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The Consumer Decision Process

LO1 Articulate the steps in the consumer buying process.

The consumer decision process model represents the steps that consumers go through before,during, and after making purchases.5Because marketers often find it difficult to determine how

consumers make their purchasing decisions, it is useful for us to break down the process into a

series of steps and examine each individually, as shown inExhibit 5.1.

Need Recognition

the consumer decision process begins when consumers recognize they have an unsatisfied needand they would like to go from their actual, needy state to a different, desired state. The greater

the discrepancy between these two states, the greater the need recognitionwill be. For example,

your stomach tells you that you are hungry, and you would rather not have that particular feeling.

If you are only a little hungry, you may pass it off and decide to eat later. But if your stomach isgrowling and you cannot concentrate, the needthe difference between your actual (hungry)

state and your desired (not hungry) stateis greater, and youll want to eat immediately to get toyour desired state. Furthermore, your hunger conceivably could be satisfied by a nice healthy

salad, but what you really wantis a bowl of ice cream. Wantsare goods or services that are not

necessarily needed but are desired.6Regardless of the level of your hunger, your desire for ice

cream will never be satisfied by any type of salad. Consumer needs and wants like these can beclassified as functional, psychological, or both

Search for Information

The second step, after a consumer recognizes a need, is to search for information about thevarious options that exist to satisfy that need. The length and intensity of the search are based on

the degree of perceived risk associated with purchasing the product or service. If the way yourhair is cut is important to your appearance and self-image, you may engage in an involved search

for the right salon and stylist. Alternatively, an athlete looking for a short buzz cut might go to

the closest, most convenient, and cheapest barber shop. Regardless of the required search level,there are two key types of information search: internal and external.

Evaluation of Alternatives

Once a consumer has recognized a problem and explored the possible options, he or she must siftthrough the choices available and evaluate the alternatives. Alternative evaluation often occurs

while the consumer is engaged in the process of information search. For example, Katie Smith

would rule out various stores because she knows they wont carry the style she needs for the jobinterview. Once in the store, she would try on lots of dresses and eliminate those that dont fit,

dont look good on her, or arent appropriate attire for the occasion. Consumers forgo alternative

evaluations altogether when buying habitual (convenience) products; youll rarely catch a loyalPepsi drinker buying Coca-Cola.

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Purchase and Consumption

After evaluating the alternatives, customers are ready to buy. However, they dont always

patronize the store or purchase the brand or item on which they had originally decided. Theirchoice may not be available at the retail store or there may be some other stumbling block.

Retailers use the conversion rateto measure how well they convert purchase intentions intoactual purchases. One method of measuring the conversion rate is the number of real or virtualabandoned carts in the retailers store or on its website.

Retailers use various tactics to increase the chances that customers will convert their positiveevaluations into purchases. They can reduce the number of abandoned carts by making it easier

to purchase merchandise. Most important, they should have the merchandise in stock that

customers want. They can also reduce the actual wait time to buy merchandise by having more

checkout lanes open and placing them conveniently inside the store. To reduce perceived waittimes, they install digital displays to entertain customers waiting in line.

26

The conversion rate is particularly low for consumers using an Internet channel because they areable to look at products, throw them in their cart, and delay a purchase decision. To encourage

customers to make a purchase decision,Zappos.comandOverstock.comcreate urgency by

alerting customers when an item they have put in their shopping cart is almost sold out. Othersites, such as Gilt, offer items for a specified 36-hour period or until they run out, and Neiman

Marcus runs two-hour, online-only sales. Many retailers send reminder e-mails to visitors about

items in carts they have abandoned.27

Postpurchase

The final step of the consumer decision process is postpurchase behavior. Marketers are

particularly interested in postpurchase behavior because it entails actual rather than potentialcustomers. Satisfied customers, whom marketers hope to create, become loyal, purchase again,

and spread positive word of mouth, so they are quite important. There are three possible positive

postpurchase outcomes, as illustrated inExhibit 5.3:customer satisfaction, postpurchasecognitive dissonance, and customer loyalty (or disloyalty).

Qno2 consumer behavior factor affecting

consumer behavior: it is the study of consumers and the processes they use to choose, use(consume), and dispose of products and services.

