Literature Review
Theoretical Frameworks
5-Stage Consumer Decision-Making Process
Marketers have always sought to enter into the minds of the consumers in the bid to understand how they make the decision to purchase. Since the 1960s, scholars have defined models targeted at comprehending this complex phenomenon. Engel, Kollat, and Blackwell (1968) proposed a model for understanding the decision making founded on the view of a consumer as a rational decision maker. In the decision making model, the authors suggests a chronological (linear) process leading to a clear decision out of evaluation of alternatives. Engel et al. gave a summary of the decision-making model, suggesting that: “thought and evaluation precede the act of purchase and use because of the importance of making the right choice” (Engel et al., 1995, p. 156). The model proposed by Engel et al. (1968; 1995) is a 5-Stage consumer decision-making process.
Need Recognition. Engel et al., (1986) posited that it is not possible to have a purchase where the customer has not realized the need. Hibić and Poturak (2016) posited that the necessity can arise from a need that is not satisfied by a previous purchase or it might be an entirely new need that will be met by a new purchase. Establishing the needs of the customers is the foundation for an effective marketing strategy (Darley, Blankson, & Luethge, 2010). It is the basis for effective targeting of the customers.
Information Search. Once a need is recognized, a solution becomes critical. At this point, the customer will go out in search for and gathering the information to establish the solution that is more effective. The customer searches from the internal and external sources to situate the possible solutions. Internal information borrows from what is already known to the consumer about the product, while external information emanate from other sources (Engel et al., 1995). Skepticism plays out in the selection of the most effective solution indicating the criticality of adequate information prior to the decision to spend one’s money (Hibić & Poturak, 2016). Marketers, hence, should be prepared to provide the information in diverse sources, print, electronic media, or reviews from other customers. Yang (2004) indicates the growing importance of the internet as a source of information.
Evaluation of Alternatives. The market presents a number of alternatives to the consumer as potential for meeting the need. The process entails a search for the most appropriate solution through an evaluation of the available options. In the process of conducting of the evaluation, some factors that emerge in research include brand name, research and country of origin, although the factors differ in their impact on the decision. Engel et al. (1995) define “salience” as the difference in the impact of the diverse dimensions on the customer’s decision. With the right and adequate information, it is possible for the customer to make the decision on the one most suited to meet the needs (Engel et al., 1968; 1995). For example, when the brand is well known, it will be the basis for decision making. However, if the information about the product is not adequate, the price might be the determining factor.
Purchase Decision. Engel et al., (1968) aver that the evaluation of the alternatives lead the consumer to a particular purchase decision. The decision is based on what and where to make the purchase. The logical decision made by the customer is made after an assessment of the facts based on the needs and wants of the customer. However, Clow, and Baack (2005) suggest that a purchase decision does not always have to follow from the evaluation of the alternatives. A consumer might reach a store having made a decision to buy one brand, but leaves with a different product. Hence, the assessment is made based on the emotional connections/experiences with the product or the conviction based on advertising/marketing campaigns.
Post-Purchase Behavior. A product is expected by the marketer and the purchaser to meet the need identified at the beginning of the process. Clow and Baack (2005) elucidate that once the decision is made to purchase, the consumer might spend time evaluating the potential of the decision to be a good one. This is especially applicable to expensive and high value products. At this stage, an evaluation is carried out to establish the success of the product in meeting the need and expectations of the customer. Brand loyalty emanates from the potential of the product to meet or exceed the customer’s expectations (Hibić & Poturak, 2016). Brand ambassadors are born out of the potential for the product to meet the need.
General Consumer Decision-Making
Hall and Towers (2017) introduce a novel view of consumer behavior, even as the consumers move to the digital media in making their purchase decisions. Focusing on the Millennial, the researchers investigated the move to the digital media, especially in the search for information to make the decision on what to purchase and where. Bart and Keller (2016) introduce a new reality in the shift of consumer behavior as a function of the new media. The changes are also evident in the linear decision-making model that has been used for decades.
Need, Want, Desire. Marketing is basically founded on establishing the needs, wants or desires of the customers. While the three concepts differ, there is a logical progression between them. A need is basic, completely a necessity. A want is a feeling for something that is lacking. A desire is a craving for apprehending the want. Hibić and Poturak 2016) posit that understanding and differentiating these concepts is critical for marketers to understand the decision-making process and use the information for targeted marketing.
Information Gathering. Information search in the modern new media environment is a phenomenon that is increasingly being explored (Bart & Keller, 2016; Hall & Towers, 2017). In the journey to establish the best alternative to meet the needs of the customers, there is evidence of increasingly new channels that can be utilized. With a simple click of the mouse, the customer can get vast information, posted by the marketers and reviews from other consumers who have used the same product. Bart and Keller (2016) suggest the use of integrated marketing communication as the basis for availing adequate information to the consumer in making the decision to purchase.
Evaluation of Alternatives. Evaluation of alternatives in an environment of vast information is the reality in the use of the social media and other digital communication networks (Bolton et al., 2013; Bart & Keller, 2016). Bolton et al. (2013) investigated the behavior of Generation Y in terms of their use of social media. Evidently, the new media has a critical impact on how these consumers access and use information in evaluating alternatives on which to base their decisions. The interaction with the social media has an impact on the way the consumers are searching for the information on alternatives to satisfy their needs (Bart & Keller, 2016).
