Compare and Contrast the Decision Making Process

1. Compare and contrast the decision making process that consumers might go through for the purchase BOTH of the following:

a) Tea/coffee

b) A new winter coat

What are the implications for marketing practice?

Decision making refers to the “act of reaching a conclusion” (Engleberg & Wynn, 2010). There are five steps in decision making process: need recognition, information search, evaluation of alternatives, purchase and post-purchase evaluation. This is a life cycle when consumers make decisions.

Consumers may follow these decision making steps when they make certain purchases, but this rational process does not accurately portray many of them. Decision making when buying tea/coffee is habitual. Habitual decision making is choices they make with little to no conscious effort when they make purchases. For example, when certain tea brings certain benefits to the consumers (rose bud tea – reduce body fat and increase blood circulation) in their previous experiences, they will continue buying it and ultimately it becomes as their habit. Thus, this makes them to develop brand loyalty and repetitive behaviours.

On the other hand, decision making when buying winter coat is seasonal. People only wear winter coats during winter season. As winter coat is a shopping product, the decision making process is more complicated than tea/coffee. It is based on what brands are available in the market before or during winter season. Generally, consumers will put more efforts on researching for more information because they need to find out and compare which brands of winter coat is more worth to purchase.

In these both products, consumers tailor the amount of mental effort depending on the importance of the purchase in their decision making process. For the first time tea/coffee drinkers, they may choose branded tea/coffee products instead of non-branded tea/coffee products; for consumers who want to purchase winter coat, they may choose branded winter coat instead of non-branded winter coat as well, because they believe they get what they pay for. Furthermore, they want to display their value expression and want to be part of the group.

However in the reality, habitual decision making poses a problem when a marketer try to introduce a new way to do an old task. In this situation, they can do certain sales promotion to convince consumers “unfreeze” their former habit and replace it with new one. This is also applicable for consumers who buy winter coats.

1. Describe and then critique the five steps decision making process model.

Decision making refers to the “act of reaching a conclusion” (Engleberg & Wynn, 2010). There are five steps in decision making process: need recognition, information search, evaluation of alternatives, purchase and post-purchase evaluation .This is a life cycle when consumers make decisions.

Need recognition failure to match between current and desire state. Consumers define that there is a perceived problem to be solved. This can occur when consumers buy products that do not satisfy their needs or they realize they have new needs or desires. For example, when you buy a brand A laptop, it occurs many problems after one week, then you realize actually brand B can fulfil your need. This makes their actual state decrease. In this situation, marketers attempt to create primary demand, encourage consumers to use products regardless the brand they choose; and secondary demand, encourage consumers to prefer only one brand or organization over another. Furthermore, marketers can influence need recognition of consumers through reminding their purchase needs and changing their perceptions of ideal and actual state.

Once consumers recognize problems, they will find ways to solve it. Information search is a process which consumers survey products and environment for appropriate data to make reasonable decision. When consumers engage in on-going search, it is a perception or attitude learning. It helps them to differentiate internal search and external search. Internal search is motivated activation of knowledge stored in memory; external search is gaining information from advertisement, friends and family, website and etc. However in other times, consumers may know a product through deliberate search. It is a directed learning and it will lead to amount of info search and product knowledge. As consumers will feel insecure in looking for info and eventually ask opinions from other in the stage of novice. Then, when they have identified sources of info, they are in the stage of moderate. Lastly, when they are having sufficient info, they are in the stage of expert. In contrast, when consumers gain information in ‘do not need someone comes to you’ situation such as leaflet you receive, packaging and sales promotion activities. It is an incidental learning and often absorbed unconsciously by consumers. However, consumers do not always engage with rational search process, which evaluate the good of a product over another. In fact, people are rarely have time to read all the information on a product label before they purchase.

Then, consumers need much efforts go into a purchase decision occurs at a stage where a choice must be made from several alternatives. In the stage of evaluation of alternatives, the alternatives are known as the evoked set, which the products are already in memory and prominent in retail environment; inept set, which the products are aware but consumers will not consider buying and inert set, which the products are not aware and consumers will not consider buying at all. Generally, marketers want their products to be in the evoked set. Once consumers consider buying a product, they will become heuristics, to make a speedy decision when they have a mindset of more expensive goods are better. Moreover, in the decision rules of consumers, there are compensatory and non-compensatory. Compensatory occurs when a product has both good and bad qualities, bad qualities of product need to be removed, and extended problem solving arise where consumers have higher involvement. For example, purchase a house or car. In contrast, non-compensatory occurs when no amount of other good qualities can make up for it, limited problem solving arise when consumers have low involvement. It helps consumers to cut down choices and make quick decision based on their considerations.

Once consumers assembly and relevant options in a category, eventually they have to choose one from the product choices. In the stage of purchase, their decisions are depending on the information they have and the selection made in the previous stage based on the perceived value, product’s features and capabilities that are considerations of consumers. Additionally, their choices can be influenced by attitudes of others and unexpected situational factors. Thus, their purchase decisions can be categorised into three parts, which are trial, repeat and rarely. 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 that was hesitating between three brands of his “evoked set”.