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| Consumer Decision Process |
Although the marketer cannot influence
many of these factors, they can be useful in identifying interested buyers and
in shaping products and appeals to serve their needs better.
Marketers have to be extremely careful in
analyzing consumer behavior.
Consumers often turn down what appears
to be a winning offer. Polaroid found this out when it lost millions on its
Polarvision instant home movie system; Ford when it launched the Edsel; RCA on
its Selecta-Vision and Philips on its Laser Vision video-disc player; Sony with
DAT tapes; and Bristol with its trio of the Brabazon, Britannia and Concorde
airliners. So far we have looked at the cultural, social, personal and
psychological influences that affect buyers.
Now we look at how consumers make
buying decisions: first, the types of decision that consumers face; then the
main steps in the buyer decision process; and finally, the processes by which
consumers learn about and buy new products.
Types of Buying Decision Behavior
Consumer decision making varies with
the type of buying decision. Consumer buying behavior differs greatly for a
tube of toothpaste, a tennis racket, an expensive camera and a new car.
More complex decisions usually involve
more buying participants and more buyer deliberation.
Complex Buying Behavior
Consumers undertake complex buying
behavior when they are highly involved in a purchase and perceive significant
differences among brands, or when the product is expensive, risky, purchased
infrequently and highly self-expressive.
Typically, the consumer has much to
learn about the product category. For example, a personal computer buyer may
not know what attributes to consider.
Many product features carry no real
meaning; an 'Intel 200MIIz Pentium II Pro', 'SVGA display', '16Mb Sync DRAM,
256 Kb Cache' or even a '16X Max CD-ROM with 33.6 RPS fax/data (upgradeable to
56K)'.
This buyer will pass through a learning
process, first developing beliefs about the product, then developing attitudes,
and then making a thoughtful purchase choice.
Marketers of high-involvement products
must understand the information fathering and evaluation behavior of
high-involvement consumers.
They need to help buyers learn about
product-class attributes and their relative importance and about what the
company's brand offers on the important attributes.
Marketers need to differentiate their
brand's features, perhaps by describing the brand's benefits using print media
with long copy. They must motivate store salespeople and the buyer's
acquaintances to influence the final brand choice.
Recognizing this problem, Dixons, the
electrical retailers, is setting up the Link chain of stores dedicated to
helping baffled buyers on to the information superhighway and multimedia.
Dissonance-Reducing Buying Behavior
Dissonance-reducing buying behavior
occurs when consumers are highly involved with an expensive, infrequent or
risky purchase, but see little difference among brands. For example, consumers
buying carpeting may face a high involvement decision because carpeting is
expensive and self-expressive.
Yet buyers may consider most carpet
brands in a given price range to be the same. In this case, because perceived
brand differences are not large, buyers may shop around to learn what is
available, but buy relatively quickly.
They may respond primarily to a good
price or to purchase convenience. After the purchase, consumers might
experience post-purchase dissonance (after-sales discomfort) when they notice
certain disadvantages of the purchased carpet brand or hear favorable things
about brands not purchased.
To counter such dissonance, the
marketer's after-sale communications should provide evidence and support to
help consumers feel good both before and after their brand choices.
Habitual Buying Behavior
Habitual buying behavior occurs under
conditions of low consumer involvement and little significant brand difference.
For example, take salt.
Consumers have little involvement in
this product category - they simply go to the store and reach for a brand.
If they keep reaching for the same
brand, it is out of habit rather than strong brand loyalty. Consumers appear to
have low involvement with most low-cost, frequently purchased products.
Consumers do not search extensively for
information about the brands, evaluate brand characteristics and make weighty
decisions about which brands to buy.
Instead, they passively receive
information as they watch television or read magazines.
Ad repetition creates brand familiarity
rather than brand conviction. Consumers do not form strong attitudes towards a
brand; they select the brand because it is familiar and may not evaluate the
choice even after purchase.
Because buyers are not highly committed
to any brands, marketers of low involvement products with few brand differences
often use price and sales promotions to stimulate product trial.
Gaining distribution and attention at
the point of sale is critical. In advertising for a low-involvement product, ad
copy should stress only a few key points.
Visual symbols and imagery are
important because they can be remembered easily and associated with the brand.
Ad campaigns should include high repetition of short-duration messages.
