14 consumer behaviour and decision process

Peach and Development Research Journal, 5(5), 3841, June, 2013

IT Association of Nepal Page 7

Consumer Behaviour and Decision Process

Sajeeb Kumar Shrestha Ph.D. Scholar, M.Phil., M.B.S.

Teaching Assistant, Shanker Dev Campus Tribhuvan University

1. Introduction

Consumer is the study of the processes involved when individuals or groups select,

purchase, use, or dispose of products, services, ideas, or experiences to satisfy needs and

desires (Solomon 1995). In the marketing context, the term ‘consumer ’ refers not only to the

act of purchase itself, but also to patterns of aggregate buying which include pre-purchase

and post-purchase activities. Pre-purchase activity might consist of the growing awareness of

a need or want, and a search for and evaluation of information about the products and brands

that might satisfy it. Post-purchase activities include the evaluation of the purchased item in

use and the reduction of any anxiety which accompanies the purchase of expensive and

infrequently-bought items. Each of these has implications for purchase and repurchase and

they are amenable in differing degrees to marketer influence (Foxall, 1987).

Engel et al. (1986) define consumer behaviour as “those acts of individuals directly

involved in obtaining, using, and disposing of economic goods and services, including the

decision processes that precede and determine these acts”. Simple observation provides

limited insight into the complex nature of consumer choice and researchers have increasingly

sought the more sophisticated concepts and methods of investigation provided by behavioural

sciences in order to understand, predict, and possibly control consumer behaviour more

effectively. Psychology, social psychology, and sociology are the disciplines most widely

The success of the firm will be determined by how effective it has been in meeting

the diverse consumer needs and wants by treating each customer as unique and offering

products and services to suit his needs and creating a life time value and relationship with him

(Nair, 2007). Marketers have come to realize their effectiveness in meeting consumer needs

directly influences their profitability (Assael, 1998).

2. Consumer Decision Making Process

Consumers decisions are concerned mainly with how, when, how much, from where,

questions concerned with the purchase of a products/services/ideas. Kotler (2004) explains

that there are five stages of consumers buying behaviour. This can be seen in the diagram

below.



Need Recognition: this is when the consumers defined their problem or need. A need

could arise either as a result of internal or external stimulus. Example of an internal stimulus

is when you need to eat something as a result of hunger. External stimulus arises from

commercial on television after which the consumer thinks that the brand/product is needed.

Therefore it is of importance that marketers find out what stimulus attracts interest in their

brand.

This occurs when a consumer notice that a need has become dissatisfied. Problem can

arise either through need recognition or opportunity recognition; when a person is for

example running out of something needed or a need is dissatisfied, the consumers actual

state moves downward, however when a consumer sees the possible opportunity to purchase

something new or better the ideal state moves upward. Marketers use either primary

demand, which encourages a consumer to buy any brand, or secondary demand where

consumers are to purchase a specific brand. Companies try to differentiate their products and

services over competitors (Solomon, 1995).

At this stage, choice models determine whether there is any need to buy a particular

category or not. Consumer recognizes a problem that stimulates him to by a product. Because

of budget constraints, he will buy after comparing utility of buying with utility of not buying.

Determinants of utility of buying a car will be saving of time, comfort, status etc. Ching

(2002) proposed price consideration model that examined the consumer's decision of

choosing a particular category for every week. After choosing the category, consumers

decided what to buy.

Information search: This is the process when a consumer starts to look information about

the product or service. This is when consumers start to search for information through

commercial source, personal source, public source, and experiential source. This information

enhances the consumer’s knowledge and awareness of the available brand.

In order to make a wise choice, information search is necessary (Guo, 2001). How

much consumers know about the product or service when they decide to make a purchase and

how they obtain this information are important issues. This can be identified as the pre-

purchase search since the consumers has already identified to problem which is tries to

resolve. The consumers’ on-going search helps marketers to capture their attention.

Consumers are exposed to advertising incidentally or deliberately, depending on the

motivation to search information (Solomon, 1995).



