Explain Why It Is Important for Marketers to Understand the Consumer Decision Making Process

Understanding consumer behaviour is essential to succeed in business. As Solomon et al. (2013) stresses, businesses exist to satisfy consumer’s needs. By identifying and understanding the factors that influences their customers, firms have the opportunity to develop a more efficient strategy, marketing message and advertising campaigns that is more in line with the needs and ways of thinking of their target consumers (Perreau, 2015).

After the buyer has evaluated all options to respond to his need, the fourth step is the actual purchase decision, in which the consumer buys the value that he has perceived, sought, and assessed. This step is dependent on the “product’s features and capabilities, perceived value, quality of shopping experience (online or in store), availability of promotion, return policy, or conditions for the sale” (Perreau, 2016). The fifth and last step of this process is the post-purchase behavior, in which the buyer creates value in consumption or use. After a purchase, the buyer will weigh the adequacy of the product/service compared to his original needs that initially caused the buying behavior process. He will assess the choice he made. If the product brings satisfaction, he will be able to use fewer steps in his next purchase decision. There won’t be a search of information or evaluation of alternatives, for example. This lack of purchase decision and immediate buying decision to repurchase will create customer loyalty. On the other hand, if the buyer experienced dissatisfaction, he will repeat the five steps of the consumer buying decision that was just explained.

To understand consumer behaviour is an important process as it allows marketers to comprehend better the reason why an individual choose to select, purchase and use a good or service to satisfy their needs and wants based on his or her buying tendencies and spending patterns. The analysis of consumer behaviour requires the consideration of various processes, internal and external factors for the individual. Both internal and external factors of an individual are required necessary for the analysis of consumer behaviour, as well as examining the complex interaction of many influencing elements, such as personal and cultural influences, which includes identity (Moutinho 1987). Identity plays a vital part in the unsustainable

Consumers base and make their decisions on expected results. One theory states that consumers are seen as rational individuals who have the ability of estimating the results of different decisions made and thereby selecting the most lucrative one. This theory is known as utility theory. Though consumers are comparatively good at approximating the results of an occurrence, not all consumers are completely coherent, dependable or aware of all aspects in the decision-making process. For this reason, the utility theory has been criticized, but despite its insufficiency, the theory is still well thought-out as a main case in the concerns of decision-making. A new and simpler theory called satisficing had a different approach, instead of, as the utility theory, finding the best result, this theory allows the consumer choose what satisfies his/her needs and then stops the decision making process. An example of this could be the process of finding a house. A more psychological approach has been used in the research of consumer decision-making. This involves the development of prospect theory which has extended the two existing theories and has incorporated psychological factors by adding worth and endowment (Richarme, 2001).

Consumers are considered as the most important external stakeholders of an organization. They are the lifeblood of a business and the biggest source of revenues. Therefore, organizations need to meet and exceed their expectations in order to survive and compete with their rivals in the most competitive and profitable way (Koran, Faber, Aboujaoude, Large, & Serpe, 2010). These expectations can only be met if they are fully aware of their consumers' behavior towards their products or services (Pride & Ferrell, 2012). Therefore, the biggest challenge for them is to influence the consumers' buying decision through effective advertisements and promotional campaigns (Puccinelli, Goodstein, Grewal, Price, Raghubir, & Stewart, 2009).

Now and again, these topics may convert into changing desires for business organizations and arrangements. Based on the changing desires and needs and wants, “people 's purchasing behaviour ultimately, are shaped by their environment and their values. Therefore, when you are creating new products or services in different countries or regions, it is important to conduct research beforehand about the target market. Consider characteristics like the role of gender in the culture, their decision-making process and what they value the most”(Innov8 Education Solutions, 2017). Based on that, it is clearly stated that the importance of understanding the different culture is just cannot be ignored, and should be implemented to enter the market also understanding the consumer’s behaviour in the market. Besides, the importance of understanding the cross cultural communication through the brand that the company wants has to be accepted in the cultural or even in the society.

As the world becomes commercially more integrated the customers around the world have unprecedented amount of choices this makes the buying behavior more and more complex. The abundance of choices in the retail environment makes the completion between the sellers very intense. If that was not enough the ever new means of advertisement and readily available information on various goods make the buying decision even more complex.

In order to understand the minds of consumers, marketers need to have knowledge of the psychological aspects of how it works. Having this understanding, along with the five stages of the consumers buying process, will assist marketers on how they can influence a consumer’s purchase behavior. Employing the strategies of the four P’s of marketing can be bonuses that will help companies gain an advantage within the marketplace.

As shown below in the Figure 2.5 on the next page, the consumer buying process is influenced by several different factors. The diagram is a modified version of an image created by Smith and Rupp, portrays what kind of thought process occurs when buying. The diagram was modified to portray the strategic buying process from the view point of a young Spanish woman who is using a fashion blog as a source of information. The original diagram, which considered the effect of social media on a buyer, was

On the contrary, perceived quality affects consumers’ satisfaction which leads to consumers’ behavioral intention as Bitner (1990) suggested that perceived quality can be similar to consumer’s attitude or ‘a form of overall evaluation of a product’ (Olshavsky, 1985) and behavioral intention is a logical consequence of attitudes. When it comes to judging a product, consumers usually go through the analyzing stages about the information and benefit of the product. Therefore the ‘Grey benefit chain’ developed by Feigin and Young (1975) and the mean-ends chain concept are used to examine the cognitive structure of consumers, which consists of four levels: Product, functional

Social elements influence buyer conduct altogether. Each individual has somebody around affecting their purchasing choices. The essential social variables are: reference bunches, family, part and status. (Perreau, 2014.).

For marketers it is crucial to know the cultural background of their market and to spot developments to be able to meet the changing needs of their target market. For example years ago the trend towards health and fitness opened a whole new industry sector to push into. (Kotler et al., 2013)

Omar (1999) notes that it is vital for any organisation to know and understand their customers in order to achieve good retail marketing to which McGoldrick (2002) agrees with this as he states that understanding the consumer needs, motives and decision making processes are vital in the retail marketing strategy.

Looking at figure 1 the first stage of the decision process is the ‘need recognition’, this is where the consumer realises a need for something. This could come from perhaps running out of something and needing more, or receiving information on a product from an external source that leads them to want it.

Consumer behaviour has become a significant subject in marketing area because it has greatly influenced companies’ operation including not only established companies, but also new companies. It seems that consumer behaviour is unstable as it can be impacted by many factors. The purpose of this project is to observe these factors affecting consumer behavior and analysis effects of consumer behavior on established and new companies. With regard to these effects, it is concluded that consumer behavior has not only positive effects, but also negative effects on both types of companies. Moreover, negative effects can be avoided by effective approaches. This paper would be interested to companies who face problems about consumer