This chapter introduces the theoretical structure of this work. The customer’s purchase decision plays a major role in all of the statistical approaches. The following section presents a well-known purchase decision model. The new information source Google Trends will be introduced detailed in this chapter. Google Trends provides a tool that does not only explain present consumer behavior, it also can predict future collective behavior (Goel, 2010).
2.1 Decision Model for Purchases – Five-Stage Model
One of the main theories that are supporting the decision of using Google Trends is the Five-Stage model of the consumer purchase process which describes the consumption behavior in defined stages. This model plays a major role in consumer behavior and has been previously used in the car industry context (Shende, 2014). The stages are problem recognition, information search, evaluation of alternatives, purchase decision and post purchase behavior. Not all consumers will go through the whole process, due to differences in products, applications, behaviors and costs. This model however provides a good overall frame because it shows a full range of considerations that a consumer will face when making a new purchase. Next to giving an explanation of the different steps within the Five-Stage model, there will be an example that is related to the substance of this research.
Problem Recognition
The whole process starts with the consumer realizing a problem or need for some purchasable good; it may have been triggered internally or externally. An internal stimulus would be the waste of time to commute to work, the uncomfortable circumstance in public transportation or the lack of freedom and independency relying on public