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describe the problem solving approach to consumer decision making

consumer decision making process

Definition and examples of the consumer decision-making process

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What is the consumer decision making process

The consumer decision-making process involves five basic steps. This is the process by which consumers evaluate making a purchasing decision. The 5 steps are problem recognition, information search, alternatives evaluation, purchase decision and post-purchase evaluation.

5 steps of the consumer decision making process

The consumer decision-making process can seem mysterious, but all consumers go through basic steps when making a purchase to determine what products and services will best fit their needs.

Think about your own thought process when buying something—especially when it’s something big, like a car. You consider what you need, research, and compare your options before making the decision to buy. Afterward, you often wonder if you made the right call.

If you work in sales or marketing, make more of an impact by putting yourself in the customer’s shoes and reviewing the steps in the consumer decision-making process.

Steps in the consumer decision process

Generally speaking, the consumer decision-making process involves five basic steps.

1. Problem recognition

The first step of the consumer decision-making process is recognizing the need for a service or product. Need recognition, whether prompted internally or externally, results in the same response: a want. Once consumers recognize a want, they need to gather information to understand how they can fulfill that want, which leads to step two.

But how can you influence consumers at this stage? Since internal stimulus comes from within and includes basic impulses like hunger or a change in lifestyle, focus your sales and marketing efforts on external stimulus.

Develop a comprehensive brand campaign to build brand awareness and recognition––you want consumers to know you and trust you. Most importantly, you want them to feel like they have a problem only you can solve.

Example: Winter is coming. This particular customer has several light jackets, but she’ll need a heavy-duty winter coat if she’s going to survive the snow and lower temperatures.

2. Information search

content map with funnel b2c example

When researching their options, consumers again rely on internal and external factors, as well as past interactions with a product or brand, both positive and negative. In the information stage, they may browse through options at a physical location or consult online resources, such as Google or customer reviews.

Your job as a brand is to give the potential customer access to the information they want, with the hopes that they decide to purchase your product or service. Create a funnel and plan out the types of content that people will need. Present yourself as a trustworthy source of knowledge and information.

Another important strategy is word of mouth—since consumers trust each other more than they do businesses, make sure to include consumer-generated content, like customer reviews or video testimonials, on your website.

Example: The customer searches “women’s winter coats” on Google to see what options are out there. When she sees someone with a cute coat, she asks them where they bought it and what they think of that brand.

3. Alternatives evaluation

At this point in the consumer decision-making process, prospective buyers have developed criteria for what they want in a product. Now they weigh their prospective choices against comparable alternatives.

Alternatives may present themselves in the form of lower prices, additional product benefits, product availability, or something as personal as color or style options. Your marketing material should be geared towards convincing consumers that your product is superior to other alternatives. Be ready to overcome objections —e.g., in sales calls, know your competitors so you can answer questions and compare benefits.

Example: The customer compares a few brands that she likes. She knows that she wants a brightly colored coat that will complement the rest of her wardrobe, and though she would rather spend less money, she also wants to find a coat made from sustainable materials.

4. Purchase decision

This is the moment the consumer has been waiting for: the purchase. Once they have gathered all the facts, including feedback from previous customers, consumers should arrive at a logical conclusion on the product or service to purchase.

If you’ve done your job correctly, the consumer will recognize that your product is the best option and decide to purchase it.

Example: The customer finds a pink winter coat that’s on sale for 20% off. After confirming that the brand uses sustainable materials and asking friends for their feedback, she orders the coat online.

5. Post-purchase evaluation

This part of the consumer decision-making process involves reflection from both the consumer and the seller. As a seller, you should try to gauge the following:

Remember, it’s your job to ensure your customer continues to have a positive experience with your product. Post-purchase engagement could include follow-up emails, discount coupons, and newsletters to entice the customer to make an additional purchase. You want to gain life-long customers, and in an age where anyone can leave an online review, it’s more important than ever to keep customers happy.

Tools to better understand your customer

Putting yourself in the customer’s shoes can help you steer consumers towards your product. Here are some tools to help you analyze their decision-making process and refine your brand marketing and sales tactics.

Customer journey map

A customer journey map visualizes a hypothetical customer’s actions. Use it to empathize with your customers as they go through a specific process or try to complete a purchase. Map out the actions the customer is likely to take.

Learn how to make a customer journey map to understand the decision-making process for your product/service.

customer journey map example

Empathy map

Empathy maps help teams understand the customer’s mindset when dealing with a product or service. They can be used for personas or specific customer types. Empathy mapping is often most helpful at the beginning of a new project. Collaborate as a team to quickly get inside the heads of your customers during every step of product development, testing, and release.

Learn how empathy maps work so you can understand your customers better and make customer-oriented decisions .

basic empathy map example

User personas

Based on user research or past user interactions, user persona cards construct fictional or composite personas that break down and organize your data into distinctive types of users. Build a more human picture of your users and understand your user base better by creating user personas for the various types of users for your product or service.

user persona card example

Understanding the consumer decision-making process is key if you want to attract more customers and get them to make that crucial purchase. Use this process and the tools above to tune in to consumers and genuinely understand how to reach them.

describe the problem solving approach to consumer decision making

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How to Make a Decision Tree in Excel

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Make Informed Decisions with the Marketing Research Process

marketing research process

Consumer Behavior - Decision Making

An understanding of consumer behavior is necessary for the long-term success and survival of a firm. Consumer decision making is viewed as the edifice of the marketing concept, an important orientation in marketing management.

