Using relevant examples from your personal experience, deliberate on the types, styles and issues concerning decision making in your household.    

Decision-making process

Research suggests that customers go through a five-stage decision-making process in any purchase. This is summarised in the diagram below

This model is important for anyone making marketing decisions. It forces the marketer to considerthe whole buying process rather than just the purchase decision (when it may be too late for a business to influence the choice)

The model implies that customers pass through all stages in every purchase. However, in more routine purchases, customers often skip or reverse some of the stages.

For example, a student buying a favourite hamburger would recognise the need (hunger) and go right to the purchase decision, skipping information search and evaluation. However, the model is very useful when it comes to understanding any purchase that requires some thought and deliberation.

Need Recognition

The buying process starts with need recognition. At this stage, the buyer recognises a problem or need (e.g. I am hungry, we need a new sofa, I have a headache) or responds to a marketing stimulus (e.g. you pass Starbucks and are attracted by the aroma of coffee and chocolate muffins).

Internal Stimuli – Hunger or thirst

External Stimuli – New hobby e.g. Taking photography as a new hobby

Information Search

 

If the consumer’s drive is strong and a satisfying product is near at hand, the consumer is likely to buy it. If not, the consumer may store the need in the memory to undertake an information search related to the need. At one level, the consumer may simply enter heightened attention, such as paying attention to advertisement, information from or conversation to friends.

An “aroused” customer then needs to decide how much information (if any) is required. If the need is strong and there is a product or service that meets the need close to hand, then a purchase decision is likely to be made there and then. If not, then the process of information search begins.

A customer can obtain information from several sources:

•           Personal sources: family, friends, neighbours etc

•           Commercial sources: advertising; salespeople; retailers; dealers; packaging; point-of-sale displays

•           Public sources: newspapers, radio, television, consumer organisations; specialist magazines

•           Experiential sources: handling, examining, using the product

The relative influence of these information sources varies with the product and the buyer. Generally, the consumer receives the most information about a product from commercial sources, which are controlled by marketer. The most effective sources tend to be personal.

The usefulness and influence of these sources of information will vary by product and by customer. Research suggests that customer’s value and respect personal sources more than commercial sources (the influence of “word of mouth”). The challenge for the marketing team is to identify which information sources are most influential in their target markets.

Evaluation of Alternatives

In the evaluation stage, the customer must choose between the alternative brands, products and services. Unfortunately, consumers do not use a simple and single evaluation process in all buying situations. Instead, several evaluation processes are at work. Consumers go about evaluating purchase alternatives depend on the individual consumer and the specific buying decision. In some cases, consumers use careful calculations and logical thinking. At other times, the same consumers do little or no evaluating; instead they buy on impulse and rely on intuition.

An important determinant of the extent of evaluation is whether the customer feels “involved” in the product. By involvement, we mean the degree of perceived relevance and personal importance that accompanies the choice.

Where a purchase is “highly involving”, the customer is likely to carry out extensive evaluation.

High-involvement purchases include those involving high expenditure or personal risk – for example buying a house, a car or making investments.

Low involvement purchases (e.g. buying a soft drink, choosing some breakfast cereals in the supermarket) have very simple evaluation processes.

Purchase Decision

In the evaluation stage, the consumer ranks brands and forms purchase intentions. Generally, the consumer purchase decision is to buy the most preferred brand, but two factors may come in between the purchase intention and purchase decision. They are attitude of others and unexpected situational factors.

Purchase intention is based on factors such as expected income, price and product benefits. Unexpected events may change the purchase intention. Thus, preferences and even purchase intentions do not always result in actual purchase choice.

Post-purchase evaluation - Cognitive Dissonance

The final stage is the post-purchase evaluation of the decision. It is common for customers to experience concerns after making a purchase decision. This arises from a concept that is known as “cognitive dissonance”. The customer, having bought a product, may feel that an alternative would have been preferable. In these circumstances that customer will not repurchase immediately, but is likely to switch brands next time.

