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The Consumer Decision Process
- 1. The Consumer Decision Process By: Alex Ma
- 2. What is it? -It is a 5 step process that consumers go through before, during and after making a purchase -The 5 steps are: Need Recognition Information Search Alternative Evaluation Purchase and Consumption Post-Purchase -Let’s take a closer look at each step in the next few slides
- 3. Need Recognition -The process begins when consumers realize they have an unsatisfied need -Consumers would like to go from this state of dissatisfaction to a desired state -The greater the difference between these states, the greater the need recognition -There are 2 types of consumer needs ● Functional Needs ● Psychological Needs -There can also be a combination of the two -Let’s learn more about these needs next…
- 4. Functional & Psychological Needs -Functional Needs refer to the performance of a product or service Ex: Shoes protect feet, Purses/bags allow you to carry multiple items at once -Psychological Needs refer to the gratification one associates with a product or service Ex: Kate Spade has unique, perhaps not practical purses, but people who love the unique shapes and styles will purchase them regardless Kate Spade Sundae purse
- 5. Information Search -Once a need is recognized, it is time to search for existing options that will satisfy the need -How long consumers spend searching depends on what the product or service is ● Ex: looking for a new car or home is going to take longer to search for than searching for a place to eat dinner -2 types of information search: Internal & External Internal: Buyer uses their own memory & knowledge about products or services gathered through past experiences External: Buyer looks at information outside their personal knowledge to help with the buying decision ● Google search, asking friends/family for help, asking sales associates for help
- 6. Alternate Evaluation -After and during a search, consumers go through the choices available and evaluate alternatives, if any -Consumers categorize alternatives between 2 subsets: Retrieval Sets & Evoked Sets ● Retrieval Sets: Brands or stores brought up from memory ● Evoked Sets: alternative brands/stores that consumer considers buying from when making a purchasing decision ○ Ex: When I want to buy a Nintendo Switch game, I go to Target (Retrieval) because they usually have a large selection of games but Wal-Mart and Meijer (Evoked) also sell Nintendo Switch games
- 7. Purchase & Consumption -After searching and evaluating the alternatives, it’s time to purchase! -Consumers can purchase in person at a retail store or online depending on the product or service they decided to purchase ● Retailers may also try to persuade consumers to download their app and purchase from there
- 8. Post-Purchase -The final step is what marketers are interested in: Post-purchase behavior -They want to know if their customers are happy or not -There are 3 post purchase outcomes: ● Customer Satisfaction ● Postpurchase Cognitive Dissonance ● Customer Loyalty/Disloyalty -Let’s take a closer look at these outcomes in the next slide
- 9. Post Purchase Outcomes -Customer Satisfaction answers the question: does the product or service meet the customers’ needs? -Marketers want happy and satisfied customers so they must be sure to have some of the following when selling product/service: ● Build realistic expectations ● Demonstrate correct use of product ● Stand behind their product/service and provide warranties and money-back guarantees ● Encourage feedback from customers who hopefully leave a positive review for future customers -Postpurchase Cognitive Dissonance: Internal conflict from an inconsistency between 2 beliefs or between beliefs & behavior -Customer questions their purchase after a decision has been made
- 10. Post Purchase Outcomes con’t -Customer Loyalty: Marketers want customers to be satisfied so they purchase from the same company and continue to do so over the course of their life -Customer Disloyalty AKA customers do not purchase from the company again -If a customer is dissatisfied, they will not repeat a purchase from a company and could speak negatively about the company and its product online or via word of mouth ● Marketers would like to try to avoid this as much as possible and will sometimes install listening software & respond to negative word of mouth via customer service reps that will handle complaints
- 11. Consumer Decision Process Example -Now that we know the steps, let’s go through them with the example of purchasing dinner -Need Recognition: I need to eat dinner and want to eat pizza -Information Search: I want a pizza but: ● Do I make it from scratch at home? ● Go out to eat it? Which restaurant? ● Get it delivered? Delivered from where? ● Go to store to purchase? -I have no ingredients to make a pizza at home nor do I want to go eat in a restaurant -Which narrows the choices to getting a pizza delivered or going to the store to buy a pizza…
- 12. Consumer Decision Process Example con’t -I am lazy and do not want to go to to the store so I decide on getting a pizza delivered and must now answer the question of where to order from? -After a quick Google search I discover different places and offerings (Alternate Evaluations): ● Papa John’s - has a special of stuffed crust pizza for $13 ● Donatos- No specials offered ● Domino’s- has a deal of 2 medium pizzas, bread bites, cinnamon twists & a 2 liter of coke for $19.99 ● Pizza Hut- has a special of a large pizza for $10 Purchase & Consumption: After taking into consideration all of my options, I decide to order from Domino’s because of the amount of food I am getting, its value and I am easily able to track my order online
- 13. Consumer Decision Process Example con’t Post Purchase: My order is delivered in a timely manner and my food is all made correctly and it’s hot, ready to eat! -I am so satisfied with my order that I decide to partake in the customer survey that Domino’s sends to my email asking about my experience with them -And I keep Domino’s in mind next time I want to order a pizza -If I was at all unsatisfied with my order, Domino’s has a Delivery Insurance Program where if something is wrong, you fill out a claim and Domino’s will make it right