and fitness has created opportunities (and now industries) servicing customers who wish to buy:
• Low calorie foods
• Health club memberships
• Exercise equipment
• Activity or health-related holidays etc.

Similarly the increased desire for “leisure time” has resulted in increased demand for convenience products and services such as microwave ovens, ready meals and direct marketing service businesses such as telephone banking and insurance. A customer’s buying behaviour is also influenced by social factors, such as the groups to which the customer belongs and social status. In a group, several individuals may interact to influence the purchase decision. The typical roles in such a group decision can be summarised as follows: Initiator The person who first suggests or thinks of the idea of buying a particular product or service Influencer

A person whose view or advice influences the buying decision Decider The individual with the power and/or financial authority to make the ultimate choice regarding which product to buy Buyer The person who concludes the transaction User The person (or persons) who actually uses the product or service As time is changing it is becoming increasingly obvious that roles are changing within families, as increasingly more women are working full time, therefore marketer need to understand how this might affect demand for products and services and how the promotional mix needs to be changed to attract male rather than female buyers.

Stimulus response model of buying behaviour suggest that a consumer’s emotions can be a mediating factor in the purchase process. Marketing stimuli consists of the marketing mix products, price, place & promotion and other stimuli include other forces in the buyer’s environment: economic, technological, political and cultural. All these inputs enter the buyer’s black box, where they are turned into a set of observable buyer responses, i. e. product choice, brand choice, dealer choice, purchase timing and purchase amount.

How the stimuli changes into responses inside the consumer’s black box is in two parts: 1 buyer characteristics and 2 buyer decision process, the buyers characteristics effects how he or she perceives and reacts to the stimuli, then the buyers decisions making process effects the buyers behaviour. The final stage is the post-purchase evaluation of the decision. It is common for customers to experience concerns after making a purchase decision. This arises from a concept that is known as “cognitive dissonance”.

The customer, having bought a product, may feel that an alternative would have been preferable. In these circumstances that customer will not repurchase immediately, but is likely to switch brands next time. To manage the post-purchase stage, it is the job of the marketing team to persuade the potential customer that the product will satisfy his or her needs. Then after having made a purchase, the customer should be encouraged that he or she has made the right decision.