Decision Making

Topics: Risk, Marketing, Decision making Pages: 7 (2381 words) Published: June 5, 2013
Consumer decision making is a process – Evaluate why marketers need to understand this process.

Consumers constantly make decisions regarding to the choices, purchases and use of products and services. Consumers are often faced with a large number of alternatives, which are changing due to new technologies and competitive pressures (Bettman, J. R., & Sujan, M. (1987). Journal of Consumer Research, 14, 50-51). The consumer is often not completely certain about how a product may perform. Even when the product meets the consumer’s expectations, they may not buy this product again. Finally, if the consumer decides not using this product, they have several options, including outright disposal, recycling, or remarketing. These decisions are great important not only for the consumers themselves, but also for marketers and policymakers. Simple Consumer Decision Process with 5 steps is easier and sometimes not requires an information search process. But managers and marketers still have to get in sign to customers and analyze their thought through the complex process in order to formulate strategies to keep existing customers and entice new customers. (Blackwell, R., (2006). Consumer Behavior, 1, 89). The Consumer Decision Process (CDP) model including 7 steps: Need recognition, Search for information, Pre-purchase evaluation of alternatives, Purchase, Consumption, Post-consumption evaluation and Divestment.

1. Need recognition
The buying process starts with need recognition. At this stage, the buyer recognizes a problem or need (e.g. I am hungry, we need a new sofa, I have a headache) or responds to a marketing stimulus (e.g. you pass Starbucks and are attracted by the aroma of coffee and chocolate muffins). Recognition of shortage occurs when a consumer becomes alerted to the fact that a product needs to be repurchased. A product such as a suit may wear out. The consumer may run out of an item such as razor blades. Service may be necessary for a product such as an automobile. It may be time for a periodic service such as an eye examination. In each of these examples, the consumer recognizes a need to replenish a good or service. Recognition of unfulfilled desire occurs when a consumer becomes aware of product not purchased before. The item may improve self-image, status, appearance or knowledge in a manner that has not been tried before (luxury auto, cosmetic surgery, encyclopedia), or it may offer new performance characteristics not previously available (videotape camera, tobacco-free cigarettes). In either case the consumer is aroused by a desire to try something new. Although need recognition is often outside a company‘s control, marketers should understanding need recognition because of its benefits. It may reveal potential opportunities that a business may wish to exploit (Nicosia, F. (1966) Consumer Decision Processes, Prentice Hall, Englewood Cliffs, 1966). When the customer’s unsatisfied desires occur, marketers may create the market segmentation to have the new sales opportunities. Many firms have made the mistake of developing new products based on what they are able to manufacture or sell rather than based on what consumers want to buy (Miniard, P., & Engel, J., (2006). Consumer Behavior, 1, 69). An analysis of need recognition helps firm from the mistake of flooding the market with unnecessary product variations.

2. Search for information
Once need recognition occurs, consumers begin searching for information and solutions about the products to satisfy their unmet needs. Usually there are two sources that consumers use to search: •Internal: retrieving knowledge from memory or genetic tendencies. •External: collecting information from peers, family and the marketplace. The length of search depends on each consumer’s situation. For example, a student buying a favorite hamburger would recognize the need (hunger) and go right to the purchase decision, skipping information search and evaluation. Besides,...

References: Bettman, J. R., & Sujan, M. (1987). Journal of Consumer Research, 14, 50-51.
Blackwell, R., (2006). Consumer Behavior, 1, 89.
Nicosia, F. (1966) Consumer Decision Processes, Prentice Hall, Englewood Cliffs, 1966
Miniard, P., & Engel, J., (2006)
Mitchell, V-W. (1999). Consumer perceived risk: Conceptualizations and models. European Journal of Marketing, 33 (1/2), 163-195.
Horton, R. L. (1976). The structure of perceived risk. Journal of the Academy of Marketing Science, 4, 694-706.
Urbany, J., Dickinson, P.R., & Wilkie, W.L. (1989). Buyer uncertainty and information search. Journal of Consumer Research, 16, 208-215.
Roche, Allen (2006) ICON-Simply aesthetic. Consumer behavior. 154-158.
Gilmore, Andrew (2006) SKYBURY COFFEE. Consumer behavior. 60-63.
Leaupepe, Lisa and Peter, Raija (2006) POWERCO. Consumer behavior. 179-181.
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