It reflects on the relationship between the consumer’s expectations and the product’s perceived performance. If the product’s perceived performance falls short of consumer’s expectations. The consumer is therefore disappointed.

To manage the post-purchase stage, it is the job of the marketing team to persuade the potential customer that the product will satisfy his or her needs. Then after having made a purchase, the customer should be encouraged that he or she has made the right decision.

Using relevant examples from your personal experience, deliberate on the types, styles and issues concerning decision making in your household.

Household decision making are often based on altruism and kinship, which is more moral than economic decisions. The institutionalized kinship ties help to create resource sharing, altruism and mutual accommodation in purchase and consumption. Household decision can be based on fairness or equity, which depends on the culture, social class and ethnicity in the particular country. These criterions affect individuals’ attitudes concerning lifestyle norms, gender norms and age-role norms.

Case Study: (From personal experience)

I am married with three children, dual income earners, and middle-income family. We take example of purchasing weekly groceries together with children.

Types of decision-making:

1) Syncretic or joint – decisions made by a group or coalition in the house hold

2) Autonomic – decisions made by a single household member, usually the husband or the wife

3) Decisions made with one spouse dominant in the process

Based on my experience, my wife and I usually make the decision in purchasing groceries. The type of the decision making is 1) syncretic or joint decision. The reasons of this syncretic or joint decision making is to bring the family bond closer, understanding family members better and spending quality time my family.

Styles of decision-making:

1) Socio-orientated communication – favour adherence to conventional norms of authority and preservation of the domestic status quo

2) Concept-orientated communication – egalitarian and favours a flow of information between all household members

3) Conflict management strategies – conflict-avoidance or conflict-resolution techniques that may affect decision making, purchase decisions, and satisfaction

The styles of decision making we adopt is 2) concept-oriented communication. Our children play influencing roles in democratic and permissive household. We discuss together what our children like, the communication evolves an egalitarian approach and we prefer our children to make constructive comments and views of the product they like and dislike. This promotes a healthy and valuable interaction between parents and children. Secondly, children have a step ahead in making views appropriate and wise decision in choices. As for couples, like us, concept oriented communication is the most appropriate for us. We discuss what is best and appropriate for us. Our main goal is to keep our marriage going and also for our children future, this concept-oriented communication is one of the concrete paths to reach our goal.

Issues of decision-making:

1) Role specialisation

Helps households cope simultaneously with individual interest and potential disagreements in purchase and consumption decisions

2) Role Overload

Situation in which competing demands on the consumer’s time and energy become overwhelming

3) Gender-role orientation

Behaviour standards and cultural norms that define appropriate behaviour for men and women in their society

In any household decision making, there are bound to be issues relating to decision making. Sometimes, I do face simultaneously with individual interest from my children and potential disagreements with my wife in purchase and consumption decisions. In this case, 1) role specialisation is the solution. Role specialisation denotes that in certain product or service domains, household members agree that they may make autonomic decision without consulting other household members.

For example, my three children preferred to have their desired brand of ice cream, (Hagen Daas, Ben and Jerry, Baskin Robins). It is unwise to buy all three types of ice cream and it will be a waste of money if we are unable to consume all in a week’s time. For this case, my children and I agree to let my wife make the decision without consulting other household members. She will buy Hagen Daas for this week; Ben and Jerry for next week and subsequent week will be Baskin Robins.

Another issue is inadequate time and energy. Due to work commitments, I may to work overtime till late hours. This is 2) role overload. For this instance, I have to pass the purchase decisions to my wife.

Being in an egalitarian gender role orientation society, we respect each other decision making. Our family shared these primary goals of to concern affiliation, security and trust. In maintaining long-term relationship, solutions are fair and unbiased. We uses “second choice” solution. If household member cannot agree on the first choice, we may settle for each other’s second choice. The underlying logic is that our family chooses the product alternative that perturbs individual preferences the least.