Describe the stages in the consumer purchase decision process.

Problem Recognition: Perceiving a Need

Problem recognition, the initial step in the purchase decision, is perceiving a difference between a person’s ideal and actual situations big enough to trigger a decision. This can be as simple as finding an empty milk carton in the refrigerator; noting, as a first-year college student, that your high school clothes are not in the style that other students are wearing; or realizing that your notebook computer may not be working properly.

In marketing, advertisements or salespeople can activate a consumer’s decision process by showing the shortcomings of competing (or currently owned) products. For instance, an advertisement for a new generation smartphone could stimulate problem recognition because it emphasizes “maximum use from one device.”

Information Search: Seeking Value

After recognizing a problem, a consumer begins to search for information, the next stage in the purchase decision process. First, you may scan your memory for previous experiences with products or brands.This action is called internal search. For frequently purchased products such as shampoo and conditioner, this may be enough.

In other cases, a consumer may undertake an external search for information.This is needed when past experience or knowledge is insufficient, the risk of making a wrong purchase decision is high, and the cost of gathering information is low. The primary sources of external information are (1) personal sources, such as relatives and friends whom the consumer trusts; (2) public sources, including various product-rating organizations such as Consumer Reports, government agencies, and TV “consumer programs”; and (3) marketer-dominated sources,such as information from sellers including advertising, company websites, salespeople, and point-of-purchase displays in stores.

FIGURE 5–1

The purchase decision process consists of five stages.

Suppose you are considering buying a new smartphone. You will probably tap several of these information sources: friends and relatives, advertisements, brand and company websites, and stores carrying these phones (for demonstrations). You also might study the comparative evaluation of selected smartphones appearing in Consumer Reports, a portion of which appears

Consumer Reports provides an evaluation of smartphones for consumers.

Source: “Ratings: Smart Phones,” Consumer Reports (August 2013), p. 39. This excerpted list of smartphones is only for Verizon customers. These smartphones are listed alphabetically and not in the order of their ratings.

Consumer Reports

Alternative Evaluation: Assessing Value

The alternative evaluation stage clarifies the problem for the consumer by (1) suggesting criteria to use for the purchase, (2) yielding brand names that might meet the criteria, and (3) developing consumer value perceptions. Given only the information shown in , which selection criteria would you use in buying a smartphone? Would you use price, display quality, voice quality, messaging, web browsing, camera image quality, battery life, or some other combination of these or other criteria?

For some of you, the information provided may be inadequate because it does not contain all the factors you might consider when evaluating smartphones. These factors are a consumer’s  evaluative criteria , which represent both the objective attributes of a brand (such as display) and the subjective ones (such as prestige) you use to compare different products and brands.Firms try to identify and capitalize on both types of criteria to create the best value for the money paid by you and other consumers. These criteria are often displayed in advertisements.

Consumers often have several criteria for evaluating brands. Knowing this, companies seek to identify the most important evaluative criteria that consumers use when comparing brands. For example, among the seven criteria shown in , suppose you use four in considering smartphones: (1) a retail price of $200 or less, (2) excellent messaging capability, (3) good voice quality, and (4) very good to excellent camera image quality. These criteria establish the brands in your  consideration set —the group of brands a consumer would consider acceptable from among all the brands in the product class of which he or she is aware

This advertisement for the Dröid Razr Maxx HD by Motorola focuses on the brand’s extended battery life, which limits the need for frequent charging, often at awkward times and places.

Your evaluative criteria result in two brands, Samsung and Motorola, and their respective models (the Samsung Galaxy S4 and the Motorola Dröid Razr Maxx HD and Dröid 4) in your consideration set. If the brand alternatives are equally attractive based on your original criteria, you might expand your list of desirable features. For example, you might decide that battery life is also important and compare the alternatives based on that criterion as well.

Page 114

Purchase Decision: Buying Value

Having examined the alternatives in the consideration set, you are almost ready to make a purchase decision. Two choices remain: (1) from whom to buy and (2) when to buy. For a product like a smartphone, the information search process probably involved visiting retail stores, seeing different brands advertised on television and newspapers, and viewing a smartphone on a seller’s website. The choice of which seller to buy from will depend on such considerations as the terms of sale, your past experience buying from the seller, and the return policy. Often a purchase decision involves a simultaneous evaluation of both product attributes and seller characteristics. For example, you might choose the second-most preferred smartphone brand at a store or website with a liberal refund and return policy versus the most preferred brand from a seller with more conservative policies.

Deciding when to buy is determined by a number of factors. For instance, you might buy sooner if one of your preferred brands is on sale or its manufacturer offers a rebate. Other factors such as the store atmosphere, pleasantness or ease of the shopping experience, salesperson assistance, time pressure, and financial circumstances could also affect whether a purchase decision is made now or postponed.

Use of the Internet to gather information, evaluate alternatives, and make buying decisions adds a technological dimension to the consumer purchase decision process and buying experience. For example, 45 percent of consumers with price comparison smartphone apps routinely compare prices for identical products across different sellers at the point of purchase prior to making a purchase decision.