Television is usually more effective
than print media because it is a low-Involvement medium suitable for passive
learning.
Advertising planning should be based on
classical conditioning theory, in which buyers learn to identify a certain
product, by a symbol repeatedly attached to it.
Products can be linked to some
involving personal situation. Nestle did this in a recent series of ads for
Gold Blend coffee, each consisting of a new soap-opera like episode featuring
the evolving romantic relationship between neighbors, Sharon and Tony.
Nestie's success in doing this
contrasts with the tea market in the United Kingdom where, although it is the
national drink, sales promotions dominate sales.
Variety-Seeking Buying Behavior
Consumers undertake variety-seeking
buying behavior in situations characterized by low consumer involvement, but
significant perceived brand differences.
In such cases, consumers often do a lot
of brand switching. For example, when purchasing biscuits, a consumer may hold
some beliefs, choose a biscuit without much evaluation, then evaluate that
brand during consumption.
But the next time, the consumer might
pick another brand out of boredom or simply to try something different. Brand
switching occurs for the sake of variety rather than because of
dissatisfaction. In such product categories, the marketing strategy may differ
for the market leader and minor brands.
The market leader will try to encourage
habitual buying behavior by dominating shelf space, avoiding out-of-stock
conditions and running frequent reminder advertising.
Challenger firms will encourage variety
seeking by offering lower prices, deals, coupons, free samples and advertising
that presents reasons for trying something new.
The Buyer Decision Process
Most large companies research consumer
buying decisions in great detail to answer questions about what consumers buy,
where they buy, how and how much they buy, when they buy and why they buy.
Marketers can study consumer purchases to find answers to questions about what
they buy, where and how much. But learning about the whys of consumer buying
behavior and the buying decision process is not so easy - the answers are often
locked within the consumer's head.
We will examine the stages that buyers
pass through to reach a buying decision.
Clearly the buying process starts long
before actual purchase and continues long after.
This encourages the marketer to focus
on the entire buying process rather than just the purchase decision.
This model implies that consumers pass
through all five stages with every purchase. But in more routine purchases,
consumers often skip or reverse some of these stages.
A woman buying her regular brand of
toothpaste would recognize the need and go right to the purchase decision,
skipping information search and evaluation. However, To illustrate this model,
we return to Anna Flores and try to understand how she became interested in
buying a camera and the stages she went through to make the final choice.
Need Recognition
The buying process starts with need
recognition - the buyer recognizing a problem or need. The buyer senses a
difference between his or her actual state and some desired state.
The need can be triggered by internal
stimuli when one of the person's normal needs - hunger, thirst, sex - rises to
a level high enough to become a drive.
From previous experience, the person
has learned how to cope with this drive and is motivated towards objects that
he or she knows will satisfy it.
A need can also be triggered by
external stimuli. Anna passes a bakery and the smell of freshly baked bread
stimulates her hunger; she admires a neighbors new car; or she watches a
television commercial for a Caribbean vacation. At this stage, the marketer
needs to determine the factors and situations that usually trigger consumer
need recognition.
The marketer should research consumers
to find out what kinds of need or problem arise, what brought them about and
how they led the consumer to this particular product.
Anna might answer that she felt she
needed a camera after friends showed her the photographs they took on holiday.
By gathering such information, the
marketer can identify the stimuli that most often trigger interest in the
product and can develop marketing programs that involve these stimuli.
Information Search
An aroused consumer may or may not
search for more information.
If the consumer's drive is strong and a
satisfying product is near at hand, the consumer is likely to buy it then. If
not, the consumer may simply store the need in memory or undertake an
information search related to the need.
At one level, the consumer may simply
enter heightened attention. Here Anna becomes more receptive to information
about cameras. She pays attention to camera ads, cameras used by friends and
camera conversations. Or Anna may go into active information search, in which
she looks for reading material, phones friends and gathers information in other
ways.
The amount of searching she does will
depend upon the strength of her drive, the amount of information she starts
with, the ease of obtaining more information, the value she places on
additional information and the satisfaction she gets from searching.
Normally the amount of consumer search
activity increases as the consumer moves from decisions that involve limited
problem solving to those that involve extensive problem solving. The consumer
can obtain information from any of several sources:
• Personal sources: family, friends, neighbors,
acquaintances.
