What are the stages of " Buying Decision Process " ?

The Buyer decision process is the decision making process used by consumers regarding market transactions before, during, and after the purchase of a good or service.

More generally, decision making is the cognitive process of selecting a course of action from multiple alternatives. Common examples include shopping and deciding what to eat. Decision making is a psychological construct. This means that although a decision can not be "seen", we can infer from observable behaviour that a decision has been made. Therefore we conclude that a psychological "decision making" event has occurred. It is a construction that imputes commitment to action. That is, based on observable actions, we assume that people have made a commitment to effect the action.

There are generally three ways of analysing consumer buying decisions:

• Economic models - largely quantitative and are based on the assumptions of rationality and near perfect knowledge. The consumer is seen to maximize their utility. See consumer theory. Game theory can also be used in some circumstances.
• Psychological models - 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 behaviour models - practical models used by marketers. They typically blend both economic and psychological models.

Neuroscience is a useful tool and a source of theory development and testing in buyer decision-making research. Neuroimaging devices are used in Neuromarketing to investigate consumer behaviour.

Due to normal psychology, there are five stages consumers experience with a purchase:

• 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-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 good word for the product and increases the chance of frequent repurchase.

Nobel laureate Herbert A. Simon sees economic decision making as a vain attempt to be rational. He claims (in1947 and1957) that if a complete analysis is to be done, a decision will be immensely complex. He also says that peoples' information processing ability is limited. The assumption of a perfectly rational economic actor is unrealistic. Consumers are influenced by emotional and nonrational considerations making attempts to be rational only partially successful

I think, the gentlemen had said enough, but I may summarize as:

- Problem acknowledgment

- Identifying and analyzing Need

- Research and analysis of all options

- Best choice selection

I. Need recognition / Problem recognition :

The need recognition is the first and most important step in the buying process. If there is no need, there is no purchase. This recognition happens when there is a lag between the consumer’s actual situation and the ideal and desired one.

However, not all the needs end up as a buying behavior. It requires that the lag between the two situations is quite important. But the “way” (product price, ease of acquisition, etc.) to obtain this ideal situation has to be perceived as “acceptable” by the consumer based on the level of importance he attributes to the need.

For example, you have a pool and you would like someone to take care of regularly cleaning it instead of you (ideal situation) because it annoys you to do it yourself (actual situation). But you don’t judge the “way” to reach this ideal situation (pay $250 / month for a specialized company) as “acceptable” because its price to obtain it seems too high. Especially compared to the relatively low level of importance you attach to it. So you won’t have a purchase behavior in this situation.

On the other hand, the ability to be able to go to your work by car in20 minutes every morning (ideal situation) rather than lose three hours in transit because you do not have a car and you live in the countryside (actual situation) is something that means a lot to you. So you will have a buying behavior to purchase a car. Even if the price is important.

In addition to a need resulting from a new element, the gap between the actual situation and the ideal situation may be due to three cases. The current situation has not changed, but the ideal situation has (a neighbor told you about the possibility – that you did not know – to clean the pool by a specialized company). Or, the ideal situation is still the same but it’s the actual situation has changed (you’re tired of cleaning your pool by yourself). Or finally, the two situations have changed.

The recognition of a need by a consumer can be caused in different ways. Different classifications are used:

• Internal stimuli (physiological need felt by the individual as hunger or thirst) which opposes the external stimuli such as exposure to an advertisement, the sight of a pretty dress in a shop window or the mouth-watering smell of a french “pain au chocolat” when passing by a bakery.

• Classification by type of needs:
  • Functional need: the need is related to a feature or specific functions of the product or happens to be the answer to a functional problem. Like a computer with a more powerful video card to be able to play the latest video games or a washing machine that responds to the need to have clean clothes while avoiding having to do it by hand or go to the laundromat.
  • Social need: the need comes from a desire for integration and belongingness in the social environment or for social recognition. Like buying a new fashionable bag to look good at school or choose a luxury car to “show” that you are successful in life.
  • Need for change: the need has its origin in a desire from the consumer to change. This may result in the purchase of a new coat or new furniture to change the decoration of your apartment.

• The Maslow’s hierarchy of needs: Developed by the eponymous psychologist, this is one the best known and widely used classifications and representations for hierarchy of needs. It specifies that an individual is “guided” by certain needs that he wants to achieve before seeking to focus on the following ones:
  • 1. Physiological needs
  • 2. Safety needs
  • 3. Need of love and belonging
  • 4. Need of esteem (for oneself and from the others)
  • 5. Need of self-actualization

II. Information search

Once the need is identified, it’s time for the consumer to seek information about possible solutions to the problem. He will search more or less information depending on the complexity of the choices to be made but also his level of involvement. (Buying pasta requires little information and involves fewer consumers than buying a car.)