Consumer Decision Making

The marketer should be able to determine needs and wants of the target segment and provide product and service offerings more effectively and efficiently than competitors.

Types of Consumer Decision Making

The following are the types of decision making methods which can be used to analyze consumer behavior −

Extensive Problem Solving

In extensive decision making, the consumers have no established or set criteria for evaluating a product in a particular category. Here the consumers have not narrowed the number of brands from which they would like to consider and so their decision making efforts can be classified as extensive problem solving. In this particular set of problem solving phase, the consumer needs a lot of information to set a criteria on the basis of specific brands could be judged.

Limited Problem Solving

In limited problem solving, the consumers have already set the basic criteria or standard for evaluating the products. However, they have not fully set the established preferences and they search for additional information to discriminate among other products or brands.

Routinized Response Behavior

Here, in routinized response behavior, consumers have experience with the product and they have set the criteria for which they tend to evaluate the brands they are considering. In some situations, they may want to collect a small amount of additional information, while in others they may simply review what they are aware about. In extensive problem solving, consumer seeks for more information to make a choice, in limited problem solving consumers have the basic idea or the criteria set for evaluation, whereas in routinized response behavior consumers need only little additional information.

Views of Consumer Decision Making

An economic view.

Consumers have generally been assumed to make rational decisions. The economic view of consumer decision making is being criticized by researchers because a consumer is assumed to posses the following traits to behave rationally −

Firstly, they need to be aware of all the alternatives present in the market

Secondly, they must be able to efficiently rank the products as per their benefits.

Lastly, they must also know the best alternative that suits them as per their requirements.

In the world of perfect competition, consumers rarely have all the information to make the so called ‘perfect decision.’

A Passive View

Passive view is totally opposite to the economic view. Here, it is assumed that consumers are impulsive and irrational while making a purchase. The main limitation of this view is that consumers also seek information about the alternatives available and make rational or wise decisions and purchase the products or services that provides the greatest satisfaction.

A Cognitive View

The cognitive model helps individuals to focus on the processes through which they can get information about selected brands. In the framework of cognitive view, the consumer very actively searches for such products or services that can fulfill all their requirements.

An Emotional View

Consumers are associated with deep feelings or emotions such as, fear, love, hope etc. These emotions are likely to be highly involving.

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Types of Consumer Decision - Explained

What types of decisions do Consumers Make?

Written by Jason Gordon

Updated at August 22nd, 2021

Table of Contents

What are the types of consumer decisions.

Consumer decisions can be categorized into three primary types:

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What is a Routinized Response?

This is the kind of decision where you don't really have to think much about it. That is, it's a routine. In the context of making a purchase, this is when we make the decision to purchase without going through the consumer decision-making process. Generally, it means we simply follow or repeat a previous course of action. Think of going to the store and buying the same type or brand of grocery item that you buy every week. You do this as a routine, rather than identifying alternatives and comparing them.

What is Limited Problem Solving?

This type of purchase decision involves a little more thinking or a little more consideration. Maybe we consider different products in making our purchase. Maybe we consider how much to buy. Whatever our considerations, we're going to spend more time and effort making this decision or making this purchase.

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Related articles.

Describe the level of involvement and types of consumer problem-solving processes. An individual’s level of involvement—the importance and intensity of his or her interest in a product in a particular situation—affects the type of problem-solving processes used. Enduring involvement is an ongoing interest in a product class because of personal relevance, whereas situational involvement is a temporary interest stemming from the particular circumstance or environment in which buyers find themselves. There are three kinds of consumer problem solving: routinized response behavior, limited problem solving, and extended problem solving. Consumers rely on routinized response behavior when buying frequently purchased low-cost items requiring little search and decision effort. Limited problem solving is used for products purchased occasionally or when buyers need to acquire information about an unfamiliar brand in a familiar product category. Consumers engage in extended problem solving when purchasing an unfamiliar, expensive, or infrequently bought product.

The consumer buying decision process includes five stages: problem recognition, information search, evaluation of alternatives, purchase, and postpurchase evaluation. Not all decision processes culminate in a purchase, nor do all consumer decisions include all five stages. Problem recognition occurs when buyers become aware of a difference between a desired state and an actual condition. After recognizing the problem or need, buyers search for information about products to help resolve the problem or satisfy the need. A successful search yields a group of brands, called a consideration set, that a buyer views as possible alternatives. To evaluate the product in the consideration set, the buyer establishes certain criteria by which to compare, rate, and rank different products. Marketers can influence consumers’ evaluation by framing alternatives. In the purchase stage, consumers select products or brands on the basis of results from the evaluation stage and other dimensions. Buyers also choose the seller from whom they will buy the product. After the purchase, buyers evaluate the product to determine if its actual performance meets expected levels.

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Individual Consumer Decision Making

29 Consumer Decision Making Process

An organization that wants to be successful must consider buyer behavior when developing the marketing mix. Buyer behavior is the actions people take with regard to buying and using products. Marketers must understand buyer behavior, such as how raising or lowering a price will affect the buyer’s perception of the product and therefore create a fluctuation in sales, or how a specific review on social media can create an entirely new direction for the marketing mix based on the comments (buyer behavior/input) of the target market.

