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ASSIGNMENT COVER SHEET

STUDENT DETAILS

Student ID Reg No. PE52146

Family Name sanjak Karki Given Name Sanjok Karki

Enrolment Year 2021 Section A

Semester II Email sanjok@ismt.edu.np

UNIT DETAILS

Unit Title Consumer Behavior and Unit Code J/508/0596

Insights

Assessor Name Pravin Shakya Issued Date 7/1/2022

Understanding Consumer Behavior and Insights
Assignment Title

Assignment No 01 Submission Date 6/3/2022

Qualification BTEC HND in Business Campus ISMT

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STUDENT ASSESSMENT SUBMISSION AND

DECLARATION
When submitting evidence for assessment, each student must sign a declaration confirming
that the work is their own.

Student Name Sanjok Karki Assessor Name Pravin Shakya

Issue Date 7/1/2022 Submission Date 6/3/2022

Programme Understanding Consumer Behaviour and Insights

Unit Name Consumer Behavior and Insights

Assignment Title Understanding Consumer Behavior and Insights

Plagiarism

Plagiarism is a particular form of cheating. Plagiarism must be avoided at all costs and students who break
the rules, however innocently, may be penalized. It is your responsibility to ensure that you understand
correct referencing practices. As a university-level student, you are expected to use appropriate references
throughout and keep carefully detailed notes of all your sources of materials for the material you have
used in your work, including any material downloaded from the Internet. Please consult the relevant unit
lecturer or your course tutor if you need any further advice.

Student Declaration
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Table of contents

Introduction to consumer decision journey……………………………………. 3

Purchasing Decisions …………………………………………………………….3-4

Consumer decision journey……………………………………………………… 4-5

Types of consumer products ……………………………………………………..5-9

Importance of consumer decision-making ……………………………………….10

Five stages of consumer decision making process ……………………………..10-12

Examples for consumer decision making process ………………………………12-14

B2B vs B2C marketing: Decision-making process…………………………………. 14-17

Conclusion ………………………………………………………………………………..18

Reference …………………………………………………………………………………..19

The consumer decision journey, or the McKinsey Model, is a model developed by the
management consulting company McKinsey & Company that reflects the customer buying
process. This framework evaluates how consumers make purchasing decisions and the ways
marketers can influence these decisions. Marketers can use this model to evaluate their key
touchpoints or interactions with customers.McKinsey & Company replaced the traditional
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purchase funnel model in 2009 due to the shift in consumer purchasing behavior with the digital
research of companies. The consumer decision journey is a circular process that focuses on
adding customer loyalty and building advocacy. It maps the steps a consumer follows, beginning
with an awareness of a product to becoming a loyal customer (Kinsey 2005).

Consumers make purchasing decisions based on a variety of factors. Most consumer

decision journeys start online, where consumers look at website reviews and social
media recommendations. Those looking to purchase an item also consider a brand's
values and whether these values align with their own. When buying an item or service,
consumers follow a series of steps to help them choose which company best fits their
needs. The steps of a consumer decision journey include

1. Trigger: A stimulus or trigger begins the consumer decision journey when an

individual notices they have a problem and need a company's product or service
to resolve it.

2. Initial consideration set: When considering a purchase, an individual reflects on

their initial consideration set or brands they immediately think of due to brand
awareness.

3. Evaluation: Consumers gather information from researching multiple sources

and reading reviews to decide which brand has what they want or need.

4. Buying: Once the consumer filters their options from the information they
gathered in the evaluation stage, they choose a brand and start the purchase.

5. Ongoing exposure: After purchasing the product or service, the individual

creates expectations from their post-purchase experience to help them make
their next purchase decision.

6. Loyalty loop: Depending on a customer's satisfaction with the product and

company determines whether they become loyal customers and brand
advocates.

