What you need to know about the consumer decision making process
When you are in business management
You spend a lot of time thinking about consumers. Their buying habits are not always consistent and not all consumers are the same. They all have their own way of and reasons for making their purchases.
To be successful in the marketing and retail businesses you need to predict those decisions and adapt your strategies to match up with them. That is why most business managers rely on the consumer decision making process.
This process brings consumer thinking and decision making down to its simplest levels. It helps a business marketer track the process of a consumer’s purchase decision from the beginning to the end.
After much thought, the developers of the consumer decision making process were able to design 5 stages to help them successfully do their tracking. The information gathered by this process helps marketers create their market strategies and their advertising methods.
In simple words, the process is a good business tool to make business more profitable.
The difference between a customer and a consumer
The process described above focuses on the end consumer. They are the most important part of the whole marketing strategy. Who is the person making the decision to buy or have someone buy that particular product.
Some businesses have become very sophisticated in their analysis of the consumer. They have found a difference between the customer and the consumer. In the businessman’s minds, they are not always the same people.
- Who is the customer- it is the person who is spending their own money for the product or service. This person can be both the consumer and customer or just the customer
- Who is the consumer- this is the person who actually uses the product or service. This person can be both consumer and customer or they can just be the consumer
Who is the end consumer
The term end consumer has been coined by businessmen and used throughout the business world. The have come up with three definitions to describe who the end consumer is:
- They are the vital cog in the business’ success
- They are the last users of any product sold on the market today
- They may or may not use the product themselves
Understanding consumer behavior
To be successful in business one has to understand who their customers and consumers are. These definitions help businessmen get a grasp of who is purchasing their products. Yet, that is not all there is to understanding consumer behavior.
Consumer behavior is a psychological process a person goes through when they identify their needs and seek ways to fill that need. To understand why people make the decisions they do key questions are asked:
- What factors influenced those decisions?
- Why that particular product? (Could be a computer, bike or whatever)
- Was the price or the quality the final factor in making a decision?
- Did family or friends influence the decision?
- Was it advertising that convinced a person to buy a certain product? If so, which advertising method was it? (Social media, print ads, television ads, etc.)
Consumer spending habits change as their life situations change. They spend more when they have more money and spend less when they do not. Also, political influences like a recession play a role in the consumer’s decision-making process.
Everything about the consumer is in a state of flux because life situations can change rapidly and without notice. These and other key questions help the marketers keep up with the ever-changing minds of fickle consumers and customers.
The 5 stages of the consumer decision making process
In order to develop successful ad campaigns or business marketing strategies, the businessman first need to understand the consumer. This is not an easy task to accomplish as each consumer is different from the other.
That is why certain businessmen developed the 5 stages of the consumer decision making process. These stages help them categorize different consumers and track their purchases. This process made their work a little easier.
- Need recognition– this is the initial stage of the overall process. A customer sees that they are missing something important from their lives and a need develops. This need can surface in any number of ways, including a targeted business ad. Businesses are good at using external influences to create a need in the consumer. The external influence can also come from family or friends who tell the consumer about the good experience they had with product or a movie, and so on. Another way a consumer recognizes a need is when they run out of a product that they use. This can be laundry soap, coffee filters and more.
- Information search– once the need has been recognized the consumer then starts looking for information to see if they can find a good product to fill that vacancy. Memory or experience can and is part of this search. If one has had a good experience with a product then they use that information to direct their purchase decision. Or if they are not familiar with a product, they begin doing an external information search through a variety of methods. This can involve friends, family, teachers, or the internet. They may even look to the Better Business Bureau or the yellow Pages. The search style and method depend on the need that needs to be filled
- Evaluation of alternatives– This is the question and answer stage that a consumer may go through several times as they evaluate their options and the choices that are available. They may question the quality of the previous product and seek to find alternatives that were better made and had better construction materials. For example, sneakers. They type of questions a consumer may ask are: did the previous pair hold up? Were they comfortable? Did they provide great support? Did the soles provide great traction? Depending on their answers to their own questions, the consumer may buy a similar pair or opt for one of the alternatives. When they have answered their questions, then the search for the best deal begins. Price does play a role in consumer behavior. They may also be looking for factory outlets that give them both a price break as well as good quality. At this time, they may read reviews on different websites.
