STAGES OF CONSUMER DECISION PROCESS

Need Recognition – Consumer realizes a significant gap between his present state and some desired state. Needs maybe simple or Complex.

Simple need recognition is referred to as a problem that occurs frequently or periodically and can be solved through known ways. Eg. Housewives depend on nearby Kiranas for their grocery needs.
Complex need recognition is referred to as a problem which is faced infrequently by a consumer and evolves overtime. Eg. Purchase of consumer durables.
Marketers attempt to create Primary and Secondary demands. In primary demand, marketers encourage consumers to use particular good, service or retail setup regardless of the brand they choose.
Secondary demand refers to the situation where consumers are stimulated to prefer a specific retail outlet to others, can occur only if primary demand already exists.

Information Search – Prospective buyers examine their environment for appropriate information to make a sound decision. Through information, the individual evolves various possible alternatives that are likely to solve his problem. The individual derives information from internal and external sources. The customer invests time in information search.
Evaluation of Alternatives – Using the information and knowledge gathered, the individual then evaluates various alternatives evolved at the information stage. It is important for the marketers to ensure that their brand or shop finds a place in the alternative set of the consumer. Retailers need to improve or revise their marketing strategies so that they get into the alternative of consumers.
Purchase Decision – After evaluation of alternatives, the final choice from these multiple alternatives leads to the purchase decision. This involves the exchange of cash or credit note for the ownership of the offering. It is the purchase stage which generates revenue to retailers and marketers in the value chain. Customer considers Factors such as Physical Characteristics (Location, size, appearance, store layout), Social interaction (between salespeople and customers), Assurance (Warranty, returns, complaint handling), Policy (Payment options, operating hours, parking ), Merchandise (Product category, brand, quality, style). Particular product is purchased if the above parameters of customers are met.

Post-Purchase Dissonance - After purchasing a particular good or service, customers evaluate its performance against their expected level of satisfaction on account of important attributes. This leads to the following possible outcomes:

Actual performance meets expectations, leading to a neutral response. Individual may likely to evaluate it further.
Performance exceeds expectation, resulting in satisfaction thereby repeated purchase and positive word-of-mouth publicity.
Performance may fall short of expectations, resulting in dissatisfaction, thereby discontinuation of purchase of product and store or bad word of mouth.

Inorder to improve their satisfaction, the customers are requested to fill up feedback forms, and take their suggestions.

TYPES OF CONSUMER DECISION MAKING

Basis : Nature of decision making

Routine buy – Those transactions where the buyer reorders from a regular store without any modifications and on a routine basis.
Modified Rebuy – Those transactions where buyers want to modify product specifications, price terms or suppliers. It usually involves more time and information.
New Product Purchase – Those transactions where a buyer purchases a product or considers visiting a particular retail outlet for the first time and therefore requires an extensive amount of information to be obtained and evaluated. This is largely true for infrequent purchases.

On the basis of effort required for purchase or the level of involvement, The four levels of consumer decision making are:

Extensive decision making / Complex high-involvement – this kind of decision making usually happens for unfamiliar, expensive and / or infrequently bought products. These transactions involve high degree of economic / performance / psychological risk. Eg. Purchase decision for Cars, computers. The information one uses for this purchase is mass media, friends, relatives etc.
Limited decision making – happens when an individual purchases product occasionally and is required to look for a different brand or retailer for a product one is used to because of non-performance or non-availability.
Routine response / Programmed behaviour – is observed in case of low involvement, frequently purchased and generally low cost products. They require very little search and decision efforts and are purchased almost automatically. Eg. Grocery items.
Impulse Buying – those purchases that do not involve any conscious planning.

A particular product doesn’t always remain confined to one category. A product can shift from one category to another.