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The buying decision process is the
decision-making In psychology, decision-making (also spelled decision making and decisionmaking) is regarded as the Cognition, cognitive process resulting in the selection of a belief or a course of action among several possible alternative options. It could be ...
process used by consumers regarding the market transactions before, during, and after the purchase of a
good In most contexts, the concept of good denotes the conduct that should be preferred when posed with a choice between possible actions. Good is generally considered to be the opposite of evil and is of interest in the study of ethics, morality, ph ...
or service. It can be seen as a particular form of a
cost–benefit analysis Cost–benefit analysis (CBA), sometimes also called benefit–cost analysis, is a systematic approach to estimating the strengths and weaknesses of alternatives. It is used to determine options which provide the best approach to achieving benefits ...
in the presence of multiple alternatives. Common examples include
shopping Shopping is an activity in which a customer browses the available goods or services presented by one or more retailers with the potential intent to purchase a suitable selection of them. A Retail#Shopper profiles, typology of shopper types ha ...
and deciding what to eat. Decision-making is a psychological construct. This means that although a decision cannot be "seen", we can infer from observable behavior that a decision has been made. Therefore, we conclude that a psychological "decision-making" event has occurred. It is a construction that imputes a commitment to action. That is, based on observable actions, we assume that people have made a commitment to effect the action. Nobel laureate
Herbert A. Simon Herbert Alexander Simon (June 15, 1916 – February 9, 2001) was an American political scientist, with a Ph.D. in political science, whose work also influenced the fields of computer science, economics, and cognitive psychology. His primary ...
sees
economic An economy is an area of the Production (economics), production, Distribution (economics), distribution and trade, as well as Consumption (economics), consumption of Goods (economics), goods and Service (economics), services. In general, it is ...
decision-making as a vain attempt to be rational. Simon claimed (in 1947 and 1957) that if a complete analysis is to be done, a decision will be immensely complex. Simon also wrote that peoples' information processing ability is limited. The assumption of a perfectly
rational Rationality is the quality of being guided by or based on reasons. In this regard, a person acts rationally if they have a good reason for what they do or a belief is rational if it is based on strong evidence. This quality can apply to an abili ...
economic actor is unrealistic. Consumers are influenced by emotional and nonrational considerations making attempts to be rational only partially successful. He called for replacing the perfect rationality assumptions of
homo economicus The term ''Homo economicus'', or economic man, is the portrayal of humans as agents who are consistently rational and narrowly self-interested, and who pursue their subjectively defined ends optimally. It is a word play on ''Homo sapiens'', u ...
with a conception of rationality tailored to cognitively limited agents. Even if the buyer decision process was highly rational, the required
product information In marketing, a product is an object, or system, or service made available for consumer use as of the consumer demand; it is anything that can be offered to a market to satisfy the desire or need of a customer. In retailing, products are ofte ...
and/or knowledge is often substantially limited in quality or extent, as is the availability of potential alternatives. Factors such as cognitive effort and decision-making time also play a role.


Stages

The stages of the buyer decision process were first introduced by John Dewey in 1910. Later studies expanded upon Dewey's initial finding. Engel, Blackwell and Kollat in (1968). *Problem/Need Recognition - Recognize what the problem or need is and identify the product or type of product which is required. Page text. *Information Search - The consumer researches the product which would satisfy the recognized need. *Evaluation of Alternatives - The consumer evaluates the searched alternatives. Generally, the information search reveals multiple products for the consumer to evaluate and understand which product would be appropriate. *Purchase Decision - After the consumer has evaluated all the options and would be having the intention to buy any product, there could be now only two things which might just change the decision of the consumer of buying the product that is what the other peers of the consumer think of the product and any unforeseen circumstances. Unforeseen circumstances for example, in this case, could be financial losses which led to not buying of the product. *Post Purchase Behavior - After the purchase, the consumer may experience post-purchase dissonance feeling that buying another product would have been better. Addressing post-purchase dissonance spreads the good word for the product and increases the chance of frequent repurchase. These five stages are a framework to evaluate customers' buying decision process. While many consumers pass through these stages in a fixed, linear sequence, some stages such as evaluation of alternatives may occur throughout the purchase decision. The time and effort devoted to each stage depend on a number of factors including the perceived risk and the consumer's motivations. In the case of an impulse purchase, such as the purchase of a chocolate bar as a personal treat, the consumer may spend minimal time engaged in information search and evaluation and proceed directly to the actual purchase.


