The Importance of the Consumer Decision-Making Process
Javier Ramirez
Liberty University
BUSI 520: Strategic Marketing Management
Muriel Wilson
January 11, 2022
The Importance of the Consumer Decision-Making Process
believe that not enough businesses understand how important the consumer
decision-making process is for their business. If your business is not gaining enough sales
you might want to keep reading along to see why.
Consumers have three different types of decision making: Habitual (low purchase
involvement), Limited (medium purchase involvement) and Extended (high purchase
involvement). The type of decision and how much involvement the consumer has in the
purchase strongly relates to the price of the good and/ or service being sold. The more
expensive a product is, the more involvement the consumer has in the purchase.
Value and benefits are a major part of winning a customer over your competitors.
You see, consumers stop searching for information about a product when the benefits
match with the expected costs of the product. If they think it costs more than what they
will benefit from they’ll continue searching.
Consumers also make their decision based on perceived risks. These are six risks
consumers unconsciously take into account:
1. Functional risk: will the product not work as well as expected?
2. Physical risk: is the product safe?
3. Financial risk: is the product worth its cost?
4. Social risk: possible social embarrassment?
5. Psychological risk: is this product going to impact self-esteem?
6. Time risk: is the time spent product searching going to be wasted?
However, consumers handle these risks through seeking: information, brand loyalty,
brand image, store image, most expensive product, and reassurance.
For example, a recent purchase I made was an Apple iPhone XS. When I purchased
this phone I unconsciously took into account many factors. It was a limited decision made,
with value at the centre of my decision as the product was going to be used quite a lot
everyday. I’ve been greatly loyal to Apple being an evoked set of all brands in the mobile
phone industry, and with much experience with using their products I didn’t have to worry
about any of the risks listed above. So far it has been great phone and has provided great
value and benefit in relation to the price.
Next time you go to purchase a product take into consideration what type of
decision it is, what values and benefits does it provide, and what risks did you take into
account.
5 Important Stages of Consumer Decision Making Process
Importance of understanding the consumer decision making process
Understanding the consumer decision-making process is important for marketers
because it helps them understand what motivates consumers to buy a product or service.
When a marketer begins developing a marketing strategy, they need to consider how their
target audience will decide which products and services are best for them. The most
effective marketing strategies often include understanding how customers make decisions
about what they want to purchase.
For example, if your company wants to sell flowers, you might start by studying your
potential customer’s purchasing habits before coming up with an idea of what type of
flowers they like. Understanding their preferences can help you determine where your
company should focus its efforts on selling the flowers that would be most profitable for
you.
What are the 5 stages of the consumer decision making process?
Need Recognition
The need recognition stage is the first step in the decision making process. This
phase of the decision making process starts with individuals trying to identify their needs
and then searching for information that will help them satisfy those needs. At this point,
consumers are not yet aware of what they want or don’t want, but they are very interested
in knowing more about what they might need. At this point of problem recognition,
consumers are also not sure if their needs are already met by existing brands or other
products available on the market.
In this stage, consumers evaluate their personal values and desires to identify a
need. The products that are offered will influence what they want from their purchase. If
they see a product that aligns with their values, then they will have a higher chance of
buying it. If there is no alignment between the consumer’s personal values and desires, then
they will look for another option that does have an alignment between them so they can
fulfill their needs more effectively.
Information Search
The information-gathering phase involves the individual gathering information about
a product, evaluating it, and deciding whether or not to purchase it. Information-gathering
is made up of three main steps: searching for relevant product information, gathering
opinions from other people on what they think about the product, and researching more
general topics related to the item being purchased.
Some of the sources for information search:
1. Television and Radio: There are many types of television and radio channels
that provide information about different products, services, and companies.
2. News: News provides important updates on what is happening in the world
today as well as reporting on consumer news such as trends, fads, events, disasters, etc.
3. Social Media: Internet social media platforms like Facebook and Twitter can
be used to find out about trending topics or ask for opinions from friends and family
members on various products or services that you may be considering purchasing or using
for your business.
4. Advertisement: Advertisements are everywhere in the media. Adverts can be
found on many different mediums, but frequently commercials will show up in your
television shows and movies.
