introduction to Consumer Decision

Making Usually the decisions consumers are face are somewhat like the ones mentioned below:

What to buy? How much to buy? Where to buy? When to buy? How to buy?

Deciding what to buy is the most basic tasks. No buying activity may take place unless this fundamental decision is made. Here consumers' product or service decision may encompass Generic category of products (Electronic Equipment)Specific category of products (Computer)Brands Prices and Product features Specific Decision Consumer must decide, e.g. how much rice to purchase, how much oil, how many cans of cold drinks? etc...Two products although physically same are likely to be perceived differently because of other facets associated. Not all sales outlets are same, they may differ:

Downtown or suburban stores Discount or full service stores Merchandise lines (full VS. Narrow Purchase a camera from a brand shops or a super store)Consumers decide not only on the general type of store but also determine a particular store The decision is influenced by such factors as:

Urgency of need (medicine)Availability of the chosen item (cars)Store opening times (appliances before evening, clothes till late night)Period of sales and clearances Availability of transportation (Public transport or personal vehicle)Freedom of all family members to shop Other concerns are to shop extensively or shop from the first outlet, pay cash or charge, have it delivered or take it home.

Product, Placement, Promotion, and Price

Product, placement, promotion and price are the four elements of the marketing mix.

Product:

The term "product" is defined as anything, either tangible or intangible, offered by the firm; as a solution to the needs and wants of the consumer; something that is profitable or potentially profitable; and a goods or service that meets the requirements of the various governing offices or society. The two most common ways that products can differentiated are:

Consumer goods versus industrial goods, and

Goods products (i.e. durables and non-durables) versus service products

Intangible products are service-based, such as the tourism industry, the hotel industry, and the financial industry. Tangible products are those that have an independent physical existence. Typical examples of mass-produced, tangible objects are automobiles and the disposable razor. A less obvious but ubiquitous mass produced service is a computer operating system.

Every product is subject to a life-cycle that starts with its introduction and is followed by a growth phase, a maturity phase, and finally a period of decline as sales falls. Marketers must do careful research on the length of the product's life-cycle and focus their attention on different challenges that arise as the product moves through each stage.

The 4Ps in action

Coca Cola's marketing strategy includes elements of all 4P.

The marketer must also consider the product mix, which includes factors such as product depth and breadth. Product depth refers to the number of sub-categories of products a company offers under its broad spectrum category. For example, Ford Motor Company's product category is automobiles. It's product depth includes sub-categories such as passenger vehicles, commercial vehicles, transport vehicles, et cetera. This broad spectrum category is also known as a product line. Product breadth, on the other hand, refers to the number of product lines a company offers.

Marketers should consider how to position the product, how to exploit the brand, how to exploit the company's resources, and how to configure the product mix so that each product complements the other. Failure to do so can result in brand dilution, which is a situation in which a product loses its branded identity, resulting in decreased sales and perceived quality. The marketer must also consider product development strategies.

Placement

Product distribution (or placement) is the process of making a product or service accessible for use or consumption by a consumer or business user, using direct means, or using indirect means with intermediaries.

Distribution Types:

Intensive distribution means the producer's products are stocked in the majority of outlets. This strategy is common for basic supplies, snack foods, magazines and soft drink beverages.

Selective distribution means that the producer relies on a few intermediaries to carry their product. This strategy is commonly observed for more specialized goods that are carried through specialist dealers, for example, brands of craft tools, or large appliances.

Exclusive distribution means that the producer selects only very few intermediaries. Exclusive distribution is often characterized by exclusive dealing where the re-seller carries only that producer's products to the exclusion of all others. This strategy is typical of luxury goods retailers such as Gucci.

The decision regarding how to distribute a product has, as its foundation, basic economic concepts, such as utility. Utility represents the advantage or fulfillment a customer receives from consuming a good or service. Understanding the utility a consumer expects to receive from a product being offered can lead marketers to the correct distribution strategy.

