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The following literature review aims at exploring the current approaches to studying consumer behavior and locating gaps and discrepancies in theory. The acknowledgment of gaps is important because in the contemporary dynamic environment the inability to predict and control customer behavior usually leads to economic issues. The review compares the traditional five-step model to the proposed alternatives and provides an in-depth view of the factors and methodologies used in the studies. The articles from credible peer-reviewed scholarly sources are preferred to warrant consistency. Each objective is reviewed in a separate chapter.
The Traditional Approach
The most recognized model of consumer decision making is the so-called “five-step” model. It does not have specific and well-defined stages – instead, it is described with the generalized “steps” which are modified and altered in different sources. The robustness, flexibility, and simplicity of the model are responsible for its popularity and constant usage in research.
The first stage is the recognition of a problem, at which the consumer is acknowledging the difference between the actual state and the desired one. According to Bruner and Pomazal (2013), this stage is often neglected in the studies, and its use is limited to the definition. At the same time, they point to the fact that the problem recognition is a complex and multi-layered process and depends on several causes, may develop depending on the chosen consumer actions, and is influenced by the variety of factors, with reference groups, novelty, and thinking is the most common ones (Bruner & Pomazal, 2013).
The next step is information search when the consumer is inquiring about the desired product or service. Traditionally, the search consisted of the interpersonal communication, relevant personal experience, and various types of media, with the social media and other Internet resources becoming dominant nowadays (Hugstad, Taylor, & Bruce, 2013). Hugstad et al. (2013) also note that aside from the availability of sources and the capability for processing information, factors such as social class and perceived risk noticeably affect the outcome.
After the information is gathered, the customer is considering the alternatives. While some scholars tend to include this into the research process, others argue that this is a necessarily separate stage which includes distinct elements. For instance, Samiee, Leonidou, Aykol, Stöttinger, and Christodoulides, P. (2016) point to the fact that the alternatives are influenced by cultural issues and are relatively more biased compared to the more impartial information gathering process. This effect becomes more prominent with the gradually growing impact of globalization and diversification of markets leading to the more noticeable cultural background required for decision making.
Once the decision is formed, the customer then proceeds to the making a purchase (executing a transaction in some sources). This stage is also debatable since different scholars assign different meanings to it. For instance, a study by Bruwer (2013) describes the outcomes of the buying behaviors of the visitors of a wine festival in the Hawke’s Bay Region. The findings by Bruwer (2013) suggest the transaction occurs is influenced by the first-time and repeat visitor dynamic. While it can be viewed as the availability of previous experience, the external factors such as the environment (the customers around the newcomer) are also altering the buying behavior.
The final step is a post-purchase behavior. This stage is also not recognized uniformly, as some scholars are assigning it relatively insignificant weight while others are describing it as important in future purchases. It notably coincides with the previous experience factor (a part of the second and third step) but requires a purchase of a similar product as a prerequisite. A study by Cook and Yurchisin (2016) evaluates the adverse effects of impulsive purchases driven by scarcity and perishability of goods and conclude that these effects are measurable, predictable, and can be mitigated by appropriate pricing strategies.
The review of the stages reveals that some of the steps include similar characteristics and, in some cases, their importance is not conclusively established, which is a reason for doubt of relevance of the five-step model. Besides, some of the scholars suggest that the flexibility and universal applicability of the said model do not guarantee the personalized approach which is required for certain markets. Finally, some experts suggest that the steps are rarely consecutive and are frequently intertwined, mutually influenced, and thus not easily distinguishable. For instance, Rayburn and Voss (2013) suggest a model based on four atmospheric constructs. A combination of the perceived overall atmosphere and style holistically influence the customer’s decision rather than gradually (Rayburn & Voss, 2013).
Other researchers tend to prioritize cognitive processes (the approach known as a cognitive model). Bartels and Johnson (2015) provide evidence that cognitive perception underlies the majority of decisions and processes consumers are engaged in and suggests that these processes shape the social and economic environment. Thus, it is possible to assume that the mechanisms which can alternate cognitive background may also change the whole perspective without the need to address every single step.
A good example of the specialized model that aims at covering a specific area rather than account for the multitude of fields is a dual system suggested by McCabe and Chen (2016), who state that the tourism services are built on the wrong assumption of customers as rational decision-makers and point to the constructive nature of their preferences and several contextual psychological factors which differentiate them from other consumers. Finally, findings from a study by Wooliscroft, Ganglmair-Wooliscroft, and Noone, A. (2013) suggest a model based on a hierarchy of ethical choices. While not conclusive, their suggestion is built upon the tendency among customers of New Zealand to include sustainability and other ethical concerns into the decision-making process.
