The consumer decision process has 5 steps: Need Recognition; Information Search; Alternative Evaluation; Purchase; and Post Purchase. Purchase decisions typically go through these steps in order; however, some purchases such as habitual purchasing could start at need recognition and jump straight to purchase.
Various factors including the marketing mix, psychological factors, social factors, and situational factors as well as level of involvement could moderate the basic sequence of the consumer decision process. Below are a set of questions that will briefly explore these various factors and the nature of the purchase. The purchase decision involves shopping for a new residential property.
What type of product is it: convenience, shopping, or specialty?
Shopping for a brand new house to live in could be considered shopping for a specialty good. An environmentally minded individual, for instance, could be searching for a “green” home that employs the latest in technology: sewage heating, and solar powered electrical systems. These innovative features would be provided by contractors who have the design plans and expertise to make the right installations. New to the world green homes would be limited in supply, especially if these were housing demonstration projects. Affluent innovators (first consumer type to purchase any new product) would be the first to purchase and test these pilot projects. Positive responses from the innovator class would encourage market acceptance. If the purchaser were an early adopter consumer, he or she would have to wait for consumer feedback on these green homes. The alternative would be to seek out a consultant or the developing group. In these cases the purchaser would have to expend a great deal of time or money to determine the match between product benefits and his or her needs.
Shopping for real property entails a great deal of risk. Real properties involve financial risk as they are big ticket items and if a transaction were negotiated poorly, the price paid could be substantially over fair value; this could lead to heavier mortgage loan payments. Performance risk is also an issue when misrepresentation or non-disclosure of defects occurs during unscrupulous sales; for example, many sales included homes hiding aesbestos in the attics. Also, inappropriate design such as in the “Leaky Condo Crisis” in which desert style construction was chosen for a temperate rainforest climate, would severely compromise the home to weather damage-a form of performance risk. Locational risk is also a possibility as purchasing a home downwind from an industrial polluting site, for instance, could be a bad choice-this would negatively impact health and lower the long term value of the investment.
In light of the many risks that go along with big ticket purchases, it is likely that real property purchasers are highly involved in their search for information. The product would, therefore, be a specialty good.
What factors will influence your search?
Psychological factors: A purchaser having grown up in a Tudor Style mansion could have a positive attitude-an affinity-towards that architectural style and size; the purchaser may want her children to grow up in a similar property type.
Product requirements: A rancher would choose a farm house design-one that was in vogue for the farm lifestyle- and large tracts of range lands for his livestock to graze.
Social Factors: Input from family members would also influence the search. The residential property should have a good floor plan and rooms of adequate size and number to suit household children. The shopper would include his spouse in making family oriented purchases.
Purchase Situation: Affluent retirees would, for example, like to purchase an exotic vacation home, say, in any of the many sun-belt cities to visit during certain times of the year. This purchase situation is atypical and made only for a special occasion-to facilitate the rite of passage in becoming a senior retiree.
What would be your evaluative criteria?
a) Personally, I would choose a home with a good functional layout-I call this “Feng Shui”, which is adapted from Chinese superstitious beliefs in harmony of the elements. A good floor plan, for example, would not have a washroom entrance facing a kitchen; b) I would look for an appealing exterior- an architectural design that blends in well with the neighborhood; c) Well maintained electrical, air-conditioning, and sanitary sewer, and potable water systems are must-haves; d) New roofing would be nice; e) Interior finishes should be well maintained; f) A clear title free from all encumberances; g) No Indian Burial grounds or anthropological relics underneath the improvements; h) No history of murders or ghostly hauntings should be included with the purchase.
What might cause post purchase dissonance?
Several possibilities could lead to buyer’s remorse: non-disclose of defects such as pest infestations (structural or foundation damage, white ants, roaches, rats, bigfoot, aliens etc.); the price paid was poorly negotiated and too high in retrospect; the location stinks from noise pollution such as airplanes, and traffic, or from crime.
What could be done to reduce your dissonance?
Other good qualities in the home could offset imperfections. Good qualities such as a trendy exterior façade plus modern landscaping would build good curb appeal. An attractive home is sure to earn the admiration of friends, relatives and visitors. Also, if the price negotiated were a steal, then any negative aspect would be fairly offset by the reduction in cost, bringing some comfort.