Promotion:

The three basic objectives of promotion are :

To present product information to targeted consumers and business customers.

To increase demand among the target market.

To differentiate a product and create a brand identity.

A marketer may use advertising, public relations, personal selling, direct marketing, and sales promotion to achieve these objectives. A promotional mix specifies how much attention to give each of the five subcategories, and how much money to budget for each. A promotional plan can have a wide range of objectives, including: sales increases, new product acceptance, creation of brand equity, positioning, competitive retaliations, or creation of a corporate image.

Price:

The price is the amount a customer pays for the product. The concept of price is in contrast to the concept of value, which is the perceived utility a customer will receive from a product. Adjusting the price has a profound impact on the marketing strategy, and depending on the price elasticity of the product, often it

will affect the demand and sales as well. The marketer should set a price that complements the other elements of the marketing mix. A well chosen price should (a) ensure survival (b) increase profit (c) generate sales (d) gain market share, and (e) establish an appropriate image.

From the marketer's point of view, an efficient price is a price that is very close to the maximum that customers are prepared to pay. In economic terms, it is a price that shifts most of the consumer surplus to the producer. A good pricing strategy would be the one which could balance between the price floor and the price ceiling and take into account the customer's perceived value. Common pricing strategies include cost-plus pricing, skimming, penetration pricing, value-based pricing, and many more.

The factors influencing consumer behavior

There are 4 main types of factors influencing consumer behavior

There are 4 main types of factors influencing consumer behavior: cultural factors, social factors, personal factors and psychological factors.

I. Cultural factors:

Cultural factors are coming from the different components related to culture or cultural environment from which the consumer belongs.

Culture and societal environment:

Culture is crucial when it comes to understanding the needs and behaviors of an individual.

Throughout his existence, an individual will be influenced by his family, his friends, his cultural environment or society that will “teach” him values, preferences as well as common behaviors to their own culture.

For a brand, it is important to understand and take into account the cultural factors inherent to each market or to each situation in order to adapt its product

and its marketing strategy. As these will play a role in the perception, habits, behavior or expectations of consumers.

For example, in the West, it is common to invite colleagues or friends at home for a drink or dinner. In Japan, on the contrary, invite someone home does not usually fit into the local customs. It is preferable to do that this kind of outing with friends or colleagues in restaurant.

A significant specificity to take into account for the brands in markets such as savory snacking or sodas and alcoholic beverages. Usage and consumption moments are not the same in all regions of the world.

While if a Japanese offer you a gift, the courtesy is to offer him an equivalent gift in return.

McDonald’s is a brilliant example of adaptation to the specificities of each culture and each market. Well aware of the importance to have an offer with specific products to meet the needs and tastes of consumers from different cultures, the fast-food giant has for example: a McBaguette in France (with french baguette and Dijon mustard), a Chicken Maharaja Mac and a Masala Grill Chicken in India (with Indian spices) as well as a Mega Teriyaki Burger (with teriyaki sauce) or Gurakoro (with macaroni gratin and croquettes) in Japan.

While all the ingredients used by McDonald’s in arabic and muslim countries are certified halal. The fast food chain not offering, of course, any product with bacon or pork.

Sub-cultures :

A society is composed of several sub-cultures in which people can identify. Subcultures are groups of people who share the same values based on a common experience or a similar lifestyle in general.

Subcultures are the nationalities, religions, ethnic groups, age groups, gender of the individual, etc.

The subcultures are often considered by the brands for the segmentation of a market in order to adapt a product or a communication strategy to the values or the specific needs of this segment.

For example in recent years, the segment of “ethnic” cosmetics has greatly expanded. These are products more suited to non-Caucasian populations and to types of skin pigmentation for african, arab or indian populations for example.

It’s a real brand positioning with a well-defined target in a sector that only offered makeup products to a caucasian target until now (with the exception of niche brands) and was then receiving critics from consumers of different origin.

