Consumer Buying Process

Video Transcription

Hello. Today we're going to talk about the consumer buying process. Now, as always with these tutorials, please feel free to fast forward, pause, or rewind as many times as you need in order to get the most out of the time that you're going to spend here. Let me ask you a question. Do you have a buying process? I know what you're thinking. Some things I think about, some things, well, I just go to the store. Well, it might surprise you that everybody has a process that they go through to buy whatever product that they want to purchase. It's just a question of how involved that process is.

Well, during this lesson, what we're going to be talking about is the consumer buying process. We're also going to be looking at low versus high involvement. And we're going to be looking at the business's impact on the consumer buying process.

Now, the key term for this lesson is going to be consumer buying process. So let's go ahead and define the consumer buying process. This is the process which human beings go through while making choices to meet their needs and wants. If we look at this process in more detail, we're going to see that there are five individual steps that the consumer is-- from the consumer's perspective, that is-- that is going to be involved in this particular process.

Now, the first one is going to be problem or need recognition. For instance, am I hungry? Or is my shirt not fashionable enough? There's a problem or a need that I'm trying to fulfill or fix, and I'm looking for a purchase that's going to make that happen.

The next step is going to be information seeking. Once I've defined what my problem is, I'm going to look for information about solving it. For instance, I might look at nutrition labels, or I might look at Yelp reviews. I could Google it and research different prospective purchases that I might want to make in order to make a more informed decision.

Next I'm going to evaluate the alternatives I have, because I want to make the best choice for me. So I'll consider a lot of options. If you remember, the 4 Ps and those four influences that we talked about before, these are part of that evaluation section. What's the price, product, promotion, and place where I'm going to go buy it? What are those social, cultural, psychological, and personal influences that may have an impact on my alternatives? The fourth step is going to be actually making the purchase, go to the store, go online, make the purchase, and buy the product that I think is going to be best for me.

Now, we can make this decision to purchase based on rational motives, logical needs, things that make sense, things that are, well, as Mr. Spock would say, logical. And we also have emotional alternatives, the Captain Kirk in all of us. What are the wants and desires that I want? What are the things that are going to make me feel better about myself or make me fit in better?

Lastly, we're going to look at post-purchase evaluation. This is the last step in that process. Now that I've done the research, I've identified the need, I've done all my evaluation, I've made that purchase, I'm looking at how does this purchase work for me. I could regret buying it. You know, the shirt's awfully fashionable, but man, it makes me itch. Then again, you may absolutely love the purchase. So these are all those five steps we have when we go through the process of making a purchase.

Now, something else we're going to look at here is how involved you are in actually making the purchase. And let's face it, something like buying a car or a house, the process is going to be a lot more involved than going down to the corner store and picking up a gallon of milk.

Now, this can vary by type of good. As I mentioned before, convenience goods are going to be something where you spend very little time information seeking or evaluating. There's going to be a low involvement here. I already know what I want, and I'm simply going to go to the store and purchase it.

Now, those shopping goods, here we're going to spend a little more time information seeking. We're also going to spend more time evaluating the options. This is a much more involved process. This is usually a much more expensive item. So I want to make sure that the item that I'm getting is going to be right for me.

Now with specialty goods, consumers are going to spend a lot of time. This is really high involvement shopping in evaluating the alternatives and information seeking. I want to spend as much time as I can researching and making sure that I'm going to get the right product to fulfill my need or my problem. Now here we're talking about things like houses or cars or major, major purchases, things you're going to spend a lot of time shopping around with.

Now, keep in mind here that it's going to vary based on the individual. And if I'm ultra-rich, for instance, buying a new car may not be that big of an involvement purchase for me, whereas buying a lot of stock would make a big, big difference in how involved I am in the purchase. Or just could have a lazy day, and I just don't feel like doing this today. I may let my conscious or my emotions make the decision for me.

But however, no matter what type of person you are, there's usually a normal range of people doing this particular thing. Everyone's going to go through the particular steps we've talked about. It's just a question of how involved they are in the purchase and also some of their personal choices in the matter. Now, here we can see the consumer buying process laid out for us. On the left, we have problem need recognition. And all the way to the right, we're looking at post-purchase evaluation.

Now, how do businesses impact the consumer buying process? And here what we're really looking at is how does a business trigger a response at each one of these levels? How is it that I'm getting my product in the consumer's mind at each of these levels in the process? Let's face it. If I miss one of these steps in the process where the consumer is purchasing, I'm missing an opportunity to sell my product.

Well, let's talk about right here, recognition and need. Here what a business might do is send an email reminder out to previous buyers, or I may have a billboard in a place where I know my target audience frequents. Next, with information seeking, here a store can have an effective website to answer questions and online ratings.

And make sure these things are positive. So I'm watching those Yelp ads and I'm making sure that I'm not getting bad reviews that aren't based in reality. These are people who just want to hurt my business. Or I'm getting valid feedback, and there really is a problem, I'm making sure that I'm taking steps to fix those problems so that I have good reviews when people are out there information seeking about my product.

Next, with evaluation of alternatives, I may have pricing incentives to encourage people to look at my particular product more. Examples of this would be like Progressive, doing their price check feature for insurance, comparing what I offer with what my competition directly offers because I'm so confident that I can beat the competition for the same type of product, or using travel pricing websites such as Travelocity or places like that.

Next, with the purchase of a particular item, one of the things I might do is have excellent people on the sales floor to make sure they can answer any questions, any of those last-minute questions that a consumer might have. And lastly, we're looking at that post-purchase evaluation. What is it about my product that I'm going to make sure I have repeat business and new business, those Yelp reviews, for instance?

I want to look at customer feedback surveys and those reviews to make sure they're positive. And if I have problems and I understand that I have problems, I want to make sure that I'm taking steps to fix it so that those problems don't lay out there over an extended amount of time. That way I can influence the next buyer when they're doing their information seeking.

So what did we cover in this lesson? Well, we looked at the consumer buying process. We also looked at low involvement versus high involvement shopping and how low versus high involvement may affect the time that I spend in each one of those five steps in the process. And lastly, we looked at how businesses can impact consumers' thoughts during that buying process or of the pricing incentives or the advertising I'm using. Or am I looking at the reviews and making sure that they're positive for the next purchaser or the repeat purchaser?

Want to thank you for spending some time with me today. I hope you had a good time. I know I did. And I'll see you guys next time.