• Commercial sources: advertising,
salespeople, dealers, packaging, displays.
• Public sources: mass media,
consumer-rating organizations.
• Experiential sources: handling,
examining, using the product.
The relative influence of these
information sources varies with the product and the buyer.
Generally, the consumer receives the
most information about a product from commercial sources - those controlled by
the marketer. The most effective sources, however, tend to be personal.
Personal sources appear to be even more
important in influencing the purchase of services.
Commercial sources normally inform the
buyer, but personal sources legitimize or evaluate products for the buyer.
For example, doctors normally learn of
new drugs from commercial sources, but turn to other doctors for evaluative
information.
As more information is obtained, the
consumer's awareness and knowledge of the available brands and features
increases.
In her information search, Anna learned
about the many camera brands available.
The information also helped her drop
certain brands from consideration.
A company must design its marketing mix
to make prospects aware of and knowledgeable about its brand. If it fails to do
this, the company has lost its opportunity to sell to the customer.
The company must also learn which other
brands customers consider so that it knows its competition and can plan its own
appeals.
The marketer should identify consumers'
sources of information and the importance of each source.
Consumers should be asked how they
first heard about the brand, what information they received and the importance
they place on different information sources.
Evaluation of Alternatives
We have seen how the consumer uses
information to arrive at a set of final brand choices.
How does the consumer choose among the
alternative brands?
The marketer needs to know about
alternative evaluation - that is, how the consumer processes information to
arrive at brand choices. Unfortunately, consumers do not use a simple and
single evaluation process in all buying situations.
Instead, several evaluation processes
are at work. Certain basic concepts help explain consumer evaluation processes.
First, we assume that each consumer is trying to satisfy some need and is
looking for certain benefits that can be acquired by buying a product or
service.
Further, each consumer sees a product
as a bundle of product attributes with varying capacities for delivering these
benefits and satisfying the need. For cameras, product attributes might include
picture quality, ease of use, camera size, price and other features. Consumers
will vary as to which of these attributes they consider relevant and will pay
the most attention to those attributes connected with their needs. Second, the
consumer will attach different degrees of importance to each attribute.
A distinction can be drawn between the
importance of an attribute and its salience.
Salient attributes are those that come
to a consumer's mind when he or she is asked to think of a product's
characteristics.
But these are not necessarily the most
important attributes to the consumer.
Some of them may be salient because the
consumer has just seen an advertisement mentioning them or has had a problem
with them, making these attributes 'top-of-the-mind'.
There may also be other attributes that
the consumer forgot, but whose importance would he recognized if they were
mentioned. Marketers should be more concerned with attribute importance than
attribute salience.
Third, the consumer is likely to
develop a set of brand beliefs about where each brand stands on each attribute.
The set of beliefs held about a
particular brand is known as the brand image.
The consumer's beliefs may vary from
true attributes based on his or her experience and the effect of selective
perception, selective distortion and selective retention.
Fourth, the consumer is assumed to have
a utility function for each attribute.
The utility function shows how the
consumer expects total product satisfaction to vary with different levels of
different attributes.
For example, Anna may expect her
satisfaction from a camera to increase with better picture duality; to peak
with a medium-weight camera as opposed to a very light or very heavy one; to be
a compact 35 mm camera rather than a single lens reflex camera with
interchangeable lenses.
If we combine the attribute levels at
which her utilities are highest, they make up Anna's ideal camera.
The camera would also be her preferred
camera if it were available and affordable.
Fifth, the consumer arrives at
attitudes towards the different brands through some evaluation procedure.
Consumers have been found to use one or
more of several evaluation procedures, depending on the consumer and the buying
decision.
In Anna's camera-buying situation,
suppose she has narrowed her choice set to four cameras: Nikon AF400. Olympus
Superzoom 110, Pcntax Espio Jr. and Ricoh RW1. In addition, let us say she is
interested primarily in four attributes - picture quality, ease of use, camera
size and price.
Anna believes the Nikon will give her
picture quality of 8 on a 10-point scale; is easy to use, 8; is of medium size,
9; and is very inexpensive, 10. Similarly, she has beliefs about how the other
cameras rate on these attributes.
The marketer would like to be able to
predict which camera Anna will buy.