Brands often communicate in different ways, sometimes even create specific products (sometimes without significant intrinsic difference) for the same type of product in order to specifically target an age group, a gender or a specific sub-culture.

Consumers are usually more receptive to products and marketing strategies that specifically target them.

Social classes:

Social classes are defined as groups more or less homogenous and ranked against each other according to a form of social hierarchy. Even if it’s very large groups, we usually find similar values, lifestyles, interests and behaviors in individuals belonging to the same social class.

We often assume three general categories among social classes : lower class, middle class and upper class.

People from different social classes tend to have different desires and consumption patterns. Disparities resulting from the difference in their purchasing power, but not only. According to some researchers, behavior and buying habits would also be a way of identification and belonging to its social class.

Beyond a common foundation to the whole population and taking into account that many counterexample naturally exist, they usually do not always buy the same products, do not choose the same kind of vacation, do not always watch the same TV shows, do not always read the same magazines, do not have the same hobbies and do not always go in the same types of retailers and stores.

For example, consumers from the middle class and upper class generally consume more balanced and healthy food products than those from the lower class.

They don’t go in the same stores either. If some retailers are, of course, patronized by everyone, some are more specifically targeted to upper classes such as The Fresh Market, Whole Foods Market, Barneys New York or Nordstrom. While others, such as discount supermarkets, attract more consumers from the lower class.

Some studies have also suggested that the social perception of a brand or a retailer is playing a role in the behavior and purchasing decisions of consumers.

In addition, the consumer buying behavior may also change according to social class. A consumer from the lower class will be more focused on price. While a shopper from the upper class will be more attracted to elements such as quality, innovation, features, or even the “social benefit” that he can obtain from the product.

Cultural trends:

Cultural trends or “Bandwagon effect” are defined as trends widely followed by people and which are amplified by their mere popularity and by conformity or compliance with social pressure. The more people follow a trend, the more others will want to follow it.

They affect behavior and shopping habits of consumers and may be related to the release of new products or become a source of innovation for brands.

By social pressure, desire to conformity or belonging to a group, desire to “follow fashion trends” or simply due to the high visibility provided by media, consumers will be influenced, consciously or unconsciously, by these trends.

For example, Facebook has become a cultural trend. The social network has widely grew to the point of becoming a must have, especially among young people.

It is the same with the growth of the tablet market. Tablets such as iPad or Galaxy Tab have become a global cultural trend leading many consumers to buy one. Even if they had never specially felt the need before.

For a brand, create a new cultural trend from scratch is not easy. Apple did it with the tablets with its iPad. But this is an exception. However, brands must remain attentive to the new trends and “bandwagon effects”. Whether to accompany it (create a page on Facebook) or to take part in the newly created market (create its own tablet).

II. Social factors:

Social factors are among the factors influencing consumer behavior significantly. They fall into three categories: reference groups, family and social roles and status.

Reference groups and membership groups :

The membership groups of an individual are social groups to which he belongs and which will influence him. The membership groups are usually related to its social origin, age, place of residence, work, hobbies, leisure, etc..

The influence level may vary depending on individuals and groups. But is generally observed common consumption trends among the members of a same group.

The understanding of the specific features (mindset, values, lifestyle, etc..) of each group allows brands to better target their advertising message.

More generally, reference groups are defined as those that provide to the individual some points of comparison more or less direct about his behavior, lifestyle, desires or consumer habits. They influence the image that the individual has of himself as well as his behavior. Whether it is a membership group or a non-membership group

Because the individual can also be influenced by a group to which he doesn’t belong yet but wishes to be part of. This is called an aspirational group. This group will have a direct influence on the consumer who, wishing to belong to this group and look like its members, will try to buy the same products.

