The Consumer Buying Decision Process
This article is the second in a series of articles about the [You must be registered and logged in to see this link.] that influence the behavior of consumers.
The purchase is only the visible part of a more complex decision process created by the consumer for each buying decision he makes. But what happens before and after this purchase? What are the factors influencing the choice of product purchased by the consumer?
Today, let’s focus on the Consumer Buying Decision Process and the stages that lead a shopper to purchase a new product.
Engel, Blackwell and Kollat have developed in 1968 a model of consumer buying decision process in five steps: Problem/need recognition, information search, evaluation of alternatives to meet this need, purchase decision and post-purchase behavior.
I. Need recognition / Problem recognition :
The need recognition is the first and most important step in the buying process. If there is no need, there is no purchase. This recognition happens when there is a lag between the consumer’s actual situation and the ideal and desired one.
However, not all the needs end up as a buying behavior. It requires that the lag between the two situations is quite important. But the “way” (product price, ease of acquisition, etc.) to obtain this ideal situation has to be perceived as “acceptable” by the consumer based on the level of importance he attributes to the need.
For example, you have a pool and you would like someone to take care of regularly cleaning it instead of you (ideal situation) because it annoys you to do it yourself (actual situation). But you don’t judge the “way” to reach this ideal situation (pay $250 / month for a specialized company) as “acceptable” because its price to obtain it seems too high. Especially compared to the relatively low level of importance you attach to it. So you won’t have a purchase behavior in this situation.
On the other hand, the ability to be able to go to your work by car in 20 minutes every morning (ideal situation) rather than lose three hours in transit because you do not have a car and you live in the countryside (actual situation) is something that means a lot to you. So you will have a buying behavior to purchase a car. Even if the price is important.
In addition to a need resulting from a new element, the gap between the actual situation and the ideal situation may be due to three cases. The current situation has not changed, but the ideal situation has (a neighbor told you about the possibility – that you did not know – to clean the pool by a specialized company). Or, the ideal situation is still the same but it’s the actual situation has changed (you’re tired of cleaning your pool by yourself). Or finally, the two situations have changed.
The recognition of a need by a consumer can be caused in different ways. Different classifications are used:
- Internal stimuli (physiological need felt by the individual as hunger or thirst) which opposes the external stimuli such as exposure to an advertisement, the sight of a pretty dress in a shop window or the mouth-watering smell of a french “pain au chocolat” when passing by a bakery.
- Classification by type of needs:
- Functional need: the need is related to a feature or specific functions of the product or happens to be the answer to a functional problem. Like a computer with a more powerful video card to be able to play the latest video games or a washing machine that responds to the need to have clean clothes while avoiding having to do it by hand or go to the laundromat.
- Social need: the need comes from a desire for integration and belongingness in the social environment or for social recognition. Like buying a new fashionable bag to look good at school or choose a luxury car to “show” that you are successful in life.
- Need for change: the need has its origin in a desire from the consumer to change. This may result in the purchase of a new coat or new furniture to change the decoration of your apartment.
- The [You must be registered and logged in to see this link.]: Developed by the eponymous psychologist, this is one the best known and widely used classifications and representations for hierarchy of needs. It specifies that an individual is “guided” by certain needs that he wants to achieve before seeking to focus on the following ones:
- 1. Physiological needs
- 2. Safety needs
- 3. Need of love and belonging
- 4. Need of esteem (for oneself and from the others)
- 5. Need of self-actualization
II. Information search
Once the need is identified, it’s time for the consumer to seek information about possible solutions to the problem. He will search more or less information depending on the complexity of the choices to be made but also his level of involvement. (Buying pasta requires little information and involves fewer consumers than buying a car.)
Then the consumer will seek to make his opinion to guide his choice and his [You must be registered and logged in to see this link.] with:
- Internal information: this information is already present in the consumer’s memory. It comes from previous experiences he had with a product or brand and the opinion he may have of the brand.