Factor affecting

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Culture

Culture is one factor that influences behaviour. Simply culture is defined as our

attitudes and beliefs. But how are these attitudes and beliefs developed? As an

individual growing up, a child is influenced by their parents, brothers, sister and other

family member who may teach them what is wrong or right. They learn about theirreligion and culture, which helps them develop these opinions, attitudes and beliefs

(AIO) . These factors will influence their purchase behaviour however other factors

like groups of friends, or people they look up to may influence their choices of

purchasing a particular product or service. Reference groups are particular groups of

people some people may look up towards to that have an impact on consumer

behaviour. So they can be a singer like the Lady Gaga or your immediate family

members. Opinion leaders are those people that you look up to because your respect

their views and judgments and these views may influence consumer decisions. So it

maybe a friend who works with the IT trade who may influence your decision on what

computer to buy. The economical environment also has an impact on consumer

behaviour; do consumers have a secure job and a regular income to spend on goods?

Marketing and advertising obviously influence consumers in trying to evoke them to

purchase a particular product or service.

Social Status

People's social status will also impact their behaviour. What is their role within

society? Are they Actors? Doctors? Office worker? and mothers and fathers also?

Clearly being parents affects your buying habits depending on the age of the children,

the type of job may mean you need to purchase formal clothes, the income which is

earned has an impact. The lifestyle of someone who earns 250000 would clearly be

different from someone who earns 25000. Also characters have an influence on

buying decision. Whether the person is extrovert (out going and spends on

entertainment) or introvert (keeps to themselves and purchases via online or mail

order) again has an impact on the types of purchases made.

Qno 3

Role of consumer behavior in Adversiting

Advertising used properly is a major tool in the hands of marketing

managers which helps enable them to sell products, services and ideas.

The idea is to sell products to the consumers. This has been proved by

the fact that companies are investing a lot of time and resources into

developing ad campaigns for their products

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Advertising has gone through many phases. The first era was

production-oriented. Here mass production was seen as a means to

selling products by pumping in huge volumes into the market place. As

a result demand exceeded supply; hence there was no need to

advertise products (Holt, D,1983). They sold themselves.

However with the passing of time and due to rising competition,

surplus goods were available. As a result of this companies were

required to sell their products using a sales oriented mechanism. This

typically involved pitching in their products, highlighting their USPs, so

as to convince customers to buy their products rather than their

competitors. As a result products became de linked to the volumes in

which they were being produce (Belk, Russell.1974).

To better approach the problem of selling companies tried many

techniques. These techniques combined with the support activities of

marketing can be called as advertising. Advertising has been considered

important since the time when trade started, then was the time for

advertising by mouth, now we have different media platforms for the

same purpose. But still the traditional word of mouth holds the best

appeal in respect to all advertising platforms.

In its initial phases advertising was limited in both time and space.

Broadcast commercials are generally 10 to 60 seconds in length. Print

ads are generally no larger than two pages, and often much smaller.

Advertising therefore needed to do its job in an effective manner. Its

primary tasks were to capture the consumers attention, identify itself

as being aimed at meeting the needs of that consumer, identifying the

product, and delivering the selling message.

How does Adversiting motivate consumer

Advertising influences people through education, persuasion andreassurance. It also influences the shopping experience, by makingshopping simpler and helping to moderate the prices of advertised

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Advertising is an effective means of communicating information aboutproducts and services to a large number of consumers at once. Thisinformation plays a key role in educating people about different brands'functions and features, like how they work, what they cost and where theycan be purchased. Because the information in ads comes directly from themanufacturer, it is more likely than secondhand reports to be verifiable andreliable. This helps buyers make choices most likely to satisfy their

Using creative techniques like direct brand comparisons, advertising canpersuade people that one product will be better than another in improvingtheir lives or delivering benefits they seek. It can often motivate them totake immediate action, like trying a new brand, redeeming a coupon orrequesting more information. dvertising also encourages people to buy inbigger volume and/or more frequently than they otherwise would.

Qno 4 consumer psychology

Consumer psychology is a specialty area that studies how ourthoughts, beliefs, feelings and perceptions influence howpeople buy and relate to goods and services. One formaldefinition of the field describes it as "the study of individuals,groups, or organizations and the processes they use to select,secure, use, and dispose of products, services, experiences, orideas to satisfy needs and the impacts that these processeshave on the consumer and society"."

Geographic segmentation: Where?A market can be divided according to where consumers are located. On atrip abroad you might have noticed that people enjoy more outdooractivities than back home. You could also be surprised by the amount ofpeople that like drinking hot coffee at the beach in Rio de Janeiro. If youvisit this website you will see differences in food preferences around the

world.

Understanding cultural differences between countries could be pivotal forbusiness success, consequently marketers will need to tailor theirstrategies according to where consumers are.