For example, even if he doesn’t need it yet, a surfing beginner may want to buy “advanced” brands or products used by experienced surfers (aspirational group) in order to get closer to this group. While a teen may want the shoe model or smartphone used by the group of “popular guys” from his high school (aspirational group) in order to be accepted by this group.

Some brands have understood this very well and communicate, implicitly or not, on the “social benefit” provided by their products.

Within a reference group that influence the consumer buying behavior, several roles have been identified:

The initiator: the person who suggests buying a product or service

The influencer: the person whose point of view or advice will influence the buying decision. It may be a person outside the group (singer, athlete, actor, etc..) but on which group members rely on.

The decision-maker: the person who will choose which product to buy. In general, it’s the consumer but in some cases it may be another person. For example, the “leader” of a soccer supporters’ group (membership group) that will define, for the whole group, which supporter’s scarf buy and bear during the next game.

The buyer: the person who will buy the product. Generally, this will be the final consumer.

Many brands look to target opinion leaders (initiator or influencer) to spread the use and purchase of their product in a social group. Either through an internal person of the group when it comes to a small social group. Or through a sponsorship or a partnership with a reference leader (celebrity, actor, musician, athlete, etc..) for larger groups.

Family:

The family is maybe the most influencing factor for an individual. It forms an environment of socialization in which an individual will evolve, shape his personality, acquire values. But also develop attitudes and opinions on various subjects such as politics, society, social relations or himself and his desires.

But also on his consumer habits, his perception of brands and the products he buys.

We all kept, for many of us and for some products and brands, the same buying habits and consumption patterns that the ones we had known in our family.

Perceptions and family habits generally have a strong influence on the consumer buying behavior. People will tend to keep the same as those acquired with their families.

For example, if you have never drunk Coke during your childhood and your parents have described it as a product “full of sugar and not good for health”. There is far less chance that you are going to buy it when you will grow up that someone who drinks Coke since childhood.

For brands – especially for Fast-Moving Consumer Goods (FMCG) or Consumer Packaged Goods (CPG) – successfully “integrate” the family is both a real challenge and an opportunity to develop a strong consumer loyalty among all the family members. that’s why it’s important for brands to be seen as a family brand in order to become a consumer habit for parents and children when they will become adults.

Social roles and status:

The position of an individual within his family, his work, his country club, his group of friends, etc.. – All this can be defined in terms of role and social status.

A social role is a set of attitudes and activities that an individual is supposed to have and do according to his profession and his position at work, his position in the family, his gender, etc.. – and expectations of the people around him.

Social status meanwhile reflects the rank and the importance of this role in society or in social groups. Some are more valued than others.

The social role and status profoundly influences the consumer behavior and his purchasing decisions. Especially for all the “visible” products from other people.

For example, a consumer may buy a Ferrari or a Porsche for the quality of the car but also for the external signs of social success that this kind of cars represents. Moreover, it is likely that a CEO driving a small car like a Ford Fiesta or a Volkswagen Golf would be taken less seriously by its customers and business partners than if he is driving a german luxury car.

And this kind of behaviors and influences can be found at every level and for every role and social status.

Again, many brands have understood it by creating an image associated with their products reflecting an important social role or status.

III. Personal factors:

Decisions and buying behavior are obviously also influenced by the characteristics of each consumer.

Age and way of life:

A consumer does not buy the same products or services at 20 or 70 years. His lifestyle, values, environment, activities, hobbies and consumer habits evolve throughout his life.

For example, during his life, a consumer could change his diet from unhealthy products (fast food, ready meals, etc..) to a healthier diet, during mid-life with family before needing to follow a little later a low cholesterol diet to avoid health problems.

The factors influencing the buying decision process may also change. For example, the “social value” of a brand generally play a more important role in the decision for a consumer at 25 than at 65 years.

The family life cycle of the individual will also have an influence on his values, lifestyles and buying behavior depending whether he’s single, in a relationship, in a relationship with kids, etc.. As well as the region of the country and the kind of city where he lives (large city, small town, countryside, etc..).