The Consumer Decision Making Process

Once the process is started, a potential buyer can withdraw at any stage of making the actual purchase. The tendency for a person to go through all six stages is likely only in certain buying situations—a first time purchase of a product, for instance, or when buying high priced, long-lasting, infrequently purchased articles. This is referred to as complex decision making .

For many products, the purchasing behavior is a routine affair in which the aroused need is satisfied in a habitual manner by repurchasing the same brand. That is, past reinforcement in learning experiences leads directly to buying, and thus the second and third stages are bypassed. This is called simple decision making .

However, if something changes appreciably (price, product, availability, services), the buyer may re-enter the full decision process and consider alternative brands. Whether complex or simple, the first step is need identification (Assael, 1987).

A comparison between the "simple" and "complex" decision making process a consumer would experience depending on involvement and purchase.

When Inertia Takes Over

Need Recognition

Whether we act to resolve a particular problem depends upon two factors: (1) the magnitude of the discrepancy between what we have and what we need, and (2) the importance of the problem. A consumer may desire a new Cadillac and own a five-year-old Chevrolet. The discrepancy may be fairly large but relatively unimportant compared to the other problems they face. Conversely, an individual may own a car that is two years old and running very well. Yet, for various reasons, they may consider it extremely important to purchase a car this year. People must resolve these types of conflicts before they can proceed. Otherwise, the buying process for a given product stops at this point, probably in frustration.

Once the problem is recognized it must be defined in such a way that the consumer can actually initiate the action that will bring about a relevant problem solution. Note that, in many cases, problem recognition and problem definition occur simultaneously, such as a consumer running out of toothpaste. Consider the more complicated problem involved with status and image–how we want others to see us. For example, you may know that you are not satisfied with your appearance, but you may not be able to define it any more precisely than that. Consumers will not know where to begin solving their problem until the problem is adequately defined.

Marketers can become involved in the need recognition stage in three ways. First they need to know what problems consumers are facing in order to develop a marketing mix to help solve these problems. This requires that they measure problem recognition. Second, on occasion, marketers want to activate problem recognition. Public service announcements espousing the dangers of cigarette smoking is an example. Weekend and night shop hours are a response of retailers to the consumer problem of limited weekday shopping opportunities. This problem has become particularly important to families with two working adults. Finally, marketers can also shape the definition of the need or problem. If a consumer needs a new coat, do they define the problem as a need for inexpensive covering, a way to stay warm on the coldest days, a garment that will last several years, warm cover that will not attract odd looks from their peers, or an article of clothing that will express their personal sense of style? A salesperson or an ad may shape their answers

Information Search

After a need is recognized, the prospective consumer may seek information to help identify and evaluate alternative products, services, and outlets that will meet that need. Such information can come from family, friends, personal observation, or other sources, such as Consumer Reports, salespeople, or mass media. The promotional component of the marketers offering is aimed at providing information to assist the consumer in their problem solving process. In some cases, the consumer already has the needed information based on past purchasing and consumption experience. Bad experiences and lack of satisfaction can destroy repeat purchases. The consumer with a need for tires may look for information in the local newspaper or ask friends for recommendation. If they have bought tires before and was satisfied, they may go to the same dealer and buy the same brand.

Information search can also identify new needs. As a tire shopper looks for information, they may decide that the tires are not the real problem, that the need is for a new car. At this point, the perceived need may change triggering a new informational search. Information search involves mental as well as the physical activities that consumers must perform in order to make decisions and accomplish desired goals in the marketplace. It takes time, energy, money, and can often involve foregoing more desirable activities. The benefits of information search, however, can outweigh the costs. For example, engaging in a thorough information search may save money, improve quality of selection, or reduce risks. The Internet is a valuable information source.

Evaluation of Alternatives

After information is secured and processed, alternative products, services, and outlets are identified as viable options. The consumer evaluates these alternatives , and, if financially and psychologically able, makes a choice. The criteria used in evaluation varies from consumer to consumer just as the needs and information sources vary. One consumer may consider price most important while another puts more weight (importance) upon quality or convenience.

Using the ‘Rule of Thumb’

Consumers don’t have the time or desire to ponder endlessly about every purchase! Fortunately for us, heuristics , also described as shortcuts or mental “rules of thumb”, help us make decisions quickly and painlessly. Heuristics are especially important to draw on when we are faced with choosing among products in a category where we don’t see huge differences or if the outcome isn’t ‘do or die’.

Heuristics are helpful sets of rules that simplify the decision-making process by making it quick and easy for consumers.

Common Heuristics in Consumer Decision Making

The search for alternatives and the methods used in the search are influenced by such factors as: (a) time and money costs; (b) how much information the consumer already has; (c) the amount of the perceived risk if a wrong selection is made; and (d) the consumer’s predisposition toward particular choices as influenced by the attitude of the individual toward choice behaviour. That is, there are individuals who find the selection process to be difficult and disturbing. For these people there is a tendency to keep the number of alternatives to a minimum, even if they have not gone through an extensive information search to find that their alternatives appear to be the very best. On the other hand, there are individuals who feel it necessary to collect a long list of alternatives. This tendency can appreciably slow down the decision-making function.

