Nature of the Consumer Decision Making Essay

Introduction Now more than ever in such a highly competitive business world were each product and service offered is competing with similar and alternative products, it is crucial from the businesses point of view that their product or service is of the highest standard possible. Correctly marketed a product could be infinitely successful, whilst on the other hand a poorly marketed product could be the death of it. From a marketers perspective it is them making the product what it is, from deciding consumer’s wants and needs, to interpreting these in an end product that satisfies these needs. In order for this to happen marketers must take into account the vast amount of cognitive processes the consumer goes through before, during and after making a purchase. This report provides a view into the consumer’s decision making process, looking more depth into the role motivation plays in these decisions and the various theoretical model frameworks that are used in this process. The repor t will also outline how a marketer can use this knowledge to assist consumers in their purchasing choices and decisions throughout the report when applicable. The consumer decision making process Four views of consumer decision making The consumer decision making process is one that the consumer makes when making a purchase. There are different models that have been produced in time to support this idea, with four generalist views of consumer decision making, each highlighting different variables. These are the ‘Economic view’ which focuses on the idea that the consumer makes decisions based on rational behaviour, i.e. cost verse benefits, will I get a good enough product service for my money?. Another view that marketers hold is the ‘passive view’ in which opposes the economic view by believing consumers to be submissive to all marketers input, stating that consumers are impulsive buyers, easily manipulated with marketing efforts. Thirdly is the ‘Emotional view’ which may be seen as irrational behaviour based on feelings rather than any logical reasoning, i.e. decisions based on love, hope, sexuality etc. Fourth and probably the most prolific one would be the ‘5 stage (cognitive process)’. The 5 stage process outlines the cognitive procedure consumers go through when making decisions. Marketers will often refer to  this model when considering how to effectively influence the consumer’s choices. It shows that more consideration goes into the decision making process than just a purchase decision and even continues post-purchase. Although the consumer does not always necessarily follow each stage, sometimes they may skip stages when making more impulsive decisions or routine purchases. For example when considering this model it would be naà ¯ve to think the consumer will put the same amount of thought into buying a pack of chewing gum at a newsagent to buying a new car. The purchase of chewing gum is generally an impulsive decision that does not require much previous thought, whereas the purchase of a car is less routine and requires a lot of thought into varying factors such as cost verses benefits. (Consumer Decision Making Process, 2008) Schiffman and Kanuk describe the process as being viewed in 3 distinct but interlocking stages, the input stage, process stage and output stage. Below is an extended model of this process, which includes external influences and psychological factors. Figure 1 External Influences Before the consumer even has the thought of making a purchase, they are already influenced by two sources subconsciously, the first being the firms marketing efforts (the four P’s) which creates an awareness for the product via marketers attempts to inform and persuade the consumer through products, promotion, price and channels of distribution . Secondly, sociological influences reveal an underlying fundamental need to fit in to certain social groups, lifestyles, cultures etc. that are not directly commercially related i.e. A neighbour or friend owning a product that an individual likes, therefore perhaps creating a want for it. Consumer decision making model The decision making model as shown in figure 1 could reflect not only the cognitive view to decision making, but also the emotional view as it incorporates various socio-cultural input (as previously mentioned) that could be described as emotional based, and also psychological processes(discussed later)involved when actually making the decision. Looking at figure 1 the first stage of the decision process is the ‘need  recognition’, this is where the consumer realises a need for something. This could come from perhaps running out of something and needing more, or receiving information on a product from an external source that leads them to want it. This would logically then lead the consumer to the second part of the process ‘the pre-purchase search’, this is the point where the consumer begins to process the thought of what product may satisfy their need, they may base their ideas on previous experience and memories (psychological factors), or may opt to s earch for useful information to help in their decision (basic internet search). At this point the consumer is drawing up information from external sources and at the same time has psychological factors influencing their decision. i.e.Consumer’smotivation, perception, learning, personality and attitudes. Solomon (2006) addresses the fact to how much actual searching takes place, stating that younger, better educated people will spend more time searching/fact finding before making a decision in comparison to an older person, who has less available channels to search. He also says that women are more inclined to research products. A generalisation that is worth keeping in mind from a