Consumer Decision Making Model

Consumer Decision Making Model The consumers decision making model deals with the process of consumer decision making. This model consists of three stages the Input stage; the Process stage and the out put stage. The input stage can be broadly categorized into Firms efforts and Socio-cultural Environment. The firms efforts relate to the firms marketing mix, i.e. Product, Promotion, Price, Channels of Distribution, People and Physical evidence. This stage involves the activities the firm undergoes to sell their products. Socio-cultural environment on the other hand is the environment of friends, family, society, culture and sub culture that surround a consumer. The input stage affects a consumers decision making. The decision-making is the second stage called process. In this stage the consumer does him pre-purchase research and evaluation based on the firms efforts and socio-cultural environment. The firms efforts and socio-cultural environment influence a consumers psychological field. The psychological field consists of Motivation, Perception, Learning, Attitude and Personality of a consumer. This stage also evaluates the past experience of the consumer. The final stage in the consumer decision-making is the Output stage. This stage is concerned with the actual purchase, repurchase and the purchase evauation. Cognitive View Cognitive View explains decision making from the thinking problem solvers perspective. According to Cognitive view, decision-making is an emotional or reasoning process, which can be rational or irrational and can be based on explicit assumptions or tacit assumptions. The most important characteristic of this view is that, a consumer is in pursuit of information until a satisfactory solution is found. Once the satisfactory solution is found, the process of collecting information is terminated. Problem solving view defines a consumer who lies between the two extremes of passive and economic view. It is believed that a consumer cannot have all the knowledge of all the alternative products. Hence the consumers decisions are not perfect. But nevertheless the consumer actively seeks information and attempts to make satisfactory decision. In a cognitive view, the consumer has a predefined goal. The next step is action plan or way to achieve the goal. The third step is implementation of this action plan and controlling it. The final step is attainment or failure of Goal. Consumer Decision Making and Cognitive Learning. As defined earlier, the first step in any decision-making is a need reorganization or goal. A consumers cognitive learning is related to pre-purchase search and evaluation of alternatives. For example, if a person is looking to buy a car he will first decide what features does he want in his vehicle. Whether his first preference is safety or performance. Based on this evaluation he will evaluate various car models available in the market. The consumers psychological field will come into play once he has identified his goal. The cognitive learning combined with attitude, personality and previously will form a perception in a consumers mind. This perception will thus motivate a consumer make a purchase decision. Marketers Efforts A firms marketing efforts play a very important role in influencing cognitive learning process. Over the years the marketers has provided the consumers with information to make them believe that they have sufficient knowledge and thus spur the decision making process. The best example of this can be seen as the Free or Sale adverts. These adverts convey that something is free or there is a sale on. This Free or Sale sticker on the window display of store is enough to attract the consumers inside the store. Marketers have used Promotional Model and Diffusion of Innovation to influence the consumers cognitive learning. The promotional model focuses on Attention, Interest, Desire and Action. The Sale sign is to attract the costumers attention. Up to 50% off written under the sale sign is to create interest. Store design and reduced prices to instigate the desire and marketing campaign to cause Action. There is silent need of a consumer to buy clothes. The moment the consumer comes across the Sale sign, the final piece of information is received that instigates action. The marketers over time introduce new technology and new products, using the Innovation Diffusion, to affect the persons cognitive learning and thus drive sales. Various automotive companies use the cognitive model to understand their customer and hence sell their cars. The purchases such as cars, which are expensive, are generally well thought out. The customers generally do a through pre-purchase research and evaluate their alternatives before making the purchase. Hence to attract these customers, the marketers promote their products with test drives, and other adverts that focus mainly on the features of the vehicles. Hierarchy of Needs It can be argued that people looking to satisfying self-actualization need may need complete information about a product. Their cognitive learning process may vary from that of those aiming to satisfying physiological, safety, social and esteem needs. But nevertheless, cognitive learning is ideal for satisfying every need on Maslows Hierarchy of Needs. The degree of information gathered might vary, but learning and information processing will be constant at each level. Passive View Passive view believes that can be manipulated by self-serving interests and promotional efforts of the marketers. To a certain extent this model can be believed to be true. But the passive model does not recognize that a consumer plays an equal role in making the purchase decision. The consumer does make pre-purchase search and evaluation before buying goods. This model can be applicable in case of B2C where the customer is absolutely unaware of good and the marketer is in position to manipulate the consumers. This is mainly evident in case of tourists. Local sellers and marketers in many places often manipulate tourists. Since the tourists have very little market and product knowledge, sales people can manipulate them. In case of B2B application of passive model is highly debatable, as business men and companies generally go through a through research and back ground check before buying their desired products. There are of course certain extra-ordinary incidents, when due to lack of time or resources B2B buyers can also be manipulated. Consumer Decision Making and Passive View In the passive view model the marketers generally use their marketing mix to influence the consumers perception, personality, learning, attitude and motivate the consumer to buy the product. Innovation Acceptance Model and Innovation Decision Model are being effectively used to influence the consumers psychological field and hence instigate the consumer to buy a particular product. Marketers Efforts Apple Inc for example, have been using the Passive view combined with the Innovation Diffusion to sale their products. They came up with Ipad in 2010 and with extensive and unique marketing mix managed to sell it well, now as of 24th March 2011; people are already queuing for the Ipad 2. It is nothing but belief in the passive model that is driving the sale of various electronic innovations in todays world. There are various other companies that make an effective use of passive view. The most notable among these are the high street fashion design labels. These retailer introduce their seasonal fashion, they popularize it using their extensive marketing campaign and sell them successfully at a profit. Louis Vuitton for example have been following a concept of retro marketing and selling their products to the customers at a high price and particular trademark design. Economic View Economic view believes in a world of perfect competition, where consumers make rational decisions all the time. In the true sense of the world this model is inappropriate as there can never be a situation of perfect competition. Besides