The Buying Decision Process- Five Stage Model

The consumer decision-making process follows the stages shown in Figure. Problem recognition - Problem recognition arises when the consumer realizes that there is a need for some item. This can come about through assortment depletion (where the consumers stock of goods has been used up or worn out) or assortment extension (which is where the consumer feels the need to add some new item to the assortment of possessions). At this point the consumer has only decided to seek a solution to a problem, perhaps by buying a category of product. The needs felt can be categorized as either utilitarian (concerned with the functional attributes of the product) or hedonic (concerned with the pleasurable or aesthetic aspects of the product). The current view is that there is a balance between the two types of need in most decisions. An internal stimulus, or drive, comes about because there is a gap between the actual and desired states. Drives are generated by encouraging a revision of the desired state. The higher the drive level (i.e. the greater the gap between actual and desired states), the more open the individual is to considering new ways of satisfying the need: in simple terms, a starving man will try almost any kind of food. It is, of course, stimulating and enjoyable to allow gaps to develop between the desired and actual states. Each individual has an optimal stimulation level (OSL), which is the point at which the drive is enjoyable and challenging, without being uncomfortable. OSL is subjective: research shows that those with high OSLs like novelty and risk-taking, whereas those with low OSLs prefer the tried and tested. Those with high OSLs also tend to be younger. Drives lead on to motivation, which is the reason why people take action. The level of motivation will depend on the desirability of the end goal, and the ease of achieving the end goal; motivations are subjective, so it is difficult to infer motivation from behavior. Information search - Having become motivated to seek a solution to the need problem, consumers engage in two forms of information search.

The internal search involves remembering previous experiences of the product category, and thinking about what he/she has heard about the product category. The external search involves shopping around, reading manufacturers literature and advertisements, and perhaps talking to friends about the proposed purchase.

The purpose of this exercise is to reduce risk; buying the wrong brand of biscuits involves very little risk, since the financial commitment is low, but buying the wrong hi-fi could prove to be an expensive mistake. Evaluation of alternatives - Having found out about several competing brands, the consumer will evaluate the alternatives, based on the information collected or remembered. In the first instance, the consumer will select a consideration set, which is the group of products that would most closely meet the need. Typically a consumer will use cut-offs to establish a consideration set: these are the minimum and maximum acceptable values for the product characteristics. Signals are important when making choices; a particular price-tag, a brand name, even the retailer will have some effect on the consumers perception of the product. Price is frequently used as an indicator of quality, for example, but this can be reduced in the presence of other signals.

Occasionally the use of cut-offs eliminates all the possibilities from the consideration set, in which case the consumer will have to revise the rules. This can result in the creation of a hierarchy of rules. For marketers, the challenge is often to ensure that the product becomes a member of the consideration set. The decision-making process appears lengthy and complex as stated here, yet most of us make several purchasing decisions in a day without going through a lengthy decisionmaking process. This is because most of us use heuristics, or decision-making rules, for most purchases. These are simple if . . . then rules that reduce risk by using previous experience as a guide. Heuristics divide into three categories:

* Search heuristics, which are concerned with rules for finding out information; * Evaluation heuristics, which are about judging product offerings; and * Choice heuristics, which are about evaluation of alternatives.

The decision-making process may contain a number of interrupts points at which the search is temporarily suspended. Interrupts come in four categories:

* Environmental stimuli, which include in-store promotions (perhaps eye-catching posters for other products); * Affective states, which include physiological needs (the sudden need to go to the toilet, or to have a coffee); * Unexpected information, for example a change of layout in the shop or some change in the product attributes; and * Conflicts, which occur when the consumer realizes that the original decision making plan cannot be followed, or an alternative plan appears that is not consistent with the original plan.

For example, an approachapproach conflict occurs when a second product is presented that would probably do the job just as well. This means that the consumer has to make a comparison, and the search pattern is temporarily suspended. An approachavoidance conflict might arise when the consumer finds out the product is much more expensive than expected; an avoidanceavoidance conflict might arise when the two alternatives are equally distasteful. The effect of the interrupt will depend on the consumers interpretation of the event. Sometimes the interrupt activates a new end goal, or perhaps a new choice heuristic might be activated. Sometimes the interrupt is serious enough for the search to be abandoned altogether; here the strength of the interrupt is important. Clearly a sudden desire for a cup of tea will not permanently interrupt a search process, but the news that one has lost ones job very well might.

In most cases, consumers will resume the interrupted problem-solving process once the stimulus has been absorbed and accepted or rejected.

Purchase - The actual purchase comes next; the consumer will locate the required brand, and perhaps choose a retailer he or she has faith in, and will also select an appropriate payment method.

Post-purchase evaluation - Post-purchase evaluation refers to the way the consumer decides whether the product purchase has been a success or not. This process usually involves a comparison between what the consumer was expecting to get, and what was actually purchased, although sometimes new information obtained after the purchase will also color the consumers thinking. Before the purchase, the consumer will have formed expectations of the products capabilities in terms of

* Equitable performance (what can be reasonably expected given the cost and effort of obtaining the product); * Ideal performance (what the consumer hopes the product will do); and * Expected performance (which is what the product probably will do).

Sometimes this evaluation leads to post-purchase dissonance, when the product has not lived up to expectations, and sometimes to post-purchase consonance when the product is as expected or better. In either event, the consumer will feed back this information into memory, to inform the internal search for next time. One of the more interesting aspects of dissonance is that there is evidence to show that a small discrepancy between expectation and outcome may provoke a bigger change in attitude than a large discrepancy. This is because a small discrepancy may force the consumer to confront the purchase behaviour without offering a ready explanation for it.

Consumers will usually act to reduce post-purchase dissonance. There are four general approaches to doing this:

Ignore the dissonant information and concentrate on the positive aspects of the product. Distort the dissonant information (perhaps by telling oneself that the product was, after all, the cheap version). Play down the importance of the issue. Change ones behavior.

From a marketing viewpoint, it is generally better to ensure that the consumer has accurate information about the product beforehand so as to avoid post-purchase Consumers express dissatisfaction in one of three ways:

Voice responses, in which the customer comes back and complains; Private responses, in which the consumer complains to friends; and Third-party responses, which may include complaints to consumer organizations, trade associations and TV consumer programmes, or even legal action.

The most effective way of reducing post-purchase dissonance is to provide a product that meets the customers expectations. This is partly a function for the manufacturer, but is also a problem for the retailer to address since it should be possible to ensure that the consumers needs are fully understood before a recommendation about a product is made. As a fall-back position, though, every effort should be made to encourage the consumer to complain if things do not come up to expectations. This is why waiters always ask if the meal is all right, and why shops frequently have no-quibble money-back guarantees. Ferry companies and airlines provide customer comment slips, and some marketers even make follow-up telephone calls to consumers to check that the product is meeting expectations.