Then the consumer will seek to make his opinion to guide his choice and his decision-making process with:

• Internal information: this information is already present in the consumer’s memory. It comes from previous experiences he had with a product or brand and the opinion he may have of the brand.

Internal information is sufficient for the purchasing of everyday products that the consumer knows – including Fast-Moving Consumer Goods (FMCG) or Consumer Packaged Goods (CPG). But when it comes to a major purchase with a level of uncertainty or stronger involvement and the consumer does not have enough information, he must turns to another source:

• External information: This is information on a product or brand received from and obtained by friends or family, by reviews from other consumers or from the press. Not to mention, of course, official business sources such as an advertising or a seller’s speech.

During his decision-making process and his Consumer Buying Decision Process, the consumer will pay more attention to his internal information and the information from friends, family or other consumers. It will be judged more “objective” than these from an advertising, a seller’s speech or a commercial brochure of the product.

III. Alternative evaluation

Once the information collected, the consumer will be able to evaluate the different alternatives that offer to him, evaluate the most suitable to his needs and choose the one he think it’s best for him.

In order to do so, he will evaluate their attributes on two aspects. The objective characteristics (such as the features and functionality of the product) but also subjective (perception and perceived value of the brand by the consumer or its reputation).

Each consumer does not attribute the same importance to each attribute for his decision and his Consumer Buying Decision Process. And it varies from one shopper to another. Mr. Smith may prefer a product for the reputation of the brand X rather than a little more powerful but less known product. While Mrs. Johnson has a very bad perception of that same brand.

The consumer will then use the information previously collected and his perception or image of a brand to establish a set of evaluation criteria, desirable or wanted features, classify the different products available and evaluate which alternative has the most chance to satisfy him.

The process will then lead to what is called “evoked set”. “The evoked set” (aka “consideration set”) is the set of brands or products with a probability of being purchased by the consumer (because he has a good image of it or the information collected is positive).

On the other hand, “inept set” is the set of brands or products that have no chance of being purchased by the shopper (because he has a negative perception or has had a negative buying experience with the product in the past). While “inert set” is the set of brands or products for which the consumer has no specific opinion.

The higher the level of involvement of the consumer and the importance of the purchase are stronger, the higher the number of solutions the consumer will consider will be important. On the opposite, the number of considered solutions will be much smaller for an everyday product or a regular purchase.

IV. Purchase decision

Now that the consumer has evaluated the different solutions and products available for respond to his need, he will be able to choose the product or brand that seems most appropriate to his needs. Then proceed to the actual purchase itself.

His decision will depend on the information and the selection made in the previous step based on the perceived value, product’s features and capabilities that are important to him.

But his Consumer Buying Decision Process and his decision process may also depend or be affected by such things as the quality of his shopping experience or of the store (or online shopping website), the availability of a promotion, a return policy or good terms and conditions for the sale.

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 who was hesitating between three brands of his “evoked set”.

V. Post-purchase behavior

Once the product is purchased and used, the consumer will evaluate the adequacy with his original needs (those who caused the buying behavior). And whether he has made ​​the right choice in buying this product or not. He will feel either a sense of satisfaction for the product (and the choice). Or, on the contrary, a disappointment if the product has fallen far short of expectations.

An opinion that will influence his future decisions and buying behavior. If the product has brought satisfaction to the consumer, he will then minimize stages of information search and alternative evaluation for his next purchases in order to buy the same brand. Which will produce customer loyalty.

On the other hand, if the experience with the product was average or disappointing, the consumer is going to repeat the5 stages of the Consumer Buying Decision Process during his next purchase but by excluding the brand from his “evoked set”.

The post-purchase evaluation may have important consequences for a brand. A satisfied customer is very likely to become a loyal and regular customer. Especially for everyday purchases with low level of involvement – such as Fast-Moving Consumer Goods (FMCG) or Consumer Packaged Goods (CPG). A loyalty which is a major source of revenue for the brand when you combine all purchases made by customer throughout his entire life (called “lifetime customer value”). The “Holy Grail” that all brands in the industry are trying to achieve.

Positive or negative, consumers will also be able to share their opinion on the brand. Whether in their family or by word-of-mouth. Or on a much broader scale now with social networks or on consumer product review websites. A tendency not to be overlooked because now with the Internet, an unhappy customer can have a strong power to harm for a brand.

That’s why that’s important for companies to have awareness of that matter. In addition to optimizing the customer experience, a guarantee (for example, for a washing machine), an efficient customer service and a specific call center are some of the assets that can be developed to improve post-purchase behavior if there is any trouble with the product.

I endorse other Expert's answers......

Nice and comprehensive explanation by Mr. VJ & Mr. Emad....... Appreciated.