it is also not possible for the consumer to make rational decisions all the time. Because for making rational decisions a consumer will have to be aware of all the products in the market, all possible alternatives and their features. Having all this information is literally impossible in todays fast changing world. Consumer Decision Making and Economic view The consumers economic decisions are mainly influenced by their needs, attitude, personality, cultural environment, and marketers efforts. The economists believe that the decline in price of a product will increase the demand. It is not always true. The consumers consider the price as something they have to give up for the product. So the decision depends on the need for the product. Maslows hierarchy of needs depict the security and psychological needs as a set of desires which forces buyers to focus more on food, shelter, family and safety rather than price. The attitude and personality also come into action during the decision making process. This has been clearly reflected in Maslows esteem needs. The economic view of a buyer with an attitude of self respect and esteem concentrate on their possessions. And the spotlight on the product and not the price influences their decisions. For instance, buying premium range clothes boasts the buyers esteem and attention from others. Consumers with this attitude may fall under the category of materialistic people. The economic view of a buyer depends on their personality of seeking for the potential and value of the product. Buyers satisfy their actualization needs by comparing price and quality of the product with the available alternatives. The psychological traits sets the The cross-cultural analysis reveals the fact that the benefits of products or services consumed differ from one country to another. For instance, possessing premium cars in Africa portrays ones esteem in the society. The marketers still consider that the consumers economic vision towards a product has little real life application. It is unlikely that the consumer will be aware of the knowledge of all the alternatives. The consumer with an economic view conducts an extensive decision making through comparing. So the marketers come up with tactical pricing strategies illustrating discounts and offers to motivate the stimuli of the consumers effectively. However, in B2B market it is different. The business markets have well-organized resources to attain the knowledge and the potential of the products and services. Marketers Efforts Various marketers have been using the low pricing and the economic view to attract their target market and thus increase their sales. The Pound stores in the UK and Dollar Stores in the United States of America are the examples of use of economic model. Various and frequent sales and low pricing offers by the companies to increase their sales are also examples of economic view. Primark would be an ideal example of a company that tries to make best of the economic view model. The company sells its merchandize at prices, which are lowest in the market. The quality of the products though, is not as good as other in the same market. Emotional View Emotional view believes in targeting emotions and impulse of the consumers. This view believes that there are certain feelings or emotions like joy, love fear fantasy etc attached to every purchase of the consumers A consumers is less likely to do pre-purchase evaluation and search before emotional purchase. Consumer Decision Making and Emotional View An emotional view model deals with the personality and attitude of the consumer. The emotions of a consumer attached to a particular product motivate the consumer to make a particular decision. Over the years the marketers have used emotions in the their adverts and marketing campaign to influence the personality and the attitude of the consumer. Marketers Efforts Over the years football clubs have sold their merchandize on the basis of the emotional view. The various holiday packages use emotions to attract the customers. My real-estate seller promote their homes and other properties with a tag line Your Home etc just to attract the emotional aspect to their product. The Body Shop has been using the emotional model attract its consumers. The company portrayed itself as more humanitarian than the others in the same industry, by campaigning against animal testing. Marketers have also been doing various other things with the physical evidence of their stores to attract the emotional feel. In Tesco, there is a scent of fresh bread in the bakery section. The All Saints have designed their stores with a display of old sewing machines and other cloths manufacturing goods of the old times. Hierarchy of Needs The emotional view is about satisfying the self-actualization need of the customer. It is more about doing things or buying things to feel good. But it can be argued that emotional views are also about fulfilling social and esteem needs to a certain extent. Relevance of the above views There have been various criticisms of the economic and the passive view models. These models are extremely opposite of each other. The economic model believes in the existence of perfect competition and the notion that every consumer is fully aware of all the products and their features in the markets. Whereas the passive view model believes that a consumer is fully submissive to the manipulations of the marketers and has not dominance of his own. In true sense of the world both these believes are baseless and surreal. But their presence in the world is possible in certain scenarios. The relevance of the cognitive and emotional models is justifiable. As consumers do tend to make pre-purchase evaluation as well as make decisions based on impulse and emotions. Hence the marketer should use the combination of both cognitive and emotional views to market their products. Alternative theories Freudian Freudian theory believes that an individuals personality is formed as she or he passes through various stages of infant and adulthood. It believes that consumers are initially unaware of the true reasons for buying what they buy. Freud proposed that an individuals personality consists of three interacting systems: Id, superego and ego. Ids are the primitive or the impulsive drives and include physiological needs. Superego is the individuals internal expression of societys moral and ethical code of conduct. Ego is the individuals self-conscience. These factors affect an individuals personality and hence influence his or her purchase decision-making. Neo Freudian Neo Freudian theory believes social relationships are fundamental to formation and development of personality. This theory has divided the individuals personality into three categories, i.e., compliant, aggressive and detached. The individuals with this kind of personality have different purchasing habits and behavior. Traits Theory Trait is any distinct and relatively enduring way in which an individual differs from other individuals. This theory believe that an individuals specific characteristics affect his decision making process. For example, a confident individual is more likely to buy a newly introduced product than a conservative product Marketers Efforts Marketers have used various creative adverts to attract these personality adverts. Nissans tag line Enjoy the ride is targeted toward safety conscious individuals. Nikes Just do it is targeted toward impulsive personality, whereas Mountain Dews Do the Dew marketing campaign is targeted toward the adventurous people. Conclusion There are various factors that affect a consumer, while making a purchase decision. These decisions can be rational or irrational, economy driven or emotion driven. But all these decisions are influence by a consumers motivation, perception, learning, attitude and personality. This in turn is affected by the research and evaluation of the consumer. And all these factors are further influenced by the marketing communication of the firm.