marketer’s perspective as based on this theory it would be logical to focus marketing efforts at these for a more effective result. For example it would not be cost-efficient for a business to waste money trying to advertise a product to a social group that tends to have limited internet access, i.e. older people. The third stage of the process ‘the evaluation of alternatives’ is probably the longest part of the decision making process in terms of time as the consumer has multiple factors to consider. At this point the consumer, given previous knowledge built up in the previous stage, now has to filter from the potentially hundreds of available possibilities. Perhaps using basic cost v benefits and perceived risk of alternatives, or even more complicated cognitive processes requiring more effort. The considered sets of choices are known as the ‘evoked set’ The fourth stage enters the output area of the decision making process, this is where the consumer has made a decision and makes the purchase from the set of possibilities acknowledged in the ‘evoked set’, this would be classed as a ‘trial purchase’ as the consumer has not previously tested the product. The other type of purchase would be the ‘repeat purchase’ in which the consumer skips steps of the process because they already have a want for the product due to already  using it and needing more (brand loyalty). Once purchased the next and final stage of the process would be ‘the post purchase evaluation’, consumers now evaluate their purchase decision, deciding whether they are totally happy with the product, or perhaps would have preferred one of the alternatives. At this point it is vital for the marketers to make sure the consumers feels they made the right decision in choosing their product, as next time they will take their business elsewhere. Psychological factors The psychological factors in the human psyche that influence the input stage of the model are key tools that a marketer can use to utilise their relationship with the consumer. A good understanding of each can help the marketer focus efforts based around the consumer’s way of thinking. Consumer Personality – this is what separates humans and reflects individual differences, personality is always consistent and enduring. Sigmund Freud famously split the complex subject into three interacting parts, ID, Superego and Ego. The ID being your basic needs (hunger, thirst and sex). Superego being the way the people act out their primitive needs in a socially acceptable manner (restraining impulsive ID feelings). Lastly the Ego is the consumer’s conscious ability to control the demands and constraints of the previous two. Freud believed that an individual’s successfulness in tackling each stage will in turn reflect personality. For example a person can be fixated in later life through a dissatisfaction of needs in development stages in early life. i.e. if a child does not feel loved when developing it could leave them striving to feel it in later life, or perhaps opposing this lead them to not seek love due to not experiencing it (a defining characteristic in any personality). From a marketers opinion a person could be easily manipulated in later life due to decisions they have made in earlier stages. Consumer Perception – â€Å"†¦the active psychological process in which stimuli are selected and organised into meaningful patterns†, (Buchanan, 1991). Perception is how humans interpret information they make pick up through sensations like sight, taste, hearing, smell and touch, and then respond to accordingly to create a perception. For example from the marketer’s perspective, it is crucial that the perception of their product or service to the consumer is good i.e. effective stimul i,  as if the consumer gains a bad perception of a good they will not wish to purchase. Marketers can seek to improve brand perception through trials i.e. if consumer enjoys the product they will re-purchase based on previous experience. This would be one example of assisting a consumer in a purchase. Consumer Learning – refers to a human’s capacity to pick up knowledge, through information or experience on a product, directly or indirectly i.e. a consumer does not have to have tried a product to have a perceived familiarity with it, they may know somebody who has a familiarity and has told them about it, given them enough of an understanding to either like or dislike it. The general idea that when a product is completely unknown to the consumer that the quality of it is reflected in price. Consumer Attitudes – An attitude in marketing terms is defined as a general evaluation of a product or service formed over time (Solomon, 2008). An attitude satisfies a personal motive—and at the same time, affects the shopping and buying habits of consumers. Dr. Lars Perner (2010) (Understanding Consumer Attitudes, 2010). For the marketers it is up to them to understand why certain attitudes exist and either work with them or seek to change them. Consumer Motivation – defined by Schiffman and Kanuk (2010) as being ‘the driving force within individuals that impels them to action’. It could be referred to as the processes that cause people to behave as they do, from a psychological need to how they seek to satisfy it. Marketers can use identified motives to develop a better marketing mix giving them a better targeted marketing strategy. The role of motivation Maslow’s Hierarchy of Needs Dr Abraham Maslow formulated this hierarchy of needs as a theory behind how human motivation works, a theory now widely accepted. Similarly to Freudian beliefs (the ID) that basic physiological needs have to be fulfilled in order to reach higher satisfaction. i.e. food, water, air, shelter and sex. Generally these needs are satisfied by the majority (unless homeless, then these