Understanding the Consumer Decision Making Process
From a business perspective, the consumer decision making process can be broken down into five basic steps. Economist John Dewey developed the theory in 1910 and it has become a staple marketing theory ever since. This theory involves identifying a need, researching available products, evaluating alternatives on the market, the purchase decision and then a post-purchase evaluation. Although sharing these similar steps, it is important to remember that no two consumers are the same and they may even move differently across the decision-making process. Are there social factors influencing the purchase? Are economic factors going to affect which product them deem to be best suited to them?
For the purpose of this post, let’s pretend our consumer is looking for a new a car while we explore the decision-making process.
1. Problem Recognition
This is the stage where a consumer identifies a need for a specific product or service. Is it a change in circumstance that has sparked the need for a new car? Is it a replacement or an upgrade that is needed? Or could it simply be a want?
For our example, our consumer has recently discovered that they are expecting their first child and wants to get a safer car that would provide more protection for their family out on today’s busier roads. This external stimulus is an example of a need fuelled by a change of circumstance.
2. Information Search
This is the stage where the consumer decides to act on this newly identified need and actively begins researching products on the market. They may conduct internet searches, use comparison and review sites or even ask other people about their own experiences and opinions. The consumer starts weighing up whether this purchase is going to be worth it.
Our example consumer might search for “safest cars”, “best cars for families” or “cars with high safety rating”.
What brands need to do here is provide sufficient information on their product to ensure that the consumer is well informed on what they are offering. Brands also need to ensure that they are fully aware of the competitive landscape and understand the reasons why someone wants to buy their product. This will help form effective marketing strategies and placement of products on websites and adverts.
3. Evaluation of Alternatives
This stage involves the consumer comparing products to similar ones on the market to ensure that they are making the best purchase for them. It is key to remember that each consumer’s perception of what is best for them differs greatly.
Whilst the primary goal of our example consumer is to find a safer car, other factors such as price, brand image and fuel efficiency may also come into play at this stage. Each consumer may rank these criteria completely differently too. Where one may be looking for a safe, efficient car and not worry about the price, another consumer may be looking for safe, affordable without the worry of brand image.
For brands, understanding how to leverage these factors and focus on your selling point is key. For example, if your car is built with a USP of enhanced safety, then being able to communicate this to the customer is vital to ensure that other factors do not stand in the way of their primary goal.
To do this, a car brand needs to know what makes their car the safest. Have they have it tested and certified by relevant accreditors? Is this marketed effectively? How does this compare to their competitors’ products? For this specific example, appearing in car comparison magazines or blogs could be a key to success.
4. Purchase Decision
At this stage, the consumer has decided on the product they want to purchase. After the evaluation of alternatives stage, consumers will tend to choose the product that exceeded their evaluation criteria.
Sometimes, this can result in two or more very similar products claiming top place. To combat this, car brands for example could offer and extensively market their after-sales care, warranties and customer experience when delivering the car to stand out against their competitors. Could the brand add a discount or throw in some free extras?
5. Post-purchase Evaluation
This is the crucial stage where you want to customer to feel like they have made the right decision in purchasing your product. Consumers may question if the product meets their expectations, if they are getting good value for money or if the product matches their expectation on quality. For our example, they may ask themselves if they feel safe enough to drive their family around in the car.
At this stage, consumer may start to leave reviews on brands’ websites and spread positive or negative word-of-mouth. This is the step where the consumer may become loyal and want to return to the brand in the future. So ensuring that the brand knowns and understands the dynamics of the market and the demographics of the consumer is key.
The key message here is to make sure you understand the market you operate in and your consumer. Conduct thorough market research, put yourself in your target consumer’s shoes and develop the product that meets and exceeds their expectations.