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Identifying & Using Consumer Information

Instructor: Danielle Eiseman
This lesson provides an overview of the consumer purchasing decision process. It will describe how consumers identify and use information on pricing to make informed purchasing decisions.

The Consumer Decision-making Process

We all consume. On the most fundamental level, we consume to fulfill basic needs; for example, we purchase items to feed and clothe ourselves. Beyond that, we consume to fulfill wants, such as the desire for a new handbag or a pair of designer shoes. And we face thousands of decisions every day. We decide when to get up, what to eat, what to wear, what time to leave home, etc. Fortunately, our brains are set up to help us make these decisions in an efficient way. The consumer decision-making process consists of five steps, which include: problem recognition, information search, evaluation of alternatives, product choice, and evaluation of outcomes.

Decision making
Decision making

Problem Recognition

The first step is called problem recognition or need recognition. For instance, perhaps you recently discovered that your favorite pair of jeans has a giant hole in them. You don't want to walk around with jeans that have a big hole in them, so you are now faced with the problem of either getting the jeans repaired or discarding them for a new pair of jeans. After careful inspection, you determine the hole is too big to repair, so you decide to look for a new pair of jeans. The problem or need is to find a new pair of jeans.

Purchasing jeans
Jeans

The Information Search

The next step in the process is to conduct an information search. You need to decide which pair of jeans to buy to replace your damaged pair. To do this you might turn to the internet to search for options that are available to you. A brief search reveals that jeans are offered in a variety of colors, styles, brands, sizes, and prices. Each of these aspects provides you with information you can use to make a decision on what to buy. You have the ability to gather information by visiting a number of stores that sell jeans or by making the same comparisons by visiting a number of websites.

Using the internet, you're able to easily gather the relevant information needed to make an informed decision about the qualities you want in a new pair of jeans. We often gather a lot of information about a product so that we can feel good about the money spent on it. When we make a purchase that we later regret or feel unhappy with, it is often referred to as buyer's remorse. Gathering ample information about a product helps to prevent buyer's remorse.

Evaluation of Alternatives

Once you have gathered information on several different pairs of jeans, you may compare your options or evaluate your alternatives. You do this to find the pair of jeans that best fulfills your needs. Perhaps one pair has a great fit and color, but the price is beyond your budget. Another pair has a price you are comfortable with and they fit well, but you are not happy with the color. You consider all these factors before you arrive at a decision.

You may decide that fit and color are more important than saving a few dollars. However, another person may choose the cheaper jeans because cost is more important to them. We all make consumption decisions for different reasons; some people might make purchase decisions based on style, while others focus on comfort or cost. These decisions vary from person to person.

In the case of shopping online, there is often the additional cost of shipping. This extra cost provides another factor to consider. Many people do not wish to pay extra for shipping and will make their comparisons and evaluations of products at home by using information available online. Then they will go to the store and make the purchase in person to avoid shipping costs.

Product Choice

After evaluating your alternatives based on the qualities you are looking for in a pair of jeans you make your final product choice. You pick the pair of jeans you are going to buy and make your purchase. If you are in a store this involves walking up to the cash register and paying for the jeans with either cash or credit card. If you make your purchase online, this involves checking out via a virtual shopping cart and entering in your credit card information and shipping preferences.

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