Here are some steps to take when using the consumer decision journey:
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1. Get to know your consumers

The first step in using the consumer decision journey in a marketing strategy is to
identify a company's consumers and their motivators. You can also look at your
customers' past experiences with your company and their recent behaviors to learn how
you can market to them. Learning about your customers can help you support them in
the consumer decision journey and understand what they need. For example, one way
to do this is to hold a focus group to develop a buyer persona.

2. Create brand awareness

After getting to know your customers, focus on increasing customers' knowledge of the
company. Building strong brand awareness can help your company appear more often
during the initial consideration step. This is especially important to match the marketing
trends of the modern era that go beyond one-way conversations and instead focus on
building a relationship with consumers. You can develop brand awareness by
sponsoring events or posting content on social media.

3. Tailor messaging

Next, evaluate what area of the process the company has the greatest room for
improvement in, such as the initial consideration, and create a message that
addresses those vulnerabilities. For example, a car company launches a marketing
campaign that provides financial protection for consumers by allowing them to return
their car if they lose their job. This campaign helps reach new consumers who were
initially hesitant about making an expensive purchase.

Companies can also personalize messages that identify what stage of the journey the
consumer is in. Paying attention to where a customer is in their journey can help
companies send relevant messages to them at the right time. This personalization is
important to create effective communication with consumers and offer them a
customized experience.

4. Offer discounts

To encourage consumers at the moment of purchase, offer special deals and

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promotions that are available for a limited time. This can help secure their decision in
purchasing from a company and avoid customers abandoning their shopping carts.
Personalize the discount to match the item they are purchasing. To do this, you can
send them a discount for the specific item they were thinking of buying but left in their
online shopping cart.

5. Keep your messages current

Continually provide reliable and timely information for your consumers on your web
pages, social media profiles, and other related channels. Make sure your information
is easy to find to encourage buyers to keep coming back. Create content that your
consumers are likely to share with others.

6. Invest in the right channels

When choosing what marketing channels to use, pick the channels your customers
already use. For instance, if your customers use social media, post updates there.
Become a part of where their conversations are happening to take part in their
consumer decision journey.

Typically, a company uses the consumer decision journey when navigating how it can
empower consumers and encourage purchases. This model helps companies
understand how their marketing practices can adapt to their consumers' expectations.
The consumer decision journey also helps companies identify and improve their
touchpoints. Because the consumer decision journey begins even before the buyer is
aware, it is important to build your brand presence in the community and across various
channels.

Types of consumer products

The following are the four most common types of consumer products offered by businesses:

Convenience products

A convenience product is typically purchased often and appeals to a large

market base. Consumers regularly buy convenience products to meet their
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needs and tend to have little concern for where they buy the product.

Characteristics of convenience products

● Bought frequently
● Low-priced
● Easily accessible

For example, a candy bar would be considered a convenience product. This product is
available in a variety of places, including gas stations, vending machines, and grocery
stores. The consumer likely isn't too picky about where they would buy the product
and probably won't develop loyalty to a particular store when it comes to purchasing
candy bars. Additionally, customers rarely spend much time comparing one candy bar
to another but instead purchase candy bars with little thought.

Other common convenience products include:

● Laundry detergent
● Toothpaste
● Vitamins
● Cleaning supplies
● Beverages

Convenience products are the most common type of goods purchased by

consumers and are widely distributed and therefore require mass production. They
typically require much less promotion through marketing compared to other types
of products.

Specialty products

Specialty products are those that have unique characteristics or are associated with a
particular brand. People who purchase specialty products carefully source these
products and develop loyalty to the company that produces or sells them. Specialty
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products are typically priced higher than other types of products. Hence, many
consumers put more stock in buying this type of product due to its perceived value and
ticket price.

Characteristics of specialty products

● Standout attributes
● Unique brand perception
● Higher price point
● Available only at select locations,

For example, a Porsche is an example of a specialty product. This product can only be
purchased through a Porsche dealership and is known for its unique characteristics.
Porsche vehicles are also specifically recognizable due to the storied Porsche brand.
Consumers spend a considerable amount of time sourcing Porsches and are willing to
pay a higher price for this car than competing vehicle brands.