- Purchasing- This is the stage of action. The consumer has completed the first three stages and have made their decision to buy a particular product at a certain store. They have gathered all the facts, thought through their need, and checked to see if the purchase will fit their budget or not. Of course, not everyone sticks to their budget. Also, this decision may be influenced by several other factors. Their emotional attachment to a certain brand or product style. Advertising may play a role in convincing the consumer to buy an alternative product. Or past experience and a god sale on a product may be the clincher that motivates the consumer to purchase the same product they already used. Where the product is marketed can also influence this decision. The consumer may like buying sneakers at a sports shop instead of a regular shoe store
- Post purchase satisfaction or dissatisfaction- This is more of a review stage. The consumer may question their purchase to see if they bought the right product or not. They analyze the performance of that product to see if it met expectations or not. If he product performed up to expectations or surpassed them, then the consumer may promote the product to his or her friends or relatives. If the product didn’t, then he or she may complain or say negative things about the product to the same people. The positive review may boost the sales of the product. The contrary is true as well. If the review is negative, then the complaint may slow or halt sales of that particular product. It all depends on the experience the consumer had with the product.
We should mention that some businesses and organizations may add to the 5 stages listed above. These stages are not set in stone and some use a 7-stage process to track consumer decision making.
Others use a 3-stage process instead. There are consumers who are very loyal to a product and do not need all 5 stages to make their decision. They purchase their favorite product over and over.
Which business model you use to track consumer decision making depends on you and the different strategies your business or organization employs.
The weaknesses of the consumer decision making process
Not everything system is going to be foolproof. As we said consumers can be fickle. There are many factors not covered in the 5 stages listed above that can play their part in moving the consumer to a certain purchase decision.
Here are a few of those weaknesses:
- Having too much information– the consumer can be overwhelmed by the amount of information at their disposal. The consumer can be overwhelmed, confused or misguided when there is too much information to go through
- Having too little information– without enough information to base their decision on, the consumer may be influenced by personal bias, inaccurate experiences, or the fact that a lemon got through quality control
- Bad identification of a need– simple needs can be identified quite easily. But difficult needs may be misidentified, and the consumer is sent off in the wrong direction
- Results may not match with expectations– the consumer may have been overconfident in the process and find that the results are not as good as they expected.
- Gender differences– men and women do not think the same. They also have different criteria for every product a large part of the time. Plus, they may have different ideas about the performance of a product
- Regional issues– where the consumer lives may play a role in the products a consumer buys. A consumer living in a colder region would need thicker and warmer clothes than those living in a warmer climate. Or one product like hard water softeners won’t work in soft water regions. These factors all play a role in the decision-making process.
These are but a few of the weaknesses that play a role in the consumers decision to purchase certain products over others. Personal preference, fads, and other hard to track influences, like delays in purchasing for whatever reason that may occur, weaken the 5 stages listed above.
Some strengths to the consumer decision making process
When the consumer is not part of a group, they can make their own decisions about which products they will purchase. This demonstrates some of the strengths that come with the 5 stages of the consumer decision making process:
- Faster decisions can be made– this means the product will leave the shelves quicker
- Wrong decisions can be corrected easier– when realizing their error, the individual can make another decision faster and correct their mistake
- There are benefits– this involves the saving of time, money and effort. Individuals making faster decisions means less time and effort is involved. They can also find cheaper deals quicker
- Decisions are more focused– as well as being more rational. Only the individual’s emotions are involved
Some final thoughts
Even though the system may not be perfect, it is a good tool to have to guide one’s business marketing decisions. The consumer decision making process with its 5 stages still helps you track the purchase decisions made by different consumers.
This information can provide you with an edge over your competitors. Or it may keep you at same level with those you compete against for the consumer’s dollar. Using the right marketing tools can also save you a lot of time, money and effort when you construct your marketing strategies.
The consumer decision making process is a good tool to make sure you have your finger on the pulse of the consumer and the purchasing decisions they make.