Punj and Staelin (1983) examined negative relationship between cost of search and

amount of external search. Beatty and Smith (1987) analysed various sources of information

like retailer search, media search, interpersonal search and neutral sources (consumer reports

and publications) and concluded that purchase involvement, attitude towards shopping and

time availability had a positive effect on information search behaviour of consumer whereas

product class knowledge reduced the likeliness for information search. Dowling and Staelin

(1994) found that increased perceived risk with the product induces more search for

information. Iglesias and Guillen (2002) used multiple regression analysis and found that

prior knowledge and sales variation where positively related to information search of the

consumers.

Alternative evaluation: this is the stage whereby the consumers evaluate and rank

alternative brand based on the information they have. Such information can be price or quality

etc. Consumers must choose which product or service they decide to purchase. The evaluation

of alternatives is processed through identifying the evoked set which are products our

memory has registered, inept set which are the alternatives consumer are aware of but for

some reason do not consider buying which can be characterized as inert set; product that are

not considered to be purchased at all (Solomon, 1995).

Consumers have to consider and evaluate which satisfies their need the best. The

market beliefs of consumers are that they might get better value for their money from certain

shops or brands. Choosing the product requires usually evaluating the alternatives, however

this can be influenced by previous shopping experiences, beliefs of the product that

advertisers have put forth and information given about it. People tend to think that higher

price means better value and quality (Solomon, 1995).

Purchase decision: this is when consumers purchase the product. Consumer’s perception of

a brand can be influenced by unforeseen situational factors and attitude of others. Factors

such as mood, behavioural and perceptual affect consumer state of mind the volume of

buying. The shopping experience influences on consumer satisfaction and how we use the

product. A satisfied client is more likely to purchase again (Solomon, 1995).

Post-purchase decision: this is when the consumers compare their expectation and

perceived performance. Kotler (2008) stated that they get satisfied when their expectations are

the same with the product performance. Consumer decision process also involves post

purchase assessment. It can be defined as the consumer’s perceptions of the outcome of the

purchase process. The result of the purchasing can be either satisfaction (when the purchases



do not conform to the buyer’s expectations) or dissatisfaction (when the purchases do not

conform to the buyer's expectation). The consumer will store the information and experiences

obtained by him with the purchase and try to recall the information with entering into another

purchase. This consumer decision making is a continual process as, the end of one purchase

decision is the beginning of another.

Conclusion:

It can be seen that consumers passes through five stages in their buying process.

Kotler (2008) opines consumers do not pass through all the stages in their everyday purchase.

Marketers have come to realize their effectiveness in meeting consumer needs directly

influences their profitability the better they understand the factors underlying consumer

behavior, the better able they are to develop effective marketing strategies to meet consumer

needs (Assael, 1998).

References

Assael, H. (1998). Consumer behavior and marketing action (6th ed.). Cincinnati, OH: South Western College Publishing.

Beatty, S.E., & Smith, S.M. (1987). External search effort: an investigation across several product categories. Journal of Consumer Research, 14(1), 83-95.

Ching, A. (2002). Consumer learning and heterogeneity: Dynamics of demand for prescription drugs after patent expiration. Working paper, Ohio State University, Columbus.

Dowlings, G.R., & Staelin, R. (1994). A model of perceived risk and intended risk-handling activity. Journal of Consumer Research, 21(6), 119-134.

Engel, J.F., Blackwell, R.D., & Miniard, P.W. (1986). Consumer behaviour (5th ed.). Dryden Press.

Foxall, G.R. (1987). Consumer behaviour. In Baker, M.J. (1987). The marketing book. Heinemann Professional Publishing.

Iglesias, M.P., & Guillen, M.Y. (2002). Searching for information when selecting a restaurant. Food Service Technology, 2, 35-45.

Kotler, P. (2008). Marketing management. Prentice Hall of India. Nair, S.R. (2007). Consumer behaviour: Text and cases (1st ed.). New Delhi: Himalaya

Publishing House. Punj, G.N., & Staelin, R. (1983). A model of consumer information search behavior for new

automobiles. Journal of Consumer Research, 9(3), 366-380. Solomon, M.R. (1995). Consumer behaviour (3rd ed.). Prentice Hall.

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14 consumer behaviour and decision process