(2965) MAR3023 CH6 The Consumer Decision Process

Consumer Decision-Making Process

  • The Consumer Decision-Making Process is a series of steps that individuals go through when deciding to purchase products, whether simple, like food, or complex, like a car.

Steps in the Decision-Making Process

  1. Need Recognition

    • The first step involves recognizing a need, such as hunger or the necessity for transportation.

    • Example: Feeling hungry leads to a decision to buy donuts from Dunkin' Donuts or a need for a new car after an accident.

  2. Information Search

    • After recognizing a need, consumers will search for information to satisfy that need.

    • Types of searches:

      • Internal Search: Relying on prior knowledge or experience (e.g., recalling favorite restaurants).

      • External Search: Seeking information from external sources when internal knowledge is insufficient (e.g., researching cars online).

  3. Evaluating Alternatives

    • Consumers develop a set of alternatives to consider before making a purchase.

    • Universal Set: Includes all possible options.

    • Retrieval Set: Options that come to mind when making a decision.

    • Evoked Set: The choices that are acceptable and where the purchase is likely to happen.

  4. Purchase Decision

    • Consumers convert their decision to buy into an actual purchase.

    • Factors that influence purchase decisions include perceived risks (performance, safety, financial risks) and personal preferences.

  5. Post-Purchase Evaluation

    • After the purchase, consumers evaluate their satisfaction with the product.

    • This includes assessing if their expectations were met, dealing with buyer's remorse, and potential post-purchase cognitive dissonance.

Need vs. Want

  • Functional Needs: Basic requirements such as transportation (e.g., a car needing to provide mobility).

  • Psychological Wants: Desires based on personal preference and aspirations (e.g., preferring a luxury car over a basic one).

Cognitive Misers

  • Consumers tend to be cognitive misers, meaning they prefer to use minimal thinking when making decisions, relying on familiar information and choices, especially for simple purchases.

Factors Influencing Consumer Decision-Making

  • Locus of Control: Refers to who or what influences the decision-making process.

    • Internal Locus of Control: Decisions influenced by personal choice and research (e.g., a person independently researching their next car).

    • External Locus of Control: Decisions influenced by external factors or commands (e.g., parents deciding on a college).

  • Perceived Risk: The anxiety a consumer feels about the potential loss with a purchase.

    • High perceived risk can extend the information search time significantly.

Evaluative Criteria

  • As consumers evaluate alternatives, they consider various criteria such as:

    • Price: Signals quality and can significantly influence decisions.

    • Determinant Attributes: Must-have features essential for the decision (e.g., air conditioning and safety features in cars).

Communication Strategies for Consumer Satisfaction

  • Companies must foster post-purchase satisfaction through customer service, follow-ups, and managing customer expectations.

    • Example: Sending reminders or follow-ups after a purchase can enhance customer satisfaction.

Service Recovery

  • After a failure or dissatisfaction, companies should have strategies in place for service recovery to regain customer trust.

    • Proper training on how to handle customer complaints and follow-up is crucial to preventing negative word-of-mouth.