[MUSIC] In this lecture, we will talk about how consumers make purchasing decisions and try to understand what goes in their heads in the different stages of the purchasing decision. Consumer decision making process consists of five steps, Need Recognition, Information Seeking, Evaluation of Alternatives, Purchase Decision, and Post-Purchase Evaluation. The first step involves the consumer who recognizes that he or she needs something. Need recognition is the most important step in the buying process, because if there is no need, there is no purchase. Recognition occurs when there's a gap between the consumers actual situation and the ideal or desired situation. Need is a trigger of the buying decision. It can be a physical need or want, such as thirst or hunger. Or a consumer may just run out of stock for some specific product. This can be as simple as an empty vinegar bottle. He or she might be unsatisfied with the performance of the products, so looking for an alternative. Consumers may just become aware of a product that is better the one that he or she consumes. I would like to show you two ads. That intend to establish the need to indulge dogs with treats in a fun way. This ad is actually pointing out the fact that your dog needs or deserves a treat because his life is not always very easy. Please take a look at it. And here is another version of the same ad. Once a need or want is identified, consumers move to the next stage of the process, information search. Consumers start seeking information about the possible solutions to satisfy the need. They might rely on the information stored in the memory. This is called the internal information. This kind of information is already present in our memory and it comes from previous experiences we had with the product. Internal information is usually sufficient for the purchasing of everyday products. If the brand met our needs in the past, if the experience was good it's very likely that we will buy the same brand again. With internal search, brand awareness and brand equity are very important. If a consumer is not aware of a brand then a brand will not be considered as a purchase option unless the consumer makes some external search and finds out about it. When we feel like we do not have enough information we look for other sources. This is called external information. External information on the product or a brand is received first from friends or family. Then we rely on reviews from other consumers and from the press. And of course we'll look at the official business sources such as in advertisement. We usually do external search when we are not happy with the last purchase experience and we want to try another brand or product. When it is a high involvement, in other words, an important decision product, then we might feel like we need more information. Additionally, when we would like to purchase a socially visible product such as a car. We may want to make sure that people approve or be impressed with our purchase decision. Please be aware that during the decision making process, consumers usually pay more intention to the internal information and the information that they can get from friends and family or other consumers. It is because such information is judged more objective than an advertising or a commercial brochure of the product. By gathering information, consumers learn about competing brands and features. Let's say we would like to purchase a computer. The first box in the visual shows the total set of brands available. We would be aware of only a subset of these. And this subset is called the awareness set. Only some of the alternatives within the awareness set, will meet our initial buying criteria, and will be included into the consideration set. As we gather more information, and weigh the importance of different criteria, importance of different features that are important for our decision, just a few options remain, and form the choice set. Finally, we make our final selection from this choice set. If marketers can successfully identify the hierarchy and importance of product attributes that affect consumer decision-making. They may emphasize such attributes and influence how consumers form these subsets. Once they made the decision to buy a specific product, the purchase step begins. This step requires many additional decisions, such as from whom we'll buy the product. From a brick and mortar retailer or from an online retailer? How many items do we buy? One or maybe more than one if there's a discount. When will we buy? Will we wait for the sales period? And, how we will pay? With cash, check, credit or financing? So many factors within these decisions may intervene between the moment we decide on a specific product and the moment we actually purchase it. Quality of the shopping experience, availability of a promotion, convenient financing options, might all influence the decision. For example, we may enter a car dealer to purchase a specific model but may change our mind in line with the sales person's recommendations. We may get overwhelmed with different financing options and walk out of the store. Brands need to anticipate such barriers to purchase. I minimize them as much as possible. Additionally, I have already mentioned to you that in the information seeking step that consumers gather information from their families and friends, hence they might influence... These people's families and friends might influence the purchase decision even after we have decided on a specific product. For example, usually moms buy cereals for their kids, right? So please take a look at this ads now. Do you think mothers are the sole decision makers? All these ads, aside from sharing some nutritious factors for the concern of the mothers, are actually designed to appeal to the kids. Because kids might actually influence their mother's decision on which cereal to purchase. Marketers should identify the potential influencers for specific purchases and try to address appropriate messages to them as well once the product is purchased and used. Marketers should also try to manage the post purchase process. Consumers will evaluate whether they have made the right choice or not at this stage. They will feel either a sense of satisfaction or disappointment. How they will feel will influence their future decisions and buying behavior. A satisfied consumer is more likely to purchase the product again and say good things about it. Dissatisfied consumers may return the product and take public action by complaining to the company or complaining directly to many others online. In this lecture we talked about the consumer decision making process. In the next lecture we will elaborate on how advertising affects consumer decision making. [MUSIC]
