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Consumer Behaviour and Decision Process
Sajeeb Kumar Shrestha
Ph.D. Scholar, M.Phil., M.B.S.
Teaching Assistant, Shanker Dev Campus
Tribhuvan University
1. Introduction
Consumer is the study of the processes involved when individuals or groups select,
purchase, use, or dispose of products, services, ideas, or experiences to satisfy needs and
desires (Solomon 1995). In the marketing context, the term ‘consumer ’ refers not only to the
act of purchase itself, but also to patterns of aggregate buying which include pre-purchase
and post-purchase activities. Pre-purchase activity might consist of the growing awareness of
a need or want, and a search for and evaluation of information about the products and brands
that might satisfy it. Post-purchase activities include the evaluation of the purchased item in
use and the reduction of any anxiety which accompanies the purchase of expensive and
infrequently-bought items. Each of these has implications for purchase and repurchase and
they are amenable in differing degrees to marketer influence (Foxall, 1987).
Engel et al. (1986) define consumer behaviour as “those acts of individuals directly
involved in obtaining, using, and disposing of economic goods and services, including the
decision processes that precede and determine these acts”. Simple observation provides
limited insight into the complex nature of consumer choice and researchers have increasingly
sought the more sophisticated concepts and methods of investigation provided by behavioural
sciences in order to understand, predict, and possibly control consumer behaviour more
effectively. Psychology, social psychology, and sociology are the disciplines most widely
The success of the firm will be determined by how effective it has been in meeting
the diverse consumer needs and wants by treating each customer as unique and offering
products and services to suit his needs and creating a life time value and relationship with him
(Nair, 2007). Marketers have come to realize their effectiveness in meeting consumer needs
directly influences their profitability (Assael, 1998).
2. Consumer Decision Making Process
Consumers decisions are concerned mainly with how, when, how much, from where,
questions concerned with the purchase of a products/services/ideas. Kotler (2004) explains
that there are five stages of consumers buying behaviour. This can be seen in the diagram
below.

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 Need Recognition: this is when the consumers defined their problem or need. A need
could arise either as a result of internal or external stimulus. Example of an internal stimulus
is when you need to eat something as a result of hunger. External stimulus arises from
commercial on television after which the consumer thinks that the brand/product is needed.
Therefore it is of importance that marketers find out what stimulus attracts interest in their
brand.
This occurs when a consumer notice that a need has become dissatisfied. Problem can
arise either through need recognition or opportunity recognition; when a person is for
example running out of something needed or a need is dissatisfied, the consumers actual
state moves downward, however when a consumer sees the possible opportunity to purchase
something new or better the ideal state moves upward. Marketers use either primary
demand, which encourages a consumer to buy any brand, or secondary demand where
consumers are to purchase a specific brand. Companies try to differentiate their products and
services over competitors (Solomon, 1995).
At this stage, choice models determine whether there is any need to buy a particular
category or not. Consumer recognizes a problem that stimulates him to by a product. Because
of budget constraints, he will buy after comparing utility of buying with utility of not buying.
Determinants of utility of buying a car will be saving of time, comfort, status etc. Ching
(2002) proposed price consideration model that examined the consumer's decision of
choosing a particular category for every week. After choosing the category, consumers
decided what to buy.
 Information search: This is the process when a consumer starts to look information about
the product or service. This is when consumers start to search for information through
commercial source, personal source, public source, and experiential source. This information
enhances the consumer’s knowledge and awareness of the available brand.
In order to make a wise choice, information search is necessary (Guo, 2001). How
much consumers know about the product or service when they decide to make a purchase and
how they obtain this information are important issues. This can be identified as the pre-
purchase search since the consumers has already identified to problem which is tries to
resolve. The consumers’ on-going search helps marketers to capture their attention.
Consumers are exposed to advertising incidentally or deliberately, depending on the
motivation to search information (Solomon, 1995).

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Punj and Staelin (1983) examined negative relationship between cost of search and
amount of external search. Beatty and Smith (1987) analysed various sources of information
like retailer search, media search, interpersonal search and neutral sources (consumer reports
and publications) and concluded that purchase involvement, attitude towards shopping and
time availability had a positive effect on information search behaviour of consumer whereas
product class knowledge reduced the likeliness for information search. Dowling and Staelin
(1994) found that increased perceived risk with the product induces more search for
information. Iglesias and Guillen (2002) used multiple regression analysis and found that
prior knowledge and sales variation where positively related to information search of the
consumers.
 Alternative evaluation: this is the stage whereby the consumers evaluate and rank
alternative brand based on the information they have. Such information can be price or quality
etc. Consumers must choose which product or service they decide to purchase. The evaluation
of alternatives is processed through identifying the evoked set which are products our
memory has registered, inept set which are the alternatives consumer are aware of but for
some reason do not consider buying which can be characterized as inert set; product that are
not considered to be purchased at all (Solomon, 1995).
Consumers have to consider and evaluate which satisfies their need the best. The
market beliefs of consumers are that they might get better value for their money from certain
shops or brands. Choosing the product requires usually evaluating the alternatives, however
this can be influenced by previous shopping experiences, beliefs of the product that
advertisers have put forth and information given about it. People tend to think that higher
price means better value and quality (Solomon, 1995).
 Purchase decision: this is when consumers purchase the product. Consumer’s perception of
a brand can be influenced by unforeseen situational factors and attitude of others. Factors
such as mood, behavioural and perceptual affect consumer state of mind the volume of
buying. The shopping experience influences on consumer satisfaction and how we use the
product. A satisfied client is more likely to purchase again (Solomon, 1995).
 Post-purchase decision: this is when the consumers compare their expectation and
perceived performance. Kotler (2008) stated that they get satisfied when their expectations are
the same with the product performance. Consumer decision process also involves post
purchase assessment. It can be defined as the consumer’s perceptions of the outcome of the
purchase process. The result of the purchasing can be either satisfaction (when the purchases

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do not conform to the buyer’s expectations) or dissatisfaction (when the purchases do not
conform to the buyer's expectation). The consumer will store the information and experiences
obtained by him with the purchase and try to recall the information with entering into another
purchase. This consumer decision making is a continual process as, the end of one purchase
decision is the beginning of another.
Conclusion:
It can be seen that consumers passes through five stages in their buying process.
Kotler (2008) opines consumers do not pass through all the stages in their everyday purchase.
Marketers have come to realize their effectiveness in meeting consumer needs directly
influences their profitability the better they understand the factors underlying consumer
behavior, the better able they are to develop effective marketing strategies to meet consumer
needs (Assael, 1998).
References
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Ching, A. (2002). Consumer learning and heterogeneity: Dynamics of demand for
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