Here are a few more examples of specialty products:

● Watches
● Designer clothing
● Luxury vehicles
● Perfumes

Most specialty products can only be purchased in select stores and are bought much
less frequently than convenience products. They can sell based on reputation and
word of mouth but require promotional advertising to spread awareness of the
availability of the product beyond niche, dedicated buyers.

Shopping products

Shopping products are products that are purchased less frequently than convenience
products but more frequently than specialty products. These products can range in
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price, style, and quality, and consumers often spend a great deal of time comparing
shopping products before purchasing them. Shopping products are available in fewer
locations than convenience products because they are distributed selectively.

Characteristics of shopping products

● Bought less often

● Medium-priced
● Frequently compared to other products,

For example, an airline ticket is a common shopping product. Airline tickets are only
available through airline companies and can vary greatly in price. Most consumers will
spend time comparing airline tickets to choose which one best meets their needs and
fits within their budget.

Other examples of shopping products include

● Clothing
● Furniture
● Electronic devices
● Vacuum cleaners

Unsought products

Unsought products are those that consumers typically don't buy or wouldn't consider
purchasing regularly. Most people who purchase unsought products do not plan the
purchase ahead of time. Often, a consumer doesn't even know that the product exists
until the need arises to purchase it. Prices of unsought products can vary greatly and
they typically are not offered by a wide variety of sellers.

Characteristics of unsought products

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● Not in the forefront of consumers’ minds

● Extensive advertising and marketing efforts are needed,

For example, the services provided by certain lawyers are an example of unsought
products. Most individuals do not think about paying a family lawyer until they decide
to draft a will or need to contest one, or need legal advice for divorce, child custody,
or adoption. If you get injured in a car accident or on the job due to someone else’s
negligence, you might seek a personal injury lawyer to help you get compensation
for medical care, lost wages, or pain and suffering.

Here are a few more examples of unsought products:

● Funeral services
● Life insurance plans
● Smoke detectors
● Fire extinguishers

Many new and innovative goods are considered unsought products until consumers
become more aware of them. Unsought products typically require much more
aggressive advertising and marketing compared to other types of products to spark a
need for the product and ensure consumers are aware that it is available.

Importance of consumer decision-making process

It's important to understand the consumer decision-making process because it allows

you to anticipate the needs of consumers and plan marketing or sales strategies
based on those needs. Here are some additional advantages of understanding the
consumer decision-making process:

Provides leverage against competition

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By understanding consumer buying habits in your industry, you have the opportunity to
develop unique sales and marketing initiatives that attract more consumers to
purchase your products over a competitor's.

Provides customer base information

You can use the consumer decision-making process as a guide for future marketing
campaigns, advertisements, or product launches. This is because it encourages you
to consider what a consumer needs initially, the communication channels they use to
find products, and what they value in terms of budget, product design, or quality.

Increases sales and customer base

When reviewing the consumer decision-making process and determining the most
effective methods to engage with consumers, you can help increase product sales
and expand your customer base. When you understand how your customer
perceives a need, you can provide more relevant marketing materials and
distribution methods.

The 5 stages of the consumer decision-making process

There are five stages in the consumer decision-making process. You can review
these stages to learn more about what informs a consumer’s purchasing decisions. A
customer:

1. Acknowledges a product or service need

In the first stage, consumers acknowledge they need to purchase a product or service.
They may decide they need to buy a product so they can complete an activity, promote
their well-being, make someone happy or enhance their knowledge, or any
combination of these.

2. Researches product options

In the second stage of the consumer decision-making process, a consumer has

acknowledged their need for a product, and now, researches the types of products
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available on the market. They might conduct internet searches, watch commercials,
examine products in stores, and/or ask advice from family and friends to help them form
a buying decision.

