Principles of Marketing: Consumer Behavior - Consumer Decision Process, Problem Recognition Information Search Evaluation Purchase Postpurchase

What It Is

The Consumer Decision Process is a step-by-step framework that explains how customers make purchasing decisions. It's essential in marketing because understanding this process helps businesses create effective marketing strategies, products, and services that meet customer needs. For example, Apple's iPhone launch campaign targeted problem recognition by highlighting the need for a user-friendly smartphone, then guided customers through the information search, evaluation, purchase, and post-purchase stages.

Key Concepts & Frameworks

• Problem Recognition: Identifying a need or want that isn't being met.
  • Example: Nike's "Find Your Greatness" campaign recognized the problem of people not feeling confident in their athletic abilities.
• Information Search: Gathering information about products or services.
  • Example: Amazon's product reviews and ratings help customers search for information about products.
• Evaluation: Comparing and selecting between options.
  • Example: A customer evaluates different smartphones based on features, price, and brand reputation.
• Purchase: The act of buying a product or service.
  • Example: A customer buys a new smartphone after evaluating options.
• Post-purchase: The experience after buying a product or service.
  • Example: A customer's satisfaction with their new smartphone after using it for a few weeks.
• AIDA Model: Attention, Interest, Desire, Action.
  • Example: A company uses social media to grab attention, then creates engaging content to build interest and desire, and finally encourages action through a call-to-action.
• 4Ps/7Ps: Product, Price, Place, Promotion (extended to People, Process, Physical Evidence).
  • Example: A company decides on a product (smartphone), price ($500), place (online and in-store), promotion (advertising and social media), people (customer support), process (easy returns), and physical evidence (store design).
• PESTEL Analysis: Political, Economic, Social, Technological, Environmental, and Legal factors.
  • Example: A company analyzes the impact of government regulations (political), economic recession (economic), changing consumer behavior (social), technological advancements (technological), environmental concerns (environmental), and industry regulations (legal) on their business.

How to Apply It

• Segment a market: Start with geographic, then add psychographic like lifestyle.
• Create a marketing mix: Use the 4Ps/7Ps framework to develop a comprehensive marketing strategy.
• Develop a customer journey map: Visualize the customer's experience across all touchpoints to identify areas for improvement.
• Use data to inform marketing decisions: Analyze customer data to understand behavior and preferences.

Common Mistakes

• Mistake: Assuming customers are aware of their needs and wants.
  • Correction: Recognize that customers may not be aware of their needs and wants, and use marketing to educate them.
• Mistake: Focusing solely on the product features.
  • Correction: Consider the customer's needs, wants, and pain points when developing a product or service.
• Mistake: Ignoring the post-purchase experience.
  • Correction: Prioritize customer satisfaction and loyalty by delivering a positive post-purchase experience.

Exam / Interview Tips

• Be prepared to explain the consumer decision process: Use the AIDA model and 4Ps/7Ps framework to illustrate your understanding.
• Highlight your ability to analyze customer data: Use examples from your experience or hypothetical scenarios to demonstrate your data analysis skills.
• Emphasize your understanding of marketing mix: Explain how you would develop a comprehensive marketing strategy using the 4Ps/7Ps framework.

Quick Practice

Scenario 1: A customer is considering buying a new smartphone. What stage of the consumer decision process are they in?

A) Problem recognition B) Information search C) Evaluation D) Purchase

Answer: B) Information search. Explanation: The customer is gathering information about different smartphones to make an informed decision.

Scenario 2: A company wants to increase sales of its new product. What should it do?

A) Increase the price B) Improve the product features C) Develop a comprehensive marketing strategy using the 4Ps/7Ps framework D) Ignore customer feedback

Answer: C) Develop a comprehensive marketing strategy using the 4Ps/7Ps framework. Explanation: A well-planned marketing strategy can help the company reach its target audience and increase sales.

Scenario 3: A customer is dissatisfied with their recent purchase. What stage of the consumer decision process are they in?

A) Problem recognition B) Information search C) Evaluation D) Post-purchase

Answer: D) Post-purchase. Explanation: The customer is experiencing a negative outcome after buying the product, which is a post-purchase issue.

Last-Minute Cram Sheet

• Consumer Decision Process: A step-by-step framework explaining how customers make purchasing decisions.
• Problem Recognition: Identifying a need or want that isn't being met.
• Information Search: Gathering information about products or services.
• Evaluation: Comparing and selecting between options.
• Purchase: The act of buying a product or service.
• Post-purchase: The experience after buying a product or service.
• AIDA Model: Attention, Interest, Desire, Action.
• 4Ps/7Ps: Product, Price, Place, Promotion (extended to People, Process, Physical Evidence).
• PESTEL Analysis: Political, Economic, Social, Technological, Environmental, and Legal factors.
• Marketing Mix: A comprehensive marketing strategy using the 4Ps/7Ps framework.
• Customer Journey Map: A visual representation of the customer's experience across all touchpoints.
• ROI: Return on Investment = (Gain – Cost)/Cost.
• Marketing Myopia: Focusing on the product instead of the customer need.
• Segmentation: Dividing a market into distinct groups based on demographics, behavior, or needs.
• Target Market: A specific group of customers that a company aims to reach with its marketing efforts.