5. Word of mouth: Information is also gathered from what people say and do in
their own personal lives. This is arguably the most effective way for someone to find out
about a product without having to pay money for any type of advertising, but it can be very
threatening to companies that sell such products.
Evaluation of Alternatives
The evaluation of alternatives stage is when consumers have a number of options to
choose from and they are weighing the costs and benefits. This is typically the most
important stage in the decision making process because it’s where people make their final
decisions about what they want to buy. A consumer may begin by researching what
products are available in a particular category, such as cars, laptops, mattresses, etc. They
will then choose a particular product from their research and compare it with other options
that may be available in that category.
During the purchase evaluation stage, consumers use different criteria to evaluate
each alternative before choosing which one will be best for them. Some of these criteria
might include:
1. Price: Consumers will compare products and services that have the same
features but with different prices, such as a $500 laptop versus a $1000 laptop or two
laptops priced at $100.
2. Reliability: Consumers may also compare products and services with differing
reliability like a Windows computer versus an Apple Mac OS X computer or two computers
of different brands, such as Dell and Hewlett Packard (HP). They might be willing to pay
more for a premium brand because they have a good reputation for being more reliable.
3. Warranty: Consumers may also compare products based on their warranty
value as well as the service level that will be offered with each product.
They might choose based on price, features, warranties, or even brand reputation.
This stage ends when consumers have found an option that they feel best fits their needs
and meets their criteria for purchase.
Purchase Decision
This stage starts with the consideration of whether or not to purchase a product and
ends when they have decided to purchase the best option. Buying decision begins when a
consumer has gathered enough information about a product or service to make a
purchasing decision. Both internal stimuli and external stimuli from the previous stages of
the buying decision processes will influence the consumer journey through the decision-
making funnel. The purchase decision typically occurs in-store or online at that point in time
after having completed some form of price comparison research (e.g., researching prices on
Amazon).
During this stage, consumers may be undecided about which product or service they
want to buy, but are already leaning towards one option over another because they have
done preliminary research into its price and quality attributes (e.g., researching reviews on
Amazon). This can be an effective marketing strategy for any business as it helps them
understand what customers are looking for and how they might want to improve their
products or services so that they become more appealing to customers.
Post-purchase behavior
After the purchase decision is made, consumers move on to post-purchase
evaluation. This is where they follow through with their purchase by using the product or
service and testing it out. It refers to a set of behaviors that consumers engage in after they
have made a purchase, whether it is buying something online or offline. Some examples of
post-purchase behaviors are:
1. Checking out their receipt and reviewing what they just bought to see if it
was worth the money spent.
2. Searching for ways to use what they just purchased as opposed to just storing
it away.
3. Going back online or offline to buy more products from that company.
Post-purchase dissonance happens when a customer feels that they have been
misled or fooled into buying something that was not what they were expecting. A purchase
decision process can be good if it includes a clear message and a proper website where
customers can read about products and services offered by your company before making
the purchase.
As a marketer, one of the most important steps to take is ensuring that your
customer’s post-purchase experience is as smooth and enjoyable as possible. To do this, it is
important to create a positive relationship with your customers so they will feel comfortable
making a purchase from you again in the future. Here are some tips on how to reduce post-
purchase dissonance:
1. Take time to thank them for their business after the sale. Make sure you
provide them with all of the information that they need to know about their order including
shipping details and contact information.
2. Give your customers an incentive or discount code if they’ve made multiple
purchases from you in the past few months or even years. This will make them feel like
valued members of your community who are deserving of special treatment!
3. Send out personalized emails with different content for each individual
customer, depending on what type of product they purchased and what problems it solved
for them (e.g., “Hey Lisa! I’m excited that you’re now able to enjoy our new t-shirt
collection!”). This creates an exclusive feeling within your email marketing campaign that
will keep customers coming back for more.
4. Another way is to provide a clear return policy or guarantees on your
products so that customers know what they are getting into before they buy them.
5. Finally, you should have customer support representatives who are
knowledgeable about the product and can answer any questions that customers may have
about it.