Consumer Evaluations Made Easier

The evaluation of alternatives often involves consumers drawing on their evoke, inept, and insert sets to help them in the decision making process.

The brands and products that consumers compare—their evoked set – represent the alternatives being considered by consumers during the problem-solving process. Sometimes known as a “consideration” set, the evoked set tends to be small relative to the total number of options available. When a consumer commits significant time to the comparative process and reviews price, warranties, terms and condition of sale and other features it is said that they are involved in extended problem solving. Unlike routine problem solving, extended or extensive problem solving comprises external research and the evaluation of alternatives. Whereas, routine problem solving is low-involvement, inexpensive, and has limited risk if purchased, extended problem solving justifies the additional effort with a high-priced or scarce product, service, or benefit (e.g., the purchase of a car). Likewise, consumers use extensive problem solving for infrequently purchased, expensive, high-risk, or new goods or services.

As opposed to the evoked set, a consumer’s inept set represent those brands that they would not given any consideration too. For a consumer who is shopping around for an electric vehicle, for example, they would not even remotely consider gas-guzzling vehicles like large SUVs.

The inert set represents those brands or products a consumer is aware of, but is indifferent to and doesn’t consider them either desirable or relevant enough to be among the evoke set. Marketers have an opportunity here to position their brands appropriately so consumers move these items from their insert to evoke set when evaluation alternatives.

The selection of an alternative, in many cases, will require additional evaluation. For example, a consumer may select a favorite brand and go to a convenient outlet to make a purchase. Upon arrival at the dealer, the consumer finds that the desired brand is out-of-stock. At this point, additional evaluation is needed to decide whether to wait until the product comes in, accept a substitute, or go to another outlet. The selection and evaluation phases of consumer problem solving are closely related and often run sequentially, with outlet selection influencing product evaluation, or product selection influencing outlet evaluation.

While many consumers would agree that choice is a good thing, there is such a thing as “too much choice” that inhibits the consumer decision making process. Consumer hyperchoice is a term used to describe purchasing situations that involve an excess of choice thus making selection for difficult for consumers. Dr. Sheena Iyengar studies consumer choice and collects data that supports the concept of consumer hyperchoice. In one of her studies, she put out jars of jam in a grocery store for shoppers to sample, with the intention to influence purchases. Dr. Iyengar discovered that when a fewer number of jam samples were provided to shoppers, more purchases were made. But when a large number of jam samples were set out, fewer purchases were made (Green, 2010). As it turns out, “more is less” when it comes to the selection process.

The Purchase Decision

After much searching and evaluating, or perhaps very little, consumers at some point have to decide whether they are going to buy.

Anything marketers can do to simplify purchasing will be attractive to buyers. This may include minimal clicks to online checkout; short wait times in line; and simplified payment options. When it comes to advertising marketers could also suggest the best size for a particular use, or the right wine to drink with a particular food. Sometimes several decision situations can be combined and marketed as one package. For example, travel agents often package travel tours with flight and hotel reservations.

To do a better marketing job at this stage of the buying process, a seller needs to know answers to many questions about consumers’ shopping behaviour. For instance, how much effort is the consumer willing to spend in shopping for the product? What factors influence when the consumer will actually purchase? Are there any conditions that would prohibit or delay purchase? Providing basic product, price, and location information through labels, advertising, personal selling, and public relations is an obvious starting point. Product sampling, coupons, and rebates may also provide an extra incentive to buy.

Actually determining how a consumer goes through the decision-making process is a difficult research task.

Post-Purchase Behaviour

All the behaviour determinants and the steps of the buying process up to this point are operative before or during the time a purchase is made. However, a consumer’s feelings and evaluations after the sale are also significant to a marketer, because they can influence repeat sales and also influence what the customer tells others about the product or brand.

Keeping the customer happy is what marketing is all about. Nevertheless, consumers typically experience some post-purchase anxiety after all but the most routine and inexpensive purchases. This anxiety reflects a phenomenon called cognitive dissonance . According to this theory, people strive for consistency among their cognitions (knowledge, attitudes, beliefs, values). When there are inconsistencies, dissonance exists, which people will try to eliminate. In some cases, the consumer makes the decision to buy a particular brand already aware of dissonant elements. In other instances, dissonance is aroused by disturbing information that is received after the purchase. The marketer may take specific steps to reduce post-purchase dissonance. Advertising that stresses the many positive attributes or confirms the popularity of the product can be helpful. Providing personal reinforcement has proven effective with big-ticket items such as automobiles and major appliances. Salespeople in these areas may send cards or may even make personal calls in order to reassure customers about their purchase.

Media Attributions

The graphic of the “Consumer Decision Making Process” by Niosi, A. (2021) is licensed under CC BY-NC-SA and is adapted from Introduction to Business by Rice University.

Text Attributions

Assael, H. (1987). Consumer Behavior and Marketing Action (3rd ed.), 84. Boston: Kent Publishing.

Green, P. (2010, March 17). An Expert on Choice Chooses. The New York Times. https://www.nytimes.com/2010/03/18/garden/18choice.html.

Consumer purchases made when a (new) need is identified and a consumer engages in a more rigorous evaluation, research, and alternative assessment process before satisfying the unmet need.