Problem/need-recognition

Problem/Need-recognition is the first step in the buying decision. Without knowing what the customer needs,they will not be enticed to purchase the product. The need can be triggered by internal stimuli (e.g.
hunger In politics, humanitarian aid, and the social sciences, hunger is defined as a condition in which a person does not have the physical or financial capability to eat sufficient food to meet basic nutritional needs for a sustained period. In the ...
,
thirst Thirst is the craving for potable fluids, resulting in the basic instinct of animals to drink. It is an essential mechanism involved in fluid balance. It arises from a lack of fluids or an increase in the concentration of certain osmolites, suc ...
) or external stimuli (e.g.
advertising Advertising is the practice and techniques employed to bring attention to a product or service. Advertising aims to put a product or service in the spotlight in hopes of drawing it attention from consumers. It is typically used to promote a ...
).  Maslow held that needs are arranged in a hierarchy. According to
Maslow's hierarchy Maslow's hierarchy of needs is an idea in psychology proposed by American psychologist Abraham Maslow in his 1943 paper "A Theory of Human Motivation" in the journal ''Psychological Review''. Maslow subsequently extended the idea to include his ob ...
, only when a person has fulfilled the needs at a certain stage, can he or she move to the next stage. The problem must be the products or services available. It's how the problem must be recognized.


Information search

The information search stage is the next step that the customers may take after they have recognized the problem or need in order to find out what they feel is the best solution. This is the buyer's effort at searching the internal and external business environments to identify and observe sources of information related to the focal buying decision. The field of information has come a long way in the last forty years, and has enabled easier and faster information discovery. Consumers can rely on print, visual, and/or voice media for getting information.


Evaluation of alternatives

At this stage, consumers evaluate different products/brands on the basis of varying product attributes, and whether these can deliver the benefits that the customers are seeking.  This stage is heavily influenced by one's attitude, as "attitude puts one in a frame of mind: liking or disliking an object, moving towards or away from it".  Another factor that influences the evaluation process is the degree of involvement. For example, if the customer involvement is high, then he/she will evaluate a number of brands; whereas if it is low, only one brand will be evaluated.


Purchase decision

This is the fourth stage, where the purchase takes place. According to Kotler, Keller, Koshy, and Jha (2009), the final purchase decision can be disrupted by two factors: negative feedback from other customers and the level of motivation to comply or accept the feedback. For example, after going through the above three stages, a customer chooses to buy a
Nikon D80 The Nikon D80 is a digital single-lens reflex camera model announced by Nikon on August 9, 2006. The camera shipped the first week of September to US retailers. Considered by many to be a hybrid of design elements of the entry-level D50 and hig ...
DSLR A digital single-lens reflex camera (digital SLR or DSLR) is a digital camera that combines the optics and the mechanisms of a single-lens reflex camera with a digital imaging sensor. The reflex design scheme is the primary difference between ...
camera. However, because his good friend, who is also a photographer, gives him negative feedback, he will then be bound to change his preference. Secondly, the decision may be disrupted due to unanticipated situations such as a sudden job loss or the closing of a retail store.


Post-purchase behavior

These stages are important to keeping customers. Customers match products with their experiences on whether they are either content or discontent with the product. This affects the decision process for resemblant purchases from the same company in the future, mainly at the information search stage and evaluation of alternatives stage. If brand loyalty is made then customers will often fast-tracked or skip completely the information search and evaluation of alternative stages. Either being content or discontent, a customer will spread good or bad opinions about the product. At this stage, companies try to make favorable post-purchase communication to encourage the customers to purchase.  Also,
cognitive dissonance In the field of psychology, cognitive dissonance is the perception of contradictory information, and the mental toll of it. Relevant items of information include a person's actions, feelings, ideas, beliefs, values, and things in the environment. ...
(
consumer confusion Consumer confusion is a state of mind that leads to consumers making imperfect purchasing decisions or lacking confidence in the correctness of their purchasing decisions. Confusion Confusion occurs when a consumer fails to correctly understand o ...
in marketing terms) is common at this stage; customers often go through the feelings of post-purchase psychological tension or anxiety. Questions include: "Have I made the right decision?", "Is it a good choice?", etc.