Clearly, if one camera rated best on all
the attributes, we could predict that Anna would choose it. But the brands vary
in appeal. Some buyers will base their buying decision on only one attribute
and their choices are easy to predict.
If Anna wants low price above
everything, she should buy the Nikon, whereas if she wants the camera that is
easiest to use, she could buy either the Olympus or the Pentax.
Most buyers consider several
attributes, but assign different importance to each. If we knew the importance
weights that Anna assigns to the four attributes, we could predict her camera
choice more reliably. Suppose Anna assigns 40 per cent of the importance to the
camera's picture quality, 30 per cent to ease of use, 20 per cent to its size
and 10 per cent to its price.
To find Anna's perceived value for each
camera, we can multiply her importance weights by her beliefs about each
camera. This gives us the following perceived values:
We would predict that Anna will favor
the Pentax.
This model is called the expectancy
value model of consumer choice. This is one of several possible models
describing how consumers go about evaluating alternatives. Consumers might
evaluate a set of alternatives in other ways.
For example, Anna might decide that she
should consider only cameras that satisfy a set of minimum attribute levels.
She might decide a camera must have a super zoom lens.
In this case, we would predict that she
would choose Olympus because it is the only one that satisfies that
requirement.
This is called the conjunctive model of
consumer choice. Or she might decide that she would settle for a camera that
had a picture quality greater than 7 or ease of use greater than 9.
In this case, the Nikon, Olympus or the Pentax
would do, since they all meet at least one of the requirements.
This is called the disjunctive mode! of
consumer choice. Row consumers go about evaluating purchase alternatives
depends on the individual consumer and the specified buying situation.
In some cases, consumers use careful
calculations and logical thinking. At other times, the same consumers do little
or no evaluating; instead they buy on impulse and rely on intuition. Sometimes
consumers make buying decisions on their own; sometimes they turn to friends,
consumer guides or salespeople for buying advice.
Marketers should study buyers to find
out how they actually evaluate brand alternatives.
If they know what evaluative processes
go on, marketers can take steps to influence the buyer's decision.
Suppose Anna is now inclined to buy a
Pentax camera because of its ease of use and lightness.
What strategies might another camera
maker, say Olympus, use to influence people like Anna? There are several.
Olympus could modify its camera to
produce a version that has fewer features, but is lighter and cheaper.
It could try to change buyers' beliefs
about how its camera rates on key attributes, especially if consumers currently
underestimate the camera's qualities.
It could try to change buyers' beliefs
about Pentax and other competitors.
Finally, it could try to change the
list of attributes that buyers consider or the importance attached to these
attributes.
For example, it might advertise that
all good cameras need a super zoom lens to get the picture quality that active
people like Anna want.
Purchase Decision
In the evaluation stage, die consumer
ranks brands and forms purchase intentions.
Generally, the consumer's purchase
decision will be to buy the most preferred brand, but two factors, earn come
between the purchase intention and the purchase decision.
The first factor is the attitudes of
others. For example, if Anna Flores' husband feels strongly that Anna should
buy the lowest-priced camera, then the chance of Anna buying a more expensive
camera is reduced.
lie may like the specification of the
Pen tax, but be offended by its name being Espio Jr (junior).
How much another person's attitudes
will affect Anna's choices depends both on the strength of the other person's
attitudes towards her buying decision and on Anna's motivation to comply with
that person's wishes.
Purchase intention is also influenced
by unexpected situational factors.
The consumer may form a purchase
intention based on factors such as expected family income, expected price and
expected benefits from the product.
When the consumer is about to act,
unexpected situation;)! factors may arise to change the purchase intention.
Anna may lose her job, some other purchase may become more urgent or a friend
may report being disappointed in her preferred camera.
Thus preferences and even purchase intentions
do not always result in actual purchase choice.
They may direct purchase behavior, but
may not fully determine the outcome.
A consumer's decision to change,
postpone or avoid a purchase decision is influenced heavily by perceived risk.
Many purchases involve some risk
taking.35 Anxiety results when consumers cannot be certain about the purchase
outcome.
The amount of perceived risk varies
with the amount of money at stake, the amount of purchase uncertainty and die
amount of consumer self-confidence.
A consumer takes certain actions to
reduce risk, such as avoiding purchase decisions, gathering more information
and looking for national brand names and products with warranties.