Factors Influencing Consumer Behaviour
As was noted above, a range of factors influences the decision-making on every step of the process. Samiee et al. (2016) prioritize cultural factors as contributing to the alternative selection process while Wooliscroft et al. suggest ethical factors as significant. These factors are commonly categorized as internal and external. Internal are experience, emotions, and attitudes (Pavel & Vlad, 2016), and are featured throughout the stages in the majority of approaches.
However, their weight is unclear. A study by Lin and Huang (2012) shows that the values which define consumer choices depend on personal ethical beliefs. Shavitt and Cho (2016) highlight horizontal (collectivist) and vertical (individualist) social structures, closely connected to the cultural factors, and state that the market behaviors and motives, e.g. spending to help others, are visibly influenced by these factors and suggest several ways of modeling the possible outcomes and trends. It should be noted that at least some of these factors can be assigned different categories depending on the source (Samiee et al., 2016).
The majority of studies highlighted in the literature review utilize an ethnographic approach. The methodologies most frequently include the surveys and questionnaires (Bruwer, 2013; Hugstad et al., 2013; Lin et al., 2012; Pavel & Vlad, 2016; Rayburn et al., 2013; Shavitt & Cho, 2016). In some cases, observation and review of previously available data are utilized (Bartels & Johnson, 2015; Bruner & Pomazal, 2013; Cook & Yurchisin, 2016; McCabe & Chen, 2016; Wooliscroft et al., 2013).
These two methods are preferred for two reasons. First, the relative influence of the internal and external factors discussed in the previous chapter is not conclusively established, and, as a result, can not be definitively measured. On the other hand, the outcome of the said behavior can be directly observed and quantitatively assessed by obtaining expenditure and purchase data. While not being a sole indicator, it is still reliable enough to produce meaningful data that can be compared against other readings.
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Second, while there is no consensus regarding the importance of each factor, most authors recognize at least one of them and include them in their models. The majority of factors are already thoroughly studied in the field of ethnography and thus can be assessed by the readily available tools. Finally, the majority of findings can only be made through direct observation since the multitude of factors creates a system that is complex enough to be accurately modeled in its entirety.
Currently, the traditional five-step model is still in wide use among scholars and managers alike. While there are reasons to seek alternatives in some cases, such as in particular fields, it is still robust enough to provide meaningful results. Despite the speculations on the vagueness of the traditional approach, most of the models eventually rely on the same factors which are often organized differently. Thus, it is necessary to minimize the number of unnecessary theories and instead locate essential components to decrease complexity. In my opinion, the focus on cognitive perception provides an overview of how such simplification can be achieved. Thus, it is necessary to thoroughly test this hypothesis and seek for other fundamental components to improve the overall picture.
Bartels, D. M., & Johnson, E. J. (2015). Connecting cognition and consumer choice. Cognition, 135(2), 47-51.
Bruner, G. C., & Pomazal, R. J. (2013). Problem recognition: The crucial first stage of the consumer decision process. Journal of Consumer Marketing, 4(2) 41-46.
Bruwer, J. (2013). Service quality perception and satisfaction in a New Zealand festivalscape: Buying behavior effects. Tourism Analysis, 18(1), 61-77.
Cook, S. C., & Yurchisin, J. (2016). Post-purchase drama: Do the retailers lose from girls gone wild in fast fashion environments?. Marketing Engagement 118(1), 309-310.
Hugstad, P., Taylor, J. W., & Bruce, G. D. (2013). The effects of social class and perceived risk on consumer information search. Journal of Services Marketing, 38(4), 312-330.
Lin, P. C., & Huang, Y. H. (2012). The influence factors on choice behavior regarding green products based on the theory of consumption values. Journal of Cleaner Production, 22(1), 11-18.
McCabe, S., & Chen, Z. (2016). Time for a radical reappraisal of tourist decision making? Toward a new conceptual model. Journal of Travel Research, 55(1), 3-15.
Pavel, C., & Vlad, F. (2016). Modern retail and its influence on consumer behavior. Quaestus, 43(9), 89.
Rayburn, S. W., & Voss, K. E. (2013). A model of consumer’s retail atmosphere perceptions. Journal of Retailing and Consumer Services, 20(4), 400-407.
Samiee, S., Leonidou, L. C., Aykol, B., Stöttinger, B., & Christodoulides, P. (2016). Fifty years of empirical research on country-of-origin effects on consumer behavior: A meta-analysis. Essentiality of Marketing, 18(2), 505-510.
Shavitt, S., & Cho, H. (2016). Culture and consumer behavior: the role of horizontal and vertical cultural factors. Current Opinion in Psychology, 8(2), 149-154.
Wooliscroft, B., Ganglmair-Wooliscroft, A., & Noone, A. (2013). The hierarchy of ethical consumption behavior: the case of New Zealand. Journal of Macromarketing, 32(3), 341-355.