3. Compares products and services from different sellers

Once a consumer finds a product or service that meets their needs, they often
compare similar offerings from different sellers based on pricing and quality.
Availability is another factor that consumers may use to determine which company to
buy from. This is especially important if they need a product for an upcoming event
or project. During this stage, consumers may also consider industry trends and
brand awareness to make their final purchasing decisions.

4. Choosing a product and making the purchase

In the fourth stage of the consumer decision-making process, consumers determine

which product they should buy and purchase that item. They typically do this by
making purchases online or finding local retailers who sell the item and purchasing
them in-store.

5. Reflecting on their purchase and whether to repurchase

After a consumer purchases a product and uses it, they can accurately determine
whether it was worth the price and whether they want to make additional purchases
from the same company. They may decide to leave a review on the product page or
order more of the same product before it sells out.

Here are some specific examples of how consumers identify their needs and make
purchasing decisions:

Example 1

Here's an example of the consumer decision-making process:

● Stage one: Laura's refrigerator continues to shut off randomly and leaks water
all over the floor. Because of this, she finally decides it's time to purchase a new
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refrigerator. ● Stage two: She goes online and looks at refrigerator models from a
few different retailers, including the one where she purchased her current
refrigerator. Laura also asks her friends and her sister about their refrigerators and
she pays attention whenever a kitchen appliance advertisement appears on TV.
● Stage three: With a better understanding of the types of models on the market,
Laura narrows her options to two retailers that have similar models. The first
retailer offers a refrigerator within Laura's price range, and with most of the
features, she wants. However, the reviews suggest that the refrigerator has
frequent repair needs and won't last long. The second retailer's prices are slightly
higher than what she wants to spend. But the reviews are great, and the
refrigerator has even more features than expected.
● Stage four: Because Laura wants an excellent quality refrigerator, she decides
to spend the extra money and buys from the second retailer.
● Stage five: After having her new refrigerator for six months, Laura concludes that
it has everything she needs and functions well. She writes a positive review
online and decides to return to the retailer for any future purchases.

Example 2

Here's another example of how a consumer might decide to make a new purchase:

● Stage one: Jordan used the same hiking backpack for almost six years until he
noticed there was ordinary wear and tear damage at the seams. Because he
hikes frequently and knows his backpack won't last much longer, he decides
it's time to invest in a new backpack to carry his gear.

● Stage two: He goes to the original retailer's website to look for a similar model,
but he also checks a few other websites based on recommendations from his
hiking friends. Jordan also visits a local outdoor shop to see their selection of
backpacks.
● Stage three: Using the information he found online and at the retail store, Jordan
decides he wants a brightly colored pack with reflector gear and at least five
compartments. He knows he needs to stick to a budget of $150. Because of this,
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Jordan decides not to buy an overly expensive backpack from one retailer. He
also rules out another retailer because they only offer packs in muted colors.
● Stage four: Jordan rules out the remaining retail options in favor of one retailer
who is offering the type of hiking backpack he needs within his price range. He
purchases the backpack at his local outdoor shop.
● Stage five: After using the backpack on four hikes, Jordan praises it to his
friends and starts following the retailer on social media to get notifications
about new gear options.

Example 3

This example of the consumer decision-making process outlines a possible choice:

● Stage one: Kennedy wants to work out with her friends and achieve a healthier
lifestyle. Her friends have the same fitness-tracking wristband that allows them
to challenge each other to accomplish a certain number of steps each day.
Kennedy decides to purchase a fitness-tracking wristband from the same
retailer.
● Stage two: She goes onto the retailer's website and looks at the different options
available to her. She also consults with her friends to see what they like and
dislike about their wristbands.
● Stage three: Using her research, she determines that she needs to stay under
$100. She also wants a fitness-tracking wristband in a muted color and needs
something lightweight.
● Stage four: Based on her criteria, she narrows her search on the retailer's
website to a particular model. She reads the reviews and color options to aid
her decision. She then purchases the model from the company website.