The marketer must understand the
factors that provoke feelings of risk in consumers and must provide information
arid support that will reduce the perceived risk.
Post purchase Behavior
The marketer's job does not end when
the product is bought. After purchasing the product, the consumer will be
satisfied or dissatisfied and will engage in post purchase behavior of interest
to the marketer. What determines whether the buyer is satisfied or dissatisfied
with a purchase?
The answer lies in the relationship
between the consumer's expectations and the product's perceived performance.
If the product falls short of
expectations, the consumer is disappointed; if it meets expectations, the
consumer is satisfied; if it exceeds expectations, the consumer is delighted.
Consumers base their expectations on
messages they receive from sellers, friends and other information sources.
If the seller exaggerates the product's
performance, consumer expectations will not be met - a situation that leads to
dissatisfaction. The larger the gap between expectations and performance, the
greater the consumer's dissatisfaction.
This fact suggests that the seller
should make product claims that represent faithfully the product's performance
so that buyers are satisfied.
Motoring organizations regularly give
pessimistic quotes about how long they will take to reach a customer whose car
breaks down.
If they say they will be 30 minutes and
get there in 20, the customer is impressed.
If, however, they get there in 20
minutes after promising 10, the customer is not so happy. Almost all large
purchases result in cognitive dissonance or discomfort caused by post purchase
conflict. Consumers are satisfied with the benefits of the chosen brand and
glad to avoid the drawbacks of the brands not purchased.
On the other baud, every purchase
involves compromise. Consumers feel uneasy about acquiring the drawbacks of the
chosen brand and about losing the benefits of the brands not purchased.
Thus consumers feel at least some
postpurchase dissonance for every purchase.-1 ' 1 Why is it so important to
satisfy the customer?
Such satisfaction is important because
a company's sales come from two basic groups - new customers and repeat
customers.
It usually costs more to attract new
customers than to retain current ones.
Keeping current customers is therefore
often more critical than attracting new ones, and the best way to do this is to
make current customers happy.
A satisfied customer buys a product
again, talks favorably to others about the product, pays less attention to
competing brands and advertising, and buys other products from the company.
Many marketers go beyond merely meeting
the expectations of customers - they aim to delight the customer.
A delighted customer is even more
likely to purchase again and to talk favorably about the product and company.
A dissatisfied consumer responds
differently.
Whereas, on average, a satisfied
customer tells three people about a good product experience, a dissatisfied
customer gripes to 11 people. In fact, one study showed that 13 percent of the
people who had a problem with an organization complained about that company to
more than 20 people.^7 Clearly, bad word of mouth travels farther and faster
than good word of mouth and can quickly damage consumer attitudes about a
company and its products.
Therefore, a company would be wise to
measure customer satisfaction regularly.
It cannot simply rely on dissatisfied
customers to volunteer their complaints when they are dissatisfied.
In fact, 96 per cent of unhappy
customers never tell the company about their problem.
Companies should set up suggestion
systems to encourage customers to complain. In this way, the company can learn
how well it is doing and how it can improve. The 3M Company claims that over
two-thirds of its new-product ideas come from listening to customer complaints.
But listening is not enough - the
company must also respond constructively to the complaints it receives.
Thus, in general, dissatisfied
consumers may try to reduce their dissonance by taking any of several actions.
In the case of Anna - a Pen tax
purchaser - she may return the camera, or look at Pentax ads that tell of the
camera's benefits, or talk with friends who will tell her how much they like
her new camera.
She may even avoid reading about
cameras in case she finds a better deal than she got.
Beyond seeking out and responding to
complaints, marketers can take additional steps to reduce consumer post
purchase dissatisfaction and to help customers feel good about their purchases.
For example, Toyota writes or phones
new car owners with congratulations on having selected a fine car. It places
ads showing satisfied owners talking about their new cars ('I love what you do
for me, Toyota!'). Toyota also obtains customer suggestions for improvements
and lists the locations of available services. Understanding the consumer's
needs and buying process is the foundation of successful marketing.
By understanding how buyers go through
need recognition, information search, evaluation of alternatives, the purchase
decision and post purchase behavior, the marketer can pick up many clues as to
how to meet the buyer's needs.
By understanding the various
participants in the buying process and the strongest influences on their buying
behavior, the marketer can develop an effective programme to support an
attractive offer to the target market.
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