Internal information is sufficient for the purchasing of everyday products that the consumer knows – including Fast-Moving Consumer Goods (FMCG) or Consumer Packaged Goods (CPG). But when it comes to a major purchase with a level of uncertainty or stronger involvement and the consumer does not have enough information, he must turns to another source:
- External information: This is information on a product or brand received from and obtained by friends or family, by reviews from other consumers or from the press. Not to mention, of course, official business sources such as an advertising or a seller’s speech.
During his decision-making process and his Consumer Buying Decision Process, the consumer will pay more attention to his internal information and the information from friends, family or other consumers. It will be judged more “objective” than these from an advertising, a seller’s speech or a commercial brochure of the product.
III. Alternative evaluation
Once the information collected, the consumer will be able to evaluate the different alternatives that offer to him, evaluate the most suitable to his needs and choose the one he think it’s best for him.
In order to do so, he will evaluate their attributes on two aspects. The objective characteristics (such as the features and functionality of the product) but also subjective (perception and perceived value of the brand by the consumer or its reputation).
Each consumer does not attribute the same importance to each attribute for his decision and his Consumer Buying Decision Process. And it varies from one shopper to another. Mr. Smith may prefer a product for the reputation of the brand X rather than a little more powerful but less known product. While Mrs. Johnson has a very bad perception of that same brand.
The consumer will then use the information previously collected and his perception or image of a brand to establish a set of evaluation criteria, desirable or wanted features, classify the different products available and evaluate which alternative has the most chance to satisfy him.
The process will then lead to what is called “evoked set”. “The evoked set” (aka “consideration set”) is the set of brands or products with a probability of being purchased by the consumer (because he has a good image of it or the information collected is positive).
On the other hand, “inept set” is the set of brands or products that have no chance of being purchased by the shopper (because he has a negative perception or has had a negative buying experience with the product in the past). While “inert set” is the set of brands or products for which the consumer has no specific opinion.
The higher the level of involvement of the consumer and the importance of the purchase are stronger, the higher the number of solutions the consumer will consider will be important. On the opposite, the number of considered solutions will be much smaller for an everyday product or a regular purchase.
IV. Purchase decision
Now that the consumer has evaluated the different solutions and products available for respond to his need, he will be able to choose the product or brand that seems most appropriate to his needs. Then proceed to the actual purchase itself.
His decision will depend on the information and the selection made in the previous step based on the perceived value, product’s features and capabilities that are important to him.
But his Consumer Buying Decision Process and his decision process may also depend or be affected by such things as the quality of his shopping experience or of the store (or online shopping website), the availability of a promotion, a return policy or good terms and conditions for the sale.
For example, a consumer committed to the idea of buying a stereo of a well-known brand could change his decision if he has an unpleasant experience with sellers in the store. While a promotion in a supermarket for a yogurt brand could tip the scale for this brand in the consumer’s mind who was hesitating between three brands of his “evoked set”.
V. Post-purchase behavior
Once the product is purchased and used, the consumer will evaluate the adequacy with his original needs (those who caused the buying behavior). And whether he has made the right choice in buying this product or not. He will feel either a sense of satisfaction for the product (and the choice). Or, on the contrary, a disappointment if the product has fallen far short of expectations.
An opinion that will influence his future decisions and buying behavior. If the product has brought satisfaction to the consumer, he will then minimize stages of information search and alternative evaluation for his next purchases in order to buy the same brand. Which will produce customer loyalty.
On the other hand, if the experience with the product was average or disappointing, the consumer is going to repeat the 5 stages of the Consumer Buying Decision Process during his next purchase but by excluding the brand from his “evoked set”.
The post-purchase evaluation may have important consequences for a brand. A satisfied customer is very likely to become a loyal and regular customer. Especially for everyday purchases with low level of involvement – such as Fast-Moving Consumer Goods (FMCG) or Consumer Packaged Goods (CPG). A loyalty which is a major source of revenue for the brand when you combine all purchases made by customer throughout his entire life (called “lifetime customer value”). The “Holy Grail” that all brands in the industry are trying to achieve.
Positive or negative, consumers will also be able to share their opinion on the brand. Whether in their family or by word-of-mouth. Or on a much broader scale now with social networks or on consumer product review websites. A tendency not to be overlooked because now with the Internet, an unhappy customer can have a strong power to harm for a brand.