Purchase. On tallying up all the criteria, the final choice is made, and the customer is ready to make the purchase. Again, the information on the new media is mainly what is being used to make the decision. Interestingly, most of the members of the Generation Y population are making the purchases online (Bolton et al., 2013). Major expectations accompany the decision, which are evaluated after the purchase has been made and the product used. This leads to the post purchase behavior that includes the evaluation of the purchase decision.
Satisfaction/Dissatisfaction, Cognitive Dissonance, Consumption, and Divestment. Post-purchase behavior is critical following the decision of the buyer to purchase a product anticipated to meet the identified need. The evaluation is based on the level of satisfaction or dissatisfaction. The assessment is founded on the potential of the product to meet the expectations of the customer. For the Millennial, for example, the process includes writing reviews online (Elwalda & Lu, 2016). Following dissatisfaction, Cognitive Dissonance arises, which is common in all purchases (Darley, Blankson, & Luethge, 2010). In fact, this negative outcome can be minimized by understanding the needs of the customers and targeting their marketing. When consumers perceive poor performance of the product, the outcome is that it erodes the potential for loyalty and developing negative influencers in the customers. Elwalda and Lu (2016) provide the evidence of this in negative reviews. The same determines the disinvestment decision, which relates to the way the consumer disposes of the product or packaging following use, which can be through disposal, remarketing, reselling, or recycling.
Generational Cohort Theory In the efforts to explain the differences across generations, the generational cohort theory was proposed (Brosdahl & Carpenter, 2012). Research has focused on the diversity of the traits, which differ across generations in as far as consumer behavior is concerned (Burnsed & Bickle, 2015). From the theoretical point of view, social reforms and critical historical incidents critically impact on the beliefs, inclinations, values and attitudes of the people. Such events can come in the form of ideological experiences, which forms the basis for the differences in the shopping behaviors. The people who come into being during the same time and go through the same events (the same cohort) are most likely to have common cognitive styles and inclinations. The presumption that these elements are due to age and maturity of the person is the alternative to this theoretical model. However, the theory differs from the perspective, claiming that occurrences within a generation are a function, not of biological process, but of social events (Carpenter et al., 2012). Hence, generational events have an important role in explaining the differences.
Brosdahl and Carpenter (2012) when using the Generational Cohort Theory revealed the differences (can we have these differences) that exist in different cohorts of consumers in terms of the shared shopping behaviors. A particular generational cohort, say Generation Y (Millennial) have common features and characteristics (Petra, 2016). Specific boundaries, such as age or years of birth, define a generational cohort. Generation Y are the individuals whose date of birth fall between 1980 and 2000. Shopping behavior is one of the characteristics that differentiate them from others. For the marketers, this is an important segment because of the fact that they have the greatest purchase power. Brosdahl and Carpenter (2012) revealed that male generational cohorts differ in the way they make their purchases. The comparison between Silent Generation and Millennial Generation showed that the latter are most likely to do their shopping online.
References
Bart, R., & Keller, K. L. (2016). Integrating Marketing Communications: New Findings, New Lessons, and New Ideas. Journal Of Marketing, 80(6), 122-145. doi:10.1509/jm.15.0419
Bolton, R. N., Parasuraman, A., Hoefnagels, A., Migchels, N., Kabadayi, S., Gruber, T., … & Solnet, D. (2013). Understanding Generation Y and their use of social media: a review and research agenda. Journal of Service Management, 24(3), 245-267.
Burnsed, K. A., & Bickle, M. C. (2015). Comparison of U.S. Generational Cohorts’ Shopping Mall Behaviors And Desired Features. International Journal Of Sales, Retailing & Marketing, 4(4), 18-30.
Carpenter, J., Moore, M., Doherty, A. M., & Alexander, N. (2012). Acculturation to the global consumer culture: a generational cohort comparison. Journal Of Strategic Marketing, 20(5), 411-423. doi:10.1080/0965254X.2012.671340
Clow, K. E., & Baack, D. (2005). Consumer decision-making process. Concise Encyclopedia Of Advertising, 44-45.
Darley, W. K., Blankson, C., & Luethge, D. J. (2010). Toward an integrated framework for online consumer behavior and decision making process: A review. Psychology & Marketing, 27(2), 94-116.
Elwalda, A., & Lu, K. (2016). The impact of online customer reviews (OCRs) on customers’ purchase decisions: An exploration of the main dimensions of OCRs. Journal Of Customer Behaviour, 15(2), 123-152. doi:10.1362/147539216X14594362873695
Hibić, S., & Poturak, M. (2016). Impact of a Brand on Consumer Decision-making Process. European Journal Of Economic Studies, 17(3), 405-414. doi:10.13187/es.2016.17.405
Petra, K.K. (2016). Generation Y Attitudes towards Shopping: A Comparison of the Czech Republic and Slovakia, Journal of Competitivenes 8(1), 38 – 54
Yang, K. C. (2004). Effects of Consumer Motives on Search Behavior Using Internet Advertising. Cyberpsychology & Behavior, 7(4), 430-442. doi:10.1089/1094931041774668
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