For a brand or a retailer, it may be interesting to identify, understand, measure and analyze what are the criteria and personal factors that influence the shopping behavior of their customers in order to adapt.

For example, it is more than possible that consumers living in New York do not have the same behavior and purchasing habits than the ones in Nebraska. For a retailer, have a deep understanding and adapt to these differences will be a real asset to increase sales.

Purchasing power and revenue:

The purchasing power of an individual will have, of course, a decisive influence on his behavior and purchasing decisions based on his income and his capital.

This obviously affects what he can afford, his perspective on money and the level of importance of price in his purchasing decisions. But it also plays a role in the kind of retailers where he goes or the kind of brands he buys.

As for social status, some consumers may also look for the “social value” of products they buy in order to show “external indications” of their incomes and their level of purchasing power..

Lifestyle:

The lifestyle of an individual includes all of its activities, interests, values and opinions.

The lifestyle of a consumer will influence on his behavior and purchasing decisions. For example, a consumer with a healthy and balanced lifestyle will prefer to eat organic products and go to specific grocery stores, will do some jogging regularly (and therefore will buy shoes, clothes and specific products), etc..

Personality and self-concept:

Personality is the set of traits and specific characteristics of each individual. It is the product of the interaction of psychological and physiological characteristics of the individual and results in constant behaviors.

It materializes into some traits such as confidence, sociability, autonomy, charisma, ambition, openness to others, shyness, curiosity, adaptability, etc..

While the self-concept is the image that the individual has – or would like to have – of him and he conveys to his entourage. These two concepts greatly influence the individual in his choices and his way of being in everyday life. And therefore also his shopping behavior and purchasing habits as consumer.

In order to attract more customers, many brands are trying to develop an image and a personality that conveys the traits and values - real or desired – of consumers they are targeting.

For example, since its launch, Apple cultivates an image of innovation, creativity, boldness and singularity which is able to attract consumers who identify to these values and who feel valued – in their self-concept – by buying a product from Apple.

Because consumers do not just buy products based on their needs or for their intrinsic features but they are also looking for products that are consistent and reinforce the image they have of themselves or they would like to have.

The more a product or brand can convey a positive and favorable self-image to the consumer, the more it will be appreciated and regularly purchased.

IV. Psychological factors

Among the factors factors influencing consumer behavior, psychological factors can be divided into 4 categories: motivation, perception, learning as well as beliefs and attitudes.

Motivation:

Motivation is what will drive consumers to develop a purchasing behavior. It is the expression of a need is which became pressing enough to lead the consumer to want to satisfy it. It is usually working at a subconscious level and is often difficult to measure.

Motivation is directly related to the need and is expressed in the same type of classification as defined in the stages of the consumer buying decision process.

To increase sales and encourage consumers to purchase, brands should try to create, make conscious or reinforce a need in the consumer’s mind so that he develops a purchase motivation. He will be much more interested in considering and buy their products.

They must also, according to research, the type of product they sell and the consumers they target, pick out the motivation and the need to which their product respond in order to make them appear as the solution to the consumers’ need.

Perception:

Perception is the process through which an individual selects, organizes and interprets the information he receives in order to do something that makes sense. The perception of a situation at a given time may decide if and how the person will act.

Depending to his experiences, beliefs and personal characteristics, an individual will have a different perception from another.

Each person faces every day tens of thousands of sensory stimuli (visual, auditory, kinesthetic, olfactory and gustatory). It would be impossible for the brain to process all consciously. That is why it focuses only on some of them.

The perception mechanism of an individual is organized around three processes:

Selective Attention: The individual focuses only on a few details or stimulus to which he is subjected. The type of information or stimuli to which an individual is more sensitive depends on the person.

For brands and advertisers successfully capture and retain the attention of consumers is increasingly difficult. For example, many users no longer pay any attention, unconsciously, to banner ads on the Internet. This kind of process is called Banner Blindness.