Consumer purchases made when a need is identified and a habitual ("routine") purchase is made to satisfy that need.

Purchasing decisions made out of habit.

The first stage of the Consumer Decision Making Process, need recognition takes place when a consumer identifies an unmet need.

The second stage of the Consumer Decision Making Process, information search takes place when a consumer seeks relative information that will help them identify and evaluate alternatives before deciding on the final purchase decision.

The third stage of the Consumer Decision Making Process, the evaluation of alternatives takes place when a consumer establishes criteria to evaluate the most viable purchasing option.

Also known as "mental shortcuts" or "rules of thumb", heuristics help consumers by simplifying the decision-making process.

A small set of "go-to" brands that consumers will consider as they evaluate the alternatives available to them before making a purchasing decision.

The brands a consumer would not pay any attention to during the evaluation of alternatives process.

The brands a consumer is aware of but indifferent to, when evaluating alternatives in the consumer decision making process. The consumer may deem these brands irrelevant and will therefore exclude them from any extensive evaluation or consideration.

A term that describes a purchasing situation in which a consumer is faced with an excess of choice that makes decision making difficult or nearly impossible.

A type of cognitive inconsistency, this term describes the discomfort consumers may feel when their beliefs, values, attitudes, or perceptions are inconsistent or contradictory to their original belief or understanding. Consumers with cognitive dissonance related to a purchasing decision will often seek to resolve this internal turmoil they are experiencing by returning the product or finding a way to justify it and minimizing their sense of buyer's remorse.

Introduction to Consumer Behaviour by Andrea Niosi is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License , except where otherwise noted.

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Featured case study

Understanding the Consumer Decision Making Process

There are many opportunities to influence shoppers while they’re considering a purchase.

Many people think that the most important stage in a sale is when a customer hands over the money. But actually, when it comes to how to influence consumer behavior, every single step in the consumer decision-making process plays an important role. For businesses to maximize profit, it’s imperative that they pay attention to every stage in the buying process.

Consumers don’t just decide to buy. Their buying behavior is determined by many different factors. And too many businesses focus on optimizing certain steps — improving checkout, acquiring customers through SEO or PPC, etc. — without looking at the big picture.

But before you can start optimizing or using strategies like UGC to support the buyer journey, you have to understand each and every stage. Here’s what you need to know about the decision making process for shoppers.

What Is the Consumer Decision Making Process?

The consumer decision making process is the process by which consumers become aware of and identify their needs; collect information on how to best solve these needs; evaluate alternative available options; make a purchasing decision; and evaluate their purchase.

Understanding the consumer decision making process is important to any business, but eCommerce businesses have a unique opportunity to optimize it. Because online shoppers generate so much more data than those in brick-and-mortar stores, online retailers can use that data to implement conversion strategies for every stage of the process.

The 5 Stages of the Consumer Decision Making Process — And How to Optimize

It’s important to note that the consumer decision making process has many different names, including but not limited to the buyer journey, buying cycle, buyer funnel, and consumer purchase decision process. But all the names essentially refer to the same thing: The journey a customer goes through when making a purchase.

So, here’s a breakdown of what happens in each step:

Now, to show you how these stages of the buying decision process play out in real life, here are consumer buying process examples that outline each of the steps and ways for your eCommerce brand to maximize results during each stage.

1. Need recognition (awareness)

The need recognition stage of the consumer decision making process starts when a consumer realizes a need. Needs come about because of two reasons:

Even if the core cause is vanity or convenience, at the most basic level, almost all purchases are driven by real or perceived physiological or emotional needs. The causes for these stimuli can be social (wanting to look cool and well dressed) or functional (needing a better computer to do work more effectively), but they speak to the same basic drivers.

We buy groceries because without food in the house, we’ll be hungry. We buy new clothes because we’ll be cold, or we feel like everyone else has the latest handbag of the season, and we don’t want to be left out.

Example: Looking for a new camera

Think about it: Why does someone start looking for a new camera? Likely, their old camera isn’t working well anymore, or they simply want a nicer camera. Maybe they have a vacation coming up. Or maybe they want to give the camera as a present to their sister, who just had her first child.

How in the world is this related to a physiological need? Simple. Without a camera, they won’t be able to document special moments; therefore, they have an emotional desire to save these moments so that they are happy and not sad.

This emotional desire is the internal stimuli in this situation. Sure, a camera isn’t a life necessity keeping them from surviving, but it does solve a core emotional need.

What happens after someone identifies a need? They begin looking for a solution! Which brings us to the next step in the customer journey: searching for information.

2. Search for information (research)

As soon as a consumer recognizes a need and begins to search for an answer, you must be there to help! And where do consumers generally go to look for answers today? Google!

Example: Researching cameras

Now that the customer has realized a need to get a new camera, it’s time to find solutions to his problem. In this stage, it’s imperative that you are visible to the consumer searching for an answer.

Here are some things a consumer may be searching for:

The amount of information a customer needs to search for depends on how much he already knows about the solutions available, as well as the complexity of choices. For example, let’s say there’s someone looking for a camera as a gift, and he has no idea which type of camera he wants, or what features he needs.

He will need more information than someone who already knows exactly the type of camera he wants to buy, but just needs to find the right product and the right way to purchase it.

The amount of searching necessary is entirely dependent on the situation, and it can vary widely.

