hello everyone welcome to business school 101 the consumer decision-making process also called the buyer decision process helps companies identify how consumers complete the journey from knowing about a product to making the purchase decision understanding consumers buying process is critical for marketing and sales normally the consumer decision-making process includes five stages in this video I will discuss the five-stage consumer decision-making process with you stage 1 recognition of need in the first stage a consumer acknowledges that they need a product or service the acknowledgment of need can arise from either an internal or an external stimulus an example of an internal stimulus might be hunger informing a consumer's pursuit of something to eat while an external stimulus could be an advertisement that appeals directly to a particular consumer the need in turn motivates a want which leads to curiosity about how to fulfill it for example a young girl named Jenny wants to work out with her friends and achieve a healthier lifestyle all her friends have a fitness tracking watch that allows them to challenge each other to accomplish a certain number of steps each day therefore she decides to purchase a fitness tracking watch stage 2 information search after having acknowledged their need for a product or service consumers now research the offerings available on the market research here encompasses a broad range of activities it often entails an active pursuit of information such as by searching online for reviews speaking with representatives and current users or testing products at retail establishments in other instances it may be more passive such as by viewing advertisements for example Jenny speaks with her friends who have Fitness tracking watches asking them for their opinion about the product specifically she asks what they like and dislike about the watch and inquires about its features she then visits the Retailer's website to understand the different options available to her and she reads various reviews about the product online stage 3 evaluation of Alternatives once a consumer learns more about a product or service that meets their needs they compare it with similar offerings from different retailers brands or models the consumer's initial research often serves as a baseline for the criteria they want as they search through the alternatives on the market they might look for points of contrast that differentiate one offering from another such as price quality features customizability brand awareness industry Trends availability etc for example to make sure that she's making the best decision for her needs Jenny goes online to look up alternatives to the fitness tracking watch that her friends have she finds three well-reviewed Alternatives and measures their qualities against those of the initial product one of the products is cheaper but doesn't provide the features she wants the other two are similar to the initial product but aren't available in the styler color she wants stage 4 purchasing decision in the fourth stage of the consumer decision-making process the consumer determines which product or service they want after all of their research and comparative shopping they've decided that a specific choice is the best one for them having done so they visit an online or in-store retailer and pay for their purchase for example based on her criteria Jenny decides that the initial Fitness tracking watch best suits her needs she returns to the Retailer's website and chooses her preferred color and style options a checkout she inputs her shipping information and credit card number Stage 5 post purchase evaluation the consumer has received and used the product or service they've bought thus they're now able to evaluate the product producer and retailer they may ask themselves questions such as did the product or service satisfy my needs am I happy with the product or service I've purchased what would I change in the product or service I've chosen how do I feel about the retailer Who provided the product or service if the consumer feels that their purchase was worthwhile they may engage further such as by leaving a review on social media recommending the product or service to others or making repeat purchases with the retailer for example one year later Jenny still uses her Fitness tracking watch she likes how it keeps her accountable for her health and motivates her to engage in healthy activities with her friends she gives a five-star rating and leaves a detailed user review on the online store's website she also decides that she wants to purchase from the same retailer in the future now we understand the five-stage consumer decision-making process please keep in mind that for companies it's important to understand the consumer decision-making process the benefits of understanding the consumer decision-making process include the following number one leverage against a competition 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 competitors number two knowledge about your customer base reflecting on the consumer decision-making process encourages you to consider key characteristics of your customer base which include their initial needs the communication channels they use to find products and what they value in terms of budget product design or quality you can use this knowledge to guide future marketing campaigns advertisements or product launches number three increased sales and customer base when you understand how a customer perceives a need you can provide more relevant marketing materials and distribution methods these can lead to a broader Market reach and therefore more Revenue all right that's all for today's topic if you have any questions regarding this video please leave your thoughts in a comment below I hope you guys have enjoyed this video and if you did make sure you give it a thumbs up and subscribe to my channel thanks for watching and I will see you next time