The attention level also varies depending on the activity of the individual and the number of other stimuli in the environment. For example, an individual who is bored during a subway trip will be much more attentive to a new ad displayed in the tube. It is a new stimuli that breaks the trip routine for him.

Consumers will also be much more attentive to stimuli related to a need. For example, a consumer who wishes to buy a new car will pay more attention to car manufacturers’ ads. While neglecting those for computers.

Lastly, people are more likely to be attentive to stimuli that are new or out of the ordinary. For example, an innovative advertising or a marketing message (Unique Value Proposition) widely different from its competitors is more likely to be remembered by consumers.

Selective Distortion :

In many situations, two people are not going to interpret an information or a stimulus in the same way. Each individual will have a different perception based on his experience, state of mind, beliefs and attitudes. Selective distortion leads people to interpret situations in order to make them consistent with their beliefs and values.

For brands, it means that the message they communicate will never be perceived exactly in the same way by consumers. And that everyone may have a different perception of it. That’s why it’s important to regularly ask consumers in order to know their actual brand perception.

Selective distortion often benefits to strong and popular brands. Studies have shown that the perception and brand image plays a key role in the way consumers perceived and judged the product.

Several experiments have shown that even if we give them the same product, consumers find that the product is or tastes better when they’ve been told that it’s from a brand they like than when they’ve been told it’s a generic brand. While it is exactly the same product!

Similarly, consumers will tend to appreciate even less a product if it comes from a brand for which they have a negative perception.

Selective Retention: People do not retain all the information and stimuli they have been exposed to. Selective retention means what the individual will store and retain from a given situation or a particular stimulus. As for selective distortion, individuals tend to memorize information that will fit with their existing beliefs and perceptions.

For example, consumers will remember especially the benefits of a brand or product they like and will “forget” the drawbacks or competing products’ advantages.

Learning:

Learning is through action. When we act, we learn. It implies a change in the behavior resulting from the experience. The learning changes the behavior of an individual as he acquires information and experience.

For example, if you are sick after drinking milk, you had a negative experience, you associate the milk with this state of discomfort and you “learn” that you should not drink milk. Therefore, you don’t buy milk anymore.

Rather, if you had a good experience with the product, you will have much more desire to buy it again next time.

Beliefs and attitudes:

A belief is a conviction that an individual has on something. Through the experience he acquires, his learning and his external influences (family, friends, etc..), he will develop beliefs that will influence his buying behavior.

While an attitude can be defined as a feeling, an assessment of an object or idea and the predisposition to act in a certain way toward that object. Attitudes allow the individual to develop a coherent behavior against a class of similar objects or ideas.Beliefs as well as attitudes are generally well-anchored in the individual’s mind and are difficult to change. For many people, their beliefs and attitudes are part of their personality and of who they are.

However, it is important to understand, identify and analyze the positive attitudes and beliefs but also the negative ones that consumers can have on a brand or product. To change the brand’s marketing message or adjust its positioning in order to get consumers to change their brand perception.

Many factors influencing consumer behavior

As we have just seen, many factors, specificities and characteristics influence the individual in what he is and the consumer in his decision making process, shopping habits, purchasing behavior, the brands he buys or the retailers he goes.

A purchase decision is the result of each and every one of these factors. An individual and a consumer is led by his culture, his subculture, his social class, his membership groups, his family, his personality, his psychological factors, etc.. And is influenced by cultural trends as well as his social and societal environment.

By identifying and understanding the factors that influence their customers, brands have the opportunity to develop a strategy, a marketing message (Unique Value Proposition) and advertising campaigns more efficient and more in line with the needs and ways of thinking of their target consumers. A real asset to better meet the needs of its customers and increase sales.

The Consumer Buying Decision Process

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 Maslow’s hierarchy of needs: 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 decision-making process 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 great infomercial for this new kitchen tool, 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.