So how do customers search for information? By using internal information (their previous knowledge of a product or brand) as well as external information (information about a product or brand from friends or family, reviews, endorsements, press reviews, etc.).

The biggest way you can optimize your online business during the need recognition and awareness stage is by making sure you show up in search results — and that what the consumer sees makes an impression.

Strategies to optimize during the research stage

First, make sure you’re optimizing your eCommerce storefront to rank for the keywords that matter to your brand. For a complete guide on eCommerce SEO , check out our guide here .

Once you know how to strategize your SEO, you’ll want to make sure your results are well optimized to convert. User-generated reviews can help you to build brand awareness during the research stage. In fact, it’s one of the most effective ways to do it.

Reviews can help your store get seen in search results by increasing the likelihood of your store showing up for long-tail keywords. Reviews improve SEO because they give your online business a steady source of keyword rich, relevant content.

So when someone opens up their laptop and starts searching for a new camera, reviews will help you be there:

describe the problem solving approach to consumer decision making

Online businesses that use reviews see an increase in search traffic. You can leverage reviews in Google Rich Snippets and Product Listing Ads so that if a customer searches in Google, you’ve added credibility to your listing. Businesses that show reviews in their search results stand out from the competition!

Rich snippets help you during the consumer decision making process

3. Evaluation of alternatives (consideration)

Now that the consumer has done research, it’s time to evaluate their choices and see if there are any promising alternatives. During this phase, shoppers are aware of your brand and have been brought to your site to consider whether to purchase from you or a competitor.

Consumers make purchase decisions based on which available options best match their needs, and to minimize the risk of investing poorly, they will make sure there are no better options for them.

Their evaluation is influenced by two major characteristics:

Example: Comparison shopping for a camera

If you’re a camera seller or brand, your goal in the consideration stage is to convince customers your camera is the best choice. And the most effective way to do that is to keep them on your site longer and find ways to earn their trust.

Consumers will first weigh the objective characteristics of your camera. Does it have all the features I want? Is it easy to use? Is it in my budget? Then, the subjective consideration will kick in: Do other people think it has all the features it should? Has anyone else who bought it expressed any difficulty with learning how to use it? Is it generally considered a good value for the money?

You only have one shot – so you need to make the most of it. Of course, it’s important that your site is informative, your prices are competitive, your value is clear, etc. But if you’re identical to a competitor in every single way, the word of previous customers is what will set you apart.

Strategies for optimizing in the consideration stage

In this stage, use reviews and user-generated content examples on your site to increase engagement and boost customer trust .

The first place you need to have reviews is on your home page, so as soon as customers land on your site, they see content from past buyers. You also need to display reviews on your product pages, so customers looking for information can see trustworthy input from past buyers.

Reviews on product pages improve conversion

Additionally, using reviews in a home page carousel reduces bounce rate while increasing time spent on site and page views. That boost in engagement increases the likelihood that customers will learn more about your store and leave your site with a positive memory of your brand.

Reviews also help kick start the navigation to other product pages. Make sure to get reviews on a wide variety of products in order to increase click throughs from category pages into product pages.

Also, community questions and answers are another powerful type of user-generated content that can help answer shoppers’ questions so that they have no reason not to buy from you.

Community Q&A helps boost engagement during the consideration stage.

4. Purchasing decision (conversion)

Alright, now it’s money time. This is the stage when customers are ready to buy, have decided where and what they want to buy, and are ready to pull out their credit cards.

But wait! Not so fast. You can still lose a customer at this stage. This is the stage when the purchasing experience is key – it’s imperative to make it as easy as possible.

Example: Abandoning checkout for a camera

Let’s say your potential customer has gotten to the checkout stage of his purchase, and has second thoughts: What if the recipient wants a different camera? What if this camera is missing a key feature that the recipient would want? How difficult will it be for the recipient to return the camera if it doesn’t meet their needs?

This shopper will likely abandon his cart, and go back to the research stage. Maybe he’ll end up back on your site, but maybe he won’t. Your goal at this stage is to get him to complete the purchase now , so you don’t lose him forever.

Strategies for optimizing in the conversion stage

Many businesses choose to display reviews on checkout pages. This can be effective if done correctly. You need to focus on building trust, but don’t distract the customer from completing the purchase.

If you want to display user-generated content during checkout, use site reviews rather than customer photos or product reviews, and make sure they aren’t clickable. You want to focus on building trust and not distracting.

5. Post-purchase evaluation (re-purchase)

In this stage of the consumer purchase decision process, consumers reflect on their recent purchase. They think about how they feel about it, if it was a good investment, and most importantly, if they will return to the brand for future purchases and recommend the brand to friends and family.

In this stage, you need to have a post-purchase strategy to increase the likelihood that customers will engage with your brand again in the future. Return customers account for 1/3 of a store’s total income on average, so make sure you’re not missing out on this super valuable opportunity to increase your eCommerce conversion rate by turning shoppers into repeat buyers.

Example: Getting feedback and encouraging repeat purchases

In the camera example, the customer has already bought from your brand and they’re evaluating their purchase. This is usually when they will leave a review about their experience. This is also when they are at their most engaged with your brand, and they can be susceptible to strategies that encourage long term engagement.

At this stage, you want to ensure that customers buy again, and you want to encourage them to leave UGC that helps other buyers in the future.

