Summary

Understanding the Digital Consumer

Today, if we want to eat our favourite cuisine, we log on to Zomato; if we are looking for a pair of earphones,
we check Amazon or Flipkart. With an increasing number of people spending a lot more time online, it
becomes crucial for a brand to have a digital presence. It is also mandatory to understand a consumer’s
decision making process - how exactly does a consumer decide to buy a product or service. This will help a
Marketer sell their products to consumers. The Consumer Funnel or Purchase Funnel - defined as the journey
of a consumer from becoming aware of a brand to finally converting - thus, becomes the focal point of every
marketing strategy.

What are users doing online?

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According to reports, 80% of internet users do some form of research online before making a purchase. The
AdWeek says 28% of internet users spend time on social media platforms like Facebook, Twitter, Instagram
and others. Most of us spend time online searching for information, consuming content and buying everyday
products. The purpose of all the content available on these media is to attract and convert users. Hubspot
estimates that by 2017, 69% of a digital user's content consumption will constitute of videos. Talking about
E-commerce, which is the face of digitalisation, India's market is presently estimated at $38 million and is
one of the fastest-growing markets in the world. Today, more users have access to the internet via their
mobile devices; thus, leading to a significant increase in the amount of time spent online.

The Modern Consumer’s Decision-making Process

In the next segment, you learnt about the consumer’s decision-making process through the concept of the
purchase funnel. Once you know what a digital consumer does online, you need to then understand the
consumer’s decision-making process. Digital consumers go through various processes before making a
purchase. Sometimes, they just search for information about a brand; or compare it with others. Right from
watching a car ad to buying a car, a consumer goes through several stages of a purchase funnel. These stages
can be classified as:
1. Awareness: The user becomes aware of a brand and reads up on it
2. Consideration: The user considers buying the brand by comparing it with others or reading reviews
3. Decision: The user decides to convert by buying a product or service from the brand

Thousands of consumers must have reached the awareness stage after seeing an ad multiple times and
reflecting on it. A few thousand of them would have reached the consideration stage and even fewer
would’ve reached the decision stage.
Before you use the purchase funnel, you need to consider these conditions:
● Are we selling to businesses (B2B): Businesses usually have a longer “time to buy” as compared to
consumers. Hence, almost all B2B transactions follow the purchase funnel. This increased “time to
buy” means the marketer needs to not only be present in the user’s environment, but also follow the
user across multiple digital avenues; from web display ads to customer reviews to email.
● Are we selling to consumers (B2C): For consumers, the purchase funnel does not always make
sense. The time taken for a single purchase decision is much shorter on average and quite often based
on previous purchase decisions. For example, as a consumer you continue to buy the same brand of
toothpaste over and over again, without thinking much about other brands. But when choosing a
phone, you might consider different brands and models.

Using the example of a customer’s phone buying experience, through online vs offline channels, you learnt
how a digital consumer makes purchase decisions.

Constructing the Non- Linear Funnel

In the next segment, you learnt there is no defined, linear process through which a consumer moves across
a consumer funnel. A consumer may just buy your product online because their friend recommended it,
without reading about your brand or comparing it.
You learnt how a consumer’s decision-making process occurs with the help of an example. Here’s how a
consumer makes a decision while buying a mobile phone:
1. A consumer comes across a mobile phone advertisement and realises he wants to replace his old
device with a new one. He learns more about the phone and that is his ‘Zero Moment of Truth’.
2. When he goes to a site such as Amazon to check out the specifications of a phone or compare it
with other phones, he reaches the ‘First Moment of Truth’.
3. If he finally ends up buying the mobile phone, it becomes his ‘Second Moment of Truth’.

So, while the purchase funnel is useful in many cases, in quite a few cases, we use the ‘Moments of Truth’
model to explain purchase decisions and marketing strategies. Keeping this in mind, you can refer to the
stages using slightly different terms:
1. Trigger or Top of the Funnel - These are all the touchpoints that make a person aware of the
product and pushes him or her to the next stage i.e. research about the product they intend to buy
2. Zero Moment of Truth or Middle of the Funnel - This is where users identify the product they want
to purchase and learn as much as possible without having a personal interaction with anyone
3. First Moment of Truth or Bottom of the Funnel - This is where a user directly informs the advertiser
of his or her intention to purchase the product
4. Second Moment of Truth or Delight - This is the experience a customer has with the product

Through the example of Bajaj V you understood the non-linear movement of a customer before purchasing
the bike. This is true for most digital consumers who tend to enter at any stage of the funnel and not
necessarily follow the linear funnel.
 Financing and Management of Working Capital
You should be able to:

At the end of this session, you should be able to:

1. Understand the online activities of a user in the digital space
2. Understand the modern consumer's decision-making process
3. Understand the construction of a non-linear funnel