Consumer Decision Making Process Models and their ..., Summaries of Decision Making

Download Consumer Decision Making Process Models and their ... and more Summaries Decision Making in PDF only on Docsity! International Management Review Vol. 15 No. 1 2019 36 Consumer Decision Making Process Models and their Applications to Market Strategy Diksha Panwar, Swati Anand, Farmaan Ali, and Kanika Singal Uttaranchal University Dehradun, Dehradun, Uttarakhand, India [Abstract] Marketers strive to understand various steps in the whole process of consumer decision making for final purchase of the products of their choices. The marketers may improve their marketing strategies by understanding aspects, which are most common in the different consumer decision model developed by earlier researchers of marketing. Market models assume that the consumer's purchase decision process consists of various steps through which the buyer passes in purchasing a product or service. However, this might not be the case. It is not necessary for every consumer to pass through all these stages when making a decision to purchase, and, in fact, some of the stages can be skipped, depending on the type of purchases. This paper analyses the reasons for the study of the consumer’s decision-making process with using models, which help organizations to improve their marketing strategies to convince the customers more effectively. [Keywords] decision making, service industry, consumer behavior models, strategy Introduction The term consumer behavior is defined as the behavior that consumers display in searching for purchasing, using, evaluating, and disposing of products and services that they expect will satisfy their needs. The study of consumer behavior focuses on how individuals make decisions to spend their available resources (time, money, effort) on consumption- related items (Schhiffman, & Lazar, 2007). The field of consumer behavior covers a lot of ground. According to Solomon (1996), consumer behavior is a study of the processes involved when individuals or groups select, purchase, use, or dispose of products, services, ideas or experiences to satisfy needs and desires. The official definition of consumer behavior given by Belch (1978) is "the process and activities people engage in when searching for, selecting, purchasing, using, evaluating and disposing of products and services so as to satisfy their needs and desires." Behavior occurs either for the individual or in the context of a group, or an organization. Consumer behavior involves the use and disposal of products, as well as the study of how they are purchased. Product use is often of great interest to the marketer because this may influence how a product is best positioned or how we can encourage increased consumption. Anderason (1965) proposed one of the oldest models of consumer behavior. This model is shown in Figure 1: Anderson Model of Decision. The model recognizes the importance of information in the consumer decision-making process. It also emphasizes the importance of consumer attitudes, although it fails to consider attitudes in relation to repeat purchase behavior. International Management Review Vol. 15 No. 1 2019 37 Figure 1. Anderson Model of Decision International Management Review Vol. 15 No. 1 2019 40 mechanisms are effective and implemented. In this study, the authors paid more attentions to services than durable and non-durable products. Erasmus (2001) critically studied consumer decision-making models in the consumer science behavior in the sixties. Initial theories based on the economics theory presumed that consumers act rationally to maximize satisfaction in their purchase of goods and services, as did the study by Schiffman and Kanuk. The consumer decision models and theories developed in the early years are still being used to structure research in the field of consumer behavior and consumer sciences in spite of evidence that consumer decision-making is a more complex phenomenon and that it cannot be generalized over the wider spectrum of consumer goods. Enabling consumers assumes an understanding of the consumer as a prerequisite. Researchers within the field of consumer science are interested in contributing to understanding consumer behavior theory that focuses on consumption behavior, which includes the complexities of emotions, situational factors, and personal influences under specific circumstances rather than buyer behavior. Related literatures were used while traditional models of consumer behavior should not be regarded the norm for organizing research and the interpretation of research findings. This study emphasized consumer decision-making and related theory to provide exciting opportunities for future research by professionals in the consumer science discipline. Adding to what has been done in the field of marketing sciences, consumer researchers could contribute their product-specific knowledge and experience to a more holistic understanding of consumer behavior; in the long, and this run will contribute to the theory construction, which will give value to all. Gross (2014) examined the factors that influence the virtual, online consumer decision-making model by interpreting relevant decision-making models. The study suggested that consumers purchase when mediated by virtual websites, a process that is influenced by interactivity and information overload built into the overarching concept of consumer decision-making. Therefore, the researcher outlines many decision-making models. The researcher proposed the assumption that decision-making models are geared to either the consumers’ cognition or information flow. Clearly mentioned in the study, the e-tail merchant can move the flow and ample amounts of information, mitigate the online purchasing risk, and finally allow for interactivity between the online site and the consumer in the millennial service industry. Jha (2014) identified that the major indications for purchase decision-making with the theories/models of consumers’ buying behaviors are alike in their outcome; this varies on the basis of consumers’ urgencies and the intensity of needs and wants for a particular product. However, products have their own relevance in a consumer’s buying decision-making process, depending on its utilities and urgencies to consumers apart from various consideration of price, quality, etc., and attitudes, perceptions and self-concepts. Model of Consumer Decision-Making Framework Gilbert (1991) suggested a model for consumer decision-making that is shown in Figure 3. This model suggests there are two levels of factors that have an effect on the consumer. The first level of influences is close to the person and includes psychological influences, such as perception and learning. The second level of influences includes those that have been developed during the socialization process and include reference groups and family influences. All models that have been adapted for tourism offer some insights into the consumer behavior process involved during the purchase/post-purchase decision stages. International Management Review Vol. 15 No. 1 2019 41 Figure 3. Consumer Decision Making Framework Stimulus-Response Model of Buyer Behavior Middleton et al. (2009) presented an adapted model of consumer behavior tourism for the service industry, which was termed the stimulus-response model of buyer behavior. The model is shown in Figure 4. The stimulus response of buying behavior is based on four interactive components; the central components are identified as buyer’s characteristics and decision process. Figure 4. Stimulus Response Model of Buying Behavior International Management Review Vol. 15 No. 1 2019 42 The model separates out motivators and determinants in consumer buying behavior and also emphasizes the important effects that an organization can have on the consumer buying process by the use of communication channels. After analysis of various models, we observed and proposed the model that consumers go through a five-stage decision-making process in any purchase/ post purchase. Figure 4. Five Stage Decision Making Model ( Proposed Model). This model is important for anyone making marketing decisions. It forces the marketer to consider the whole buying process rather than just the purchase decision (when it may be too late for a business to influence the choice). The model implies that customers pass through all stages in every purchase. However, in more routine purchases, customers often skip or reverse some of the stages. For example, a college student buying a favorite soft drink would recognize the need (thirst) and go right to the purchase decision, skipping information search and evaluation. However, the model is very useful when it comes to understanding any purchase that requires some thought and deliberation. The buying process starts with need recognition. At this stage, the buyer recognizes a problem or need. An “aroused” customer then needs to decide how much information (if any) is required. If the need is strong and there is a product or service that meets the need close at hand, then a purchase decision is likely to be made there and then. If not, then the process of information search begins. Most importantly, customers can get information from different sources, such as personal public and experiential sources. The usefulness and influence of these sources of information will vary by product and by customer. It has been observed that customers value and respect personal sources more than commercial sources. The challenge for the organizations is to identify which information sources are most influential in their target markets to satisfy the customer in the competitive environment. Discussion In the world of marketing, different models of consumer behavior describe satisfaction as the final output of the decision processor and incorporates it in the feedback mechanism linking completed experiences to future behavior in markets. For example, Nicosia and Mayer (1976) attributes the state of CS/D to the dominant interest in the "final act" of consumers, which is the purchase of product. In their consumer behavior models, satisfaction is shown as the final output in the framework of purchase decisions.