While your customer might take it upon themselves to leave a review, they’re far more likely to do so if you request one. Asking customers for reviews about their experience in a post-purchase email not only gives you insight into your performance, but it also gives you valuable user-generated content to leverage to attract future customers.

It’s important to remember that customers have already given you something very valuable: their money! So you don’t want to ask for too much when requesting feedback. In order to encourage customers to write reviews , make it as easy as possible for customers to leave feedback:

Ask for reviews after purchase to increase customer retention.

You can also use this email to cross-sell other items. Data from over 2,000 stores shows that 27.5% of customers who see promoted products in post-purchase review request emails end up converting – and these customers are valuable.

Coupons help bring back customers during post-purchase evaluation.

After purchase, it’s also a good opportunity to promote your loyalty program . Customers in loyalty programs consistently provide a higher lifetime value than those who aren’t because the programs are designed to incentivize purchases.

What Is the Importance of Pricing in the Consumer Buying Process?

One common question that eCommerce brands will ask is how consumers factor price into their buying decisions. When consumers are evaluating a product, price is of course a huge factor. But it’s not just about the product price — it’s about the entire cost of the purchase.

Let’s say your cameras are a good value for the money, competitively priced, and have decent reviews. What happens when your customers get to checkout, and see that you have a high shipping cost? Instead of completing the purchase, they are going to see what the shipping cost is on the other cameras they were considering. And what if one of them offers free shipping? You may lose that customer.

You don’t want shoppers to be surprised by any additional costs when they get to checkout. Make sure to calculate taxes and shipping costs before they get to the final step. The more transparent you can be about your pricing up front, the more likely you’ll be to complete the sale.

If you want to turn a potential customer into a loyal brand advocate, it’s important to build trust and keep them engaged at every step of the process. User-generated content is a powerful tool for building brand awareness, highlighting the best things about your products, and ultimately, growing your bottom line.

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Four Modes of Consumer Decision Making

Four Modes of Consumer Decision Making

Extended problem solving

Extended problem solving customer decision – making mode relates to a situation where customers lack experience in a specific consumption setting, nevertheless, the setting is perceived by them as a highly involving. The products are usually of a high value and they also contribute to an individual’s social status, however, their purchase is often associated with significant amount of risk in terms of making improper purchase decision. Purchasing the first car or the first house can be mentioned as instances for extended problem solving.

Limited problem solving

Customer decision – making mode of limited problem solving , relates to a situation where both, customer experience, as well as, the level of their involvement are low. Considered to be the most common mode of decision – making, it lacks systematic approach in terms of decision – making. Examples for this mode of decision – making might include searching for and purchasing products and services associated with pest control within private properties.

In other words, as Perrey and Spillecke (2011) confirm, limited problem – solving customer decision – making mode relate to situations where customers are attempting to find appropriate solutions to their unpleasant issues. Retailers often attempt to attract such type of customers by employing a range of marketing techniques that include introducing discount vouchers, offering free samples etc.

Habit or variety seeking

Habit or variety seeking is the customer decision – making mode where a decision is not involving, however, there are high amount of repeated purchases from a specific brand. For example, the purchase of a specific brand of a dishwasher gel can be repeated over a long period of time in a habitual manner, without re-considering the value associated with the brand even when there are more valuable alternatives have emerged in the market.

Variety seeking relates to instances where customer moves to another brand within a given product category. At the same time, interestingly, “from one purchase occasion to the next, the individual will switch brands from within this set, just for the sake of variety” (O’Guinn et al, 2011, p.175).

Brand loyalty

Customers with a decision – making mode of brand loyalty practice high level of involvement in decision – making and they also possess high level of experience with a particular brand. Instances of brand loyalty customer decision – making mode include using specific brand of cigarettes for a long period of time.

According to Cant et al (2009), factors effecting customer brand loyalty in retail setting include brand name, the quality of products and services, price and style of products, environment of the store, the level and nature of promotion offered, and the quality of customer services provided. Considerable amount of financial resources are usually invested by leading retailers in order to enhance their brand image and therefore increase their long-term growth prospects.

The science behind what we buy.

Consumer Decision Making

describe the problem solving approach to consumer decision making

This or That?