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Qno 2

2.2Family Life-Cycle Influences on Consumption Patterns

LEARNING OBJECTIVE

1. Explain the family life cycle and its influences on consumption.

In 1960, about three-quarters of all adults ages eighteen and older were married; today we find

ourselves in a country where that fraction is down around one-half. Consider France and Sweden,

where the number of children born outside marriage is 48 percent and 56 percent, respectively.

These children are not necessarily born to single parents, as the data favor cohabitating, committed

couples.[1]These numbers indicate an important trend when looking at the family unit and family life

cycle.

While household and family composition has changed, it is still important to consider the

consumption changes that may occur as individuals move from living with parents to creating their

own households, either alone or with others, over the course of their lives. What kinds of products

are purchased and consumed by what types of families and households? To answer this question, we

must first understand that just as individual consumers and their buying habits differ from person to

person and from situation to situation, each family or household has similar variations. Several

factors influence the ways in which they spend. Most important among them are family life cycle (or

life stage)position, reference group, social class, subculture, and culture. Lets now turn our attention

to family life cycle. As people find themselves in various positions in the life cycle, such as single,

married, married with children, or widowed, their needs change. Hence different mixes or types of

products or services are required to allow them to properly function.

Figure 12.1Stages of the Family Life Cycle

One main concern of marketing research firms is how to identify the similarities and

differences between various life-stage segments.

Source: Courtesy of Mediamark Research, Inc.

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One approach divides the family life cycle (FLC) into five clear stages, as shown inFigure 12.1 "Stages

of the Family Life Cycle":young singles, newlyweds,young couples, households with teens, and mature

couples. Other approaches to life-cycle divisions include additional groupings such as retired couples

and solitary survivors. The basis for the various life-cycle categorizations include such demographic

factors as age of the household head, marital status of the household head, presence of children, ages

of children, presence of children in college, employment status of the household head (working,

receiving government financial assistance, or retired), employment status of the spouse (if any),

number of other adults, household size, and survivor status of the household head (retired and

widowed or single).[2]In its early incarnations, the FLC would often assume that marketers should

think of FLC categories in a progressive mannerthat everyone moved through

fromsingleto marriedto empty nestcategories. As noted earlier, the family has undergone significant

changes in the recent past in regards to remaining single, single parents, couples without children,

and unmarried same-sex couples. Still, it is important to remember that categories of the FLC can

provide valuable insights into consumption patterns. If you look at the stages, it becomes clear that

product mixes would probably shift based on the needs of members of each category. Marketers can

position their offerings to help facilitate easier transitions from one stage to another.

The following sections lay out the five life stages mentioned for such a comparison.[3]

Young SinglesYoung singles between eighteen and twenty-four represent 7.8 percent of all adults

in the United States. The majority of them live with parents; a minority, one in four,

live with roommates. These consumers are much more likely than other adults to

buy snack foods, cookies, and ice cream. They share, to some degree, grocery-

shopping chores. They tend to buy more staples such as bread, butter, canned soup,

spaghetti sauce, laundry detergent, and facial tissue than does the average adult.

They also consume more beer, ale, wine, and spirit coolers. Discretionary income is

spent mostly on entertainment, movies, compact discs, sports and recreation

equipment, and shoes. Ownership of motorcycles by this group is 15 percent above

average. Young singles tend to be heavy magazine readers, television viewers,

computer/Internet users, and cell-phone users. The programming they prefer is late-

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magazines and watch less television than do young singles. Their favorite programs

are weekend baseball, weekend professional basketball, and news specials.

Married Couples with Children

Married couples with children are divided into two groups with very different

lifestylesdual-earner couples and other married couples (typically a working

member and a homemaker member). Dual-earner couples make more money than

other married couples, they have less free time, and their home life is often more

hectic. The ages of the children directly affect the consumption patterns of the

family. Having preschool children brings the need for day care, baby foods, early

childdevelopment learning materials, and so on. When the children enter grade

school, there are needs such as school clothing, sports equipment, skill lessons

(dance, music, sports, etc.), youth-group activity support, and peer-influenced

clothing and music. Having preteens in the family also affects product and service

needs. What would be some of these changes? The distinction between the two

groups is reflected in popular television shows.[4]Which current television shows do

you think are targeted to these two different types of families?

Households with Teenagers

Totaling 30.6 million people, households with teenagers have an average family

income of $30,000, more than 24 percent above the average. In the majority of

households, both spouses are employed. Households with teenagers tend to buy

more than the average quantities of brownie and cookie mixes, ice cream, ice milk

and sherbet, snack cakes, salty snacks, frozen pizza, and pizza mixes. They typically

own cars, motorcycles, recreational vehicles, audio equipment, and compact discs.

Television viewing includes late-night movies, drama, early morning news, and

weekend sports.

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