would be entire needs). Once satisfied the next stage would lead to safety needs not only physical safety but also safety in terms of finance, stability, education etc. Once an individual believes the previous needs are  met they then consider social needs. These needs include love, affection and acceptance, all of which are socially desired by everyone as we are motivated to find good relationships. Once these needs are generally met, the ego needs of human nature come into play. The ego needs can be of two types, inward directed i.e. self-esteem, success, personal satisfaction, or outwardly directed ego ne eds such as prestige, status and reputation. The ultimate need is for humans to reach self-fulfilment, to become the best of their potential (according to Maslow this need is rarely satisfied because generally ego needs are not fully satisfied) Alderfer (1972) describes there being two types of needs, a basic need (innate), innate needs being the basic level of needs relating to survival i.e. hunger, thirst and sex, and also Acquired needs which are picked up in life as a response to the environment and cultures. A theory echoed by Freud and also Maslow. Although Alderfer revised the latter stages of Maslow’s hierarchy of needs by realising some of the middle stages overlap, confusion of these needs could lead a marketer to appeal to the wrong type of consumer. So Alderfer changed Maslow’s five stage process into a more simple three stage one, which is similar in the fact it represents levels of needs (pyramid). Although Alderfer’s model states that humans may be motivated by more than one need and non-reliant of satisfaction of each need for progression i.e. an artist who may place growth needs above existence. An article by Mark Rodgers called ‘Challenging Maslow’ refers to the period of time in which Maslow has created this theory on motivation, stating that given the time in which it was created would not depict modern views to human motivation. Rodgers believes that Maslow produced his theory in a time when his home country had just emerged from a world war and out of the greatest depression of the 20th century, needs at this time would be lower as in physiological and safety. Whereas nowadays with more than 50 years of economic growth, the average person enjoys a more stable lifestyle and allows them to have higher focused needs such as egoistic and self-actualization. (Rodgers, 2004) How marketers can apply understanding of these processes and motivation to assist consumers in purchasing decisions Developing on what has been previously touched upon it would be a fair  judgement to say that marketers have the ability to manipulate consumers entirely. Once they have understood consumers’ needs and wants they can use them again when producing a marketing plan to reposition a product or perhaps launch another. Using theories such as Maslow’s, marketers can advertise to specific motivational needs, using powerful marketing tools such as advertising. Advertisements are cues used to arouse needs, marketers therefore creates ads to aid consumer choices. Advertising techniques can attract attention by appealing to needs (innate) or perhaps having such an image to create a new need or desire (acquired). They can advertise a product to directly stimulate levels of motivation i.e. Maslow’s self-fulfilment or Freud’s super ego through making a product seem visually emphasised as a certain amount of perfection which would satisfy top level needs. Physiological arousal can be used to stimulate consumers most basic needs, for example a visually ‘sexy’ advertisement would attract the attention of most adults, or perhaps an advertisement of a new burger at a fast food chain would focus to basic biogenic hunger needs. Cleverly marketed an advert can appeal to multiple needs, making a product seem vital for a consumer to own as it is seen as satisfying many needs, creating a strong chance of consumers purchasing this product. Looking into an emotional arousal view of marketing it can be seen that a lot of charity based organisations use emotional advertising to trigger a sad response from the audience. For example an advert seeking to create an awareness and revenue for starving children of third world countries would seek to discomfort the viewer by highlighting their struggle to find satisfaction of their biological needs and contrast this with our perhaps unnecessary ego and self-fulfilment needs. This in turn triggers an emotional response, and perhaps self-disappointment which would lead the individual to donate sympathetically. Conclusion To conclude, there has been a build-up of various consumer decision based theory and framework in this report that helps give an understanding to how the processes work, leading into motivation and various theory and models behind them. The theory can be applied directly when producing a marketing mix or segmenting the market, as it offers a clear insight into how the  human mind operates when considering purchase decisions. Another key aspect of marketing, by gaining an understanding of the consumers wants and needs before creating a product and marketing campaign that could ultimately fail and cause substantial losses financially. Marketers nowadays have to be at the top of their game due to flooded markets with similar products they have to be able to communicate the benefits of their product to the consumer and how it may differentiate from competitors. Marketers have the ability to create a want for a product that would not previously have been desired and therefore have the ability to manipulate people’s needs throughout their lifetimes through this incredibly strong tool and the added benefit of ease of distribution channels of information through advancements in modern day technology.