Understanding the consumer decision making process is key to identifying marketing challenges and opportunities. it’s important to align marketing efforts with the steps customers undertake to decide what to buy. this is true both for b2c and b2b products and services. you can have the most compelling ad or point-of-sales collateral, but it will go to waste if the information isn’t available where and when the customer is ready to process it. consumers are complicated, marketers traditionally look at the consumer decision making process in terms of five steps that start with a problem-solving task and end with a decision. this perspective actually dates back to 1910, when john dewey proposed a sequential approach to decision making in general. these steps were integrated into the seminal howard-sheth model of buyer behavior in 1969, and this model has been the foundation for traditional thinking about consumer decision making since that time. , the model describes five steps of consumer decision making: , step 1. problem recognition, ford’s plan to promote its fusion hybrid model focused on people who aren’t thinking about buying a new car—at least not right now. its tv commercials target what the auto industry terms the “upper funnel,” or potential buyers down the road., problem recognition occurs at what ford calls the upper funnel, when we experience a significant difference between our current state of affairs and some state we desire. a person who unexpectedly runs out of gas on the highway has a problem, as does the person who becomes dissatisfied with the image of his car, even though there is nothing mechanically wrong with it., step 2. information search, this is the process by which we survey the environment for appropriate data to make a reasonable decision. as a general rule, we search more when the purchase is important, when we have more of a need to learn more about the purchase, or when it’s easy to obtain the relevant information. obviously, this stage of the process generates billions of dollars for google and other tech companies that specialize in providing answers to consumers’ queries about product choices., step 3. evaluate alternatives, much of the effort we put into a purchase decision occurs at the stage where we must actually choose a product from several alternatives. this may not be easy; modern consumer society abounds with choices. in some cases, there may be literally hundreds of different brands (as in cigarettes) or different variations of the same brand (as in shades of lipstick)., we call the alternatives a consumer seriously contemplates the consideration set., one important change as a result of social media usage is that the number of brands in the consideration set may actually expand rather than narrow as consumers seek information and shop a category. mckinsey ’s research shows that the number of brands added in later stages differs by industry; e.g. people actively evaluating personal computers added an average of 1 brand to their initial-consideration set of 1.7, while automobile shoppers added 2.2 to their initial set of 3.8., step 4: product choice , once we assemble and evaluate the relevant options in a category, eventually we have to choose one. our job isn’t getting any easier as companies overwhelm us with more and more features. we deal with 50-button remote controls, digital cameras with hundreds of mysterious features and book-length manuals, and cars with dashboard systems worthy of the space shuttle. experts call this spiral of complexity feature creep ., step 5: postpurchase evaluation , as the old saying goes, “the proof of the pudding is in the eating.” in other words, the true test of our decision-making process is whether we are happy with the choice we made after we undergo all these stages. postpurchase evaluation closes the loop; it occurs when we experience the product or service we selected and decide whether it meets (or maybe even exceeds) our expectations., this traditional perspective on the consumer decision making process actually only applies in limited cases, typically when the choice is very important or risky in some way. in contrast, habitual consumer decision making describes the choices we make with little or no conscious effort. many purchase decisions are so routine we may not realize we’ve made them until we look in our shopping carts in these situations, there are numerous heuristics (mental shortcuts) and environmental elements that drive the consumer decision making process (for example, the prominence of cues like colorful packages)., the notion that even subtle changes in a person’s environment can strongly influence the choices he or she makes has emerged on center stage in the study of consumer behavior in recent years. unlike standard economic theory that regards people as rational decision makers, the rapidly growing field of behavioral economics focuses on the effects of psychological and social factors on the economic decisions we make, and many of these choices are anything but “rational.”, indeed it turns out that it’s quite possible to modify the choices of individuals and groups merely by tinkering with the way we present information to them. this research holds enormous implications, especially for public policy issues because it turns out the way organizations frame their messages can exert a big influence on the numbers of consumers who will stop smoking, eat healthy foods, or save more money for retirement., much of the emerging work in behavioral economics focuses on the role of priming : cues in the environment that make us more likely to react in a certain way even though we’re unaware of these influences. in a field study in a wine store, researchers played either stereotypically french or german music on alternate days. on the days when french music was in the background, people bought more french versus german wine and the reverse happened on german music days. shoppers did not recognize that background music exerted any impact on their wine selections. another study asked european drivers to “opt out” of an organ donation program rather than to “opt in.” as a result of this simple “nudge,” participation increased from 20% to 95% of drivers., research on the consumer decision making process continues to reveal that there is no one set path on the road from problem recognition to product choice. indeed, increasingly we see that a simple, yet powerful, emotional response drives the decision – the rationalization for the choice only comes later. it’s essential to understand how important or risky a specific kind of purchase is, and work backwards to identify the dynamics of consumer decision making..

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Consumer Decision Making Process
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Consumer Decision making process

COMMENTS

Definition and Examples of the Consumer Decision-Making Process
Problem recognition: Recognizes the need for a service or product · Information search: Gathers information · Alternatives evaluation: Weighs choices against
Consumer Behavior
In extensive problem solving, consumer seeks for more information to make a choice, in limited problem solving consumers have the basic idea or the criteria set
Types of Consumer Decision
What is Limited Problem Solving? ... This type of purchase decision involves a little more thinking or a little more consideration. Maybe we
Foundations of Marketing
Limited problem solving is used for products purchased occasionally or when buyers need to acquire information about an unfamiliar brand in a familiar product
29. Consumer Decision Making Process
The promotional component of the marketers offering is aimed at providing information to assist the consumer in their problem solving process.
Understanding the Consumer Decision Making Process
What Is the Consumer Decision Making Process? The consumer decision making process is the process by which consumers become aware of and
Four Modes of Consumer Decision Making
Extended problem solving customer decision – making mode relates to a situation where customers lack experience in a specific consumption setting
Consumer Decision Making
Step 1. Problem recognition · Step 2. Information search · Step 3. Evaluate Alternatives · Step 4: Product Choice · Step 5: Postpurchase Evaluation.
Discuss the problem solving approach of consumer decision making
Customers make purchases because they have a need or a want that they want to be fulfilled. According to research, there are five key stages that determine
Consumer Decision Making
The extensive problem-solving method is an approach used by consumers when purchasing a product like a diamond or something of very high cost.