● Stage five: Three months later, Kennedy still uses her fitness-tracking wristband,
and she likes how it keeps her accountable for her health and motivates her to
engage in healthy activities with her friends. She decides that she wants to
purchase from the same retailer in the future.
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B2B vs B2C marketing: Decision-making process

In B2B marketing, B2B businesses strive to maintain open communication in the

decision-making process. For B2C marketing, businesses strive to make the process as
quick and easy as possible.

B2B: Maintain open communication

The decision-making process is another place where you can appeal to the emotional
and rational decisions of businesses. In the decision-making process for B2B, it is more
open communication between businesses to determine whether or not it is a good fit for
both parties. During this communication, comparing the positive aspects of your
company to your competitors can be highly effective in giving you a step ahead. During
the decision-making process, B2B customers must evaluate the company or their
individual worker’s needs. These needs can be separated into rational and emotional
motivations. The rational motivations are those that drive their financial mind. Is this a
good investment for us? The emotional motives are those that drive their emotional
connection to the company or individual workers. Will I have to fire someone or a group
of people? Will we lose money and have to cut benefits for our workers?

At some point, both of these decisions are important enough to sway their decision.

As B2B marketers, understanding your audience can help you understand the decision-
making process that may apply to them. Being able to deliver a message that is clearly
specific can place you ahead of competitors by creating an emotional connection
between both parties (New media investment group 2022).

B2C: Simplify the process

The B2C decision-making process is where you can start utilizing their expertise in the
conversion funnel to maximize ROI. At the top of the conversion funnel, a B2C marketer
must be able to create influential advertisements that give the consumer the need for a
product. Once the consumer has identified a need, they already have a clear
understanding of what kind of product they are looking to purchase. Unlike B2B
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businesses, consumers are much more flexible when looking at a specific product to
buy. As a marketer, it is essential that you continue to appeal to the consumer and
ways to get them what they’re looking for by simplifying the decision-making process.
Unless the consumer has made a firm decision to purchase your product, often they
look at your competitors to see if they can get similar products quicker and for a better
deal. As a search marketer, it is essential to identify focus keywords that a consumer
will search for when looking for similar products and try to rank for those keywords. The
higher you rank, the closer you are to bringing customers back to your site. When
evaluating the conversion funnel, we see three sets of keywords we can potentially go
after to grab their attention.

For example, if the customer wants to learn more about electric bikes, they may
search for the long-tail variation of the keyword “electric bikes” such as “what is an
electric bike.”

Once the customer learns about the electric bike, they may want to learn about electric
bike brands that are trustworthy and high-quality. So, they will search for “best electric
bikes” next. Once they search through the various brands, they may find the exact
brand they want to purchase from, and now they are ready to buy. So, they search
“insert brand electric bike.”As a B2C search marketer, make sure that all of these
portions of the conversion funnel are covered and targeted by blogs, core pages, and
product pages so you have a higher chance of capturing potential customers in the
space. Remember, as solid as your conversion funnel is, if your checkout process is
confusing, it can turn your customers away and leave room for others to steal them.
Optimize your conversion funnels, minimize the complexity of these processes, and
work toward the conversions you’re looking for (New media investment group 2022).

In B2B, mixed research approaches are quite common. The research methods can be
qualitative or quantitative or ethnographic depending on the type of results the
researcher seeks. The B2B

marketing research is complicated and complex, therefore multiple approaches are

applied. Moreover, the B2B research methodologies are neutral. Tele-depth approach is
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one of the famous methods in qualitative Business to Business (B2B) as the businesses
in this marketing makes the most of the transactions by phone. Tele-depth interviews
are often preferred as it provides better top-notch quality data than face-to-face
interviews (Karimi, 2013.). Apart from this, making use of the focus group does not serve
the purpose of qualitative research as the businesses are geographically scattered and
are in competition with each other.