Models of buyer decision-making

There are generally three ways of analyzing consumer buying decisions: *
Economic models In economics, a model is a theoretical construct representing economic processes by a set of variables and a set of logical and/or quantitative relationships between them. The economic model is a simplified, often mathematical, framework desig ...
- largely quantitative and are based on the assumptions of rationality and near perfect knowledge. The consumer is seen to maximize its utility. See
consumer theory The theory of consumer choice is the branch of microeconomics that relates preferences to consumption expenditures and to consumer demand curves. It analyzes how consumers maximize the desirability of their consumption as measured by their pref ...
.
Game theory Game theory is the study of mathematical models of strategic interactions among rational agents. Myerson, Roger B. (1991). ''Game Theory: Analysis of Conflict,'' Harvard University Press, p.&nbs1 Chapter-preview links, ppvii–xi It has appli ...
can also be used in some circumstances. *
Psychological models Psychology is the scientific study of mind and behavior. Psychology includes the study of conscious and unconscious phenomena, including feelings and thoughts. It is an academic discipline of immense scope, crossing the boundaries between t ...
- psychological and cognitive processes such as motivation and need recognition. They are qualitative rather than quantitative and build on sociological factors like cultural influences and family influences. *
Consumer behavior Consumer behavior is the study of individuals, groups, or organizations and all the activities associated with the purchase, use and disposal of goods and services. Consumer behaviour consists of how the consumer's emotions, attitudes, and pr ...
models - practical models used by marketers. They typically blend both economic and psychological models. In an early study of the buyer decision process literature, Frank Nicosia (Nicosia, F. 1966; pp 9–21) identified three types of buyer decision-making models. They are the
univariate In mathematics, a univariate object is an expression, equation, function or polynomial involving only one variable. Objects involving more than one variable are multivariate. In some cases the distinction between the univariate and multivariate cas ...
model (He called it the "simple scheme".) in which only one behavioral determinant was allowed in a stimulus-response type of relationship; the multi-variate model (He called it a "reduced form scheme".) in which numerous
independent variables Dependent and independent variables are variables in mathematical modeling, statistical modeling and experimental sciences. Dependent variables receive this name because, in an experiment, their values are studied under the supposition or deman ...
were assumed to determine buyer behavior; and finally the "system of equations" model (He called it a "structural scheme" or "process scheme".) in which numerous functional relations (either univariate or multivariate) interact in a complex system of equations. He concluded that only this third type of model is capable of expressing the complexity of buyer decision processes. In chapter 7, Nicosia builds a comprehensive model involving five modules. The encoding module includes determinants like "attributes of the brand", "environmental factors", "consumer's attributes", "attributes of the organization", and "attributes of the message". Other modules in the system include consumer decoding, search and evaluation, decision, and consumption. Some
neuromarketing Neuromarketing is a commercial marketing communication field that applies neuropsychology to market research, studying consumers' sensorimotor, cognitive, and affective responses to marketing stimuli. The potential benefits to marketers include ...
research papers examined how to approach motivation as indexed by electroencephalographic (EEG) asymmetry over the prefrontal cortex predicts purchase decision when brand and price are varied. In a within-subjects design, the participants have presented purchase decision trials with 14 different grocery products (seven private labels and seven national brand products) whose prices were increased and decreased while their EEG activity was recorded. The results showed that relatively greater left frontal activation (i.e., higher approach motivation) during the decision period predicted an affirmative purchase decision. The relationship of frontal EEG asymmetry with purchase decision was stronger for national brand products compared with private label products and when the price of a product was below a normal price (i.e., implicit reference price) compared with when it was above a normal price. The higher perceived need for a product and higher perceived product quality were associated with greater relative left frontal activation. For any high-involvement product category, the decision-making time is normally long and buyers generally evaluate the information available very cautiously. They also utilize an active information search process. The risk associated with such a decision is very high.


Neuroscience

Neuroscience Neuroscience is the scientific study of the nervous system (the brain, spinal cord, and peripheral nervous system), its functions and disorders. It is a multidisciplinary science that combines physiology, anatomy, molecular biology, development ...
is a useful tool and a source of theory development and testing in buyer decision-making research. Neuroimaging devices are used in
Neuromarketing Neuromarketing is a commercial marketing communication field that applies neuropsychology to market research, studying consumers' sensorimotor, cognitive, and affective responses to marketing stimuli. The potential benefits to marketers include ...
to investigate consumer behavior.


See also


References


Bibliography

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