That’s why that’s important for companies to have awareness of that matter. In addition to optimizing the customer experience, a guarantee (for example, for a washing machine), an efficient customer service and a specific call center are some of the assets that can be developed to improve post-purchase behavior if there is any trouble with the product.
An example of Consumer Buying Decision Process
Nothing like a real example to better understand the five stages of the Consumer Buying Decision Process. Maybe this situation sounds familiar to you.
Stage 1 – Need recognition: It’s sunday night. You’re hungry (internal physiological stimuli) and there is nothing in the fridge. You will order food (statement of need).
Stage 2 – Information search: You already have ordered to the Indian restaurant in your street last month (internal information). A friend recommended a pizzeria in your neighbourhood (external information from environment). And this morning you’ve found a flyer for a sushi restaurant in your mailbox (external information from advertising).
Stage 3 – Alternative evaluation: You have a bad opinion of the Indian restaurant since you’ve been sick the last time (inept set). The pizzeria is both recommended by your friend and also happens to be a well-known brand (positive perception – evoked set). As for the sushi restaurant, it got good reviews on Tripadvisor (positive perception – evoked set).
Stage 4 – Purchase decision: After evaluating the possibilities, you’ve decided to choose the well-known pizza delivery chain. In addition, a new episode of your favorite TV show is broadcasted tonight on TV.
Stage 5 – Post-purchase behavior: The pizza was good (positive review). But you know there was too many calories and you regret a little bit (mixed feelings about yourself). The next time you will choose the sushi restaurant. There is less fat in sushi than pizza (next purchase behavior)!
Understand the Consumer Buying Decision Process in order to adapt your marketing strategy
By improving their knowledge of the Consumer Buying Decision Process, brands can improve their marketing strategy to effectively respond and be present with their customers at each stage of their buying behavior. And thus raise and create a need, strengthen their relationship with their customers and grow their sales.
It always starts with a recognition of a need!
The start of the buying behavior of the consumer is the need recognition. If there is no need, there is no purchase! That’s why generate or reinforce a need in consumers’ mind to trigger the buying behavior has a fundamental importance for brands.
Steve Jobs had become a master in the area with Apple thanks to remarquable marketing campaigns by successfully creating a need for millions of consumers for products they had never thought before before. But have finally become an important part of their daily lives.
In a different field, TV infomercials are remarquable examples of how to create an unexpected need in a consumer’s mind for a new product. You probably never felt any difficulty to cook a salad, but while watching the introduction of this [You must be registered and logged in to see this link.], you finally realize the difficulty of the task and the importance of this new product as a solution to this problem.
Brands must focus on the activation or recall of a need – whether physiological, functional, social or change-related – for the consumer through their advertising campaigns. An even stronger challenge for new products, those with new features or those on new segments that consumers ignore the need or interest.
Brand awareness for everyday purchases is crucial
For everyday purchases with low level of involvement, consumers will consider only a limited number of brands when making their choice. Those that come in head first or they know at least by name. This is called “Top-of-mind awareness (TOPA)”.
For brands of the Fast-Moving Consumer Goods (FMCG) or Consumer Packaged Goods (CPG) industry, branding and brand awareness can therefore be a real factor of influence of the consumer buying decision process. Especially for products with a low level of differentiation.
Provide concrete information for the alternative evaluation
During the “alternative evaluation” stage of the Consumer Buying Decision Process, consumers are looking for solid, reliable and tangible information that will allow them to make their choice. Especially for purchasing and products with high level of involvement.
The brand’s interest is to provide concrete information and proof of the product features, its added value compared to its competitors and how it will respond to their need in order to provide consumers with the information they need and positive influence in their decision making process.
Improve the shopping experience and customer relationships
As we saw in previous section, the stage of post-purchase behavior can have important consequences for a brand. Positively or negatively.
To avoid reputation damage and to develop a lasting relationship with its customers, the brand’s interest is to multiply actions for optimizing the shopping experience in-store as well as the product experience. But also provide great customer service in case of dissatisfaction or issue with the product.