In B2C research, the sample size is larger than the B2C, thereby making this research
less skewed and more reliable. In addition to this, B2C research is customer-oriented
rather than business-oriented in order to understand the perspective of the consumers
while purchasing the product or services. Since B2C research focuses on building the
relationship with the customers and loyal consumer base. Therefore, in B2C approaches
incentives are given to participants in the form of cash, reward points, coupons, gift
cards, etc (Hadjikhani and LaPlaca, 2013).

It is a well-known fact that an average customer goes through a pre-defined decision-

making process before making a purchase of the desired goods or services. This path
involves some commonalities across organizations and target audiences, but it is
essential to understand a specific buying process. Understanding the decision-making
process is important to growing a business. In this section, how marketers influence the
consumer-decision making process has been evaluated.

There are numerous ways by which marketers can influence the consumer decision-
making process in B2C that are elucidated here. Identifying the target audience can help
in influencing consumer behavior. For that purpose, marketers make use of both
qualitative and quantitative market segment tools. These tools help in assessing the
factors, such as geography, demographic, age, location, etc. They also analyze the
behavioral and psychographic influences. The organizations try to build relationships
with consumers based on experiences, knowledge, perceptions, and usage. This helps
the organization in improving brand loyalty, and brand attributes, and enhancing the
usage rates and occasions.

Apart from this, companies are currently making use of niche marketing. It allows the
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organization to amplify the marketing strategy rather than vanishing the investment in
the general market. The niche market was invented as a result of analyzing consumer
behavior in order to serve the under-served market.

There are numerous ways by which marketers can influence the consumer decision-
making process in B2B that are explained here. The changing canvas of commerce is
affecting their choices. The business at the current time is being operated online rather
than offline modes. The seller’s behavior and sophistication have been improved over
the course of time. Buyers now have the option to return, exchange or replace their
orders. Apart from that, the door-step services also help the businesses in influencing
consumer behavior. In addition, technological changes have triggered the growth of the
emerging market. The use of advanced technology in the production of goods and
services has led to higher efficiency and market growth.

Conclusion

An understanding of consumer behavior is an important part of comprehending the

allocation of resources by individuals. Consumption decisions are made based upon a
logical process valuing utility, price, and income alternatives. Firms seek to understand
this process in order to better serve consumers. Firms employ brand managers to
allocate resources to effectively serve consumers on a product or service. These
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decisions might involve redesigning products or better targeting consumer markets with
information. Customer buying behavior is mainly the attitudes and the preferences that
customers have towards an individual product regarding the behaviors in the
marketplaces while purchasing a product or a service. Individuals make their decision
based on many aspects such as the availability of resources, and also the consumption
aspect that is related to the objects that they want to purchase.
Decision-making is a critical behavior by customers. However, during the decision-
making process, there are various tangible rewards that must be considered in picking
out a particular brand or product. A customer may find tangible rewards like identifying
the cost-saving and the pricing incentives for the product that provides the consumer
with a more general value based on the concerns with the finance. Moreover, there is a
more dynamic reward that focuses on intrinsic value. The reward ensures that the
consumers have a relationship that is created between them and the brand, and this
eventually defines the consumer participation in the program. Understanding consumer
behavior provides the marketers with the necessary information to repurpose their
products and also ensure that they meet the user's needs without necessarily changing
the brand itself.

References

Kinsey, 2005, consumer decision journey, Indeed Editorial Team, Austin.

American recruit corporation limited,2004, Consumer Decision-Making Process,

Indeed Editorial Team,15 April 2022,<http://www.indeed.com>.

(New media investment group 2022, B2B vs B2C Marketing: 5 Differences Every
Marketer Needs to Know, viewed 15 April 2022, <http://www.wordstream.com>.
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Karimi, (2013). The Relationship between Organizational Learning and Competitive

Strategies and Its Impact on Performance of Business and Customer, Arabian Journal
of Business and Management Review.

Hadjikhani and Laplaca, (2013), Development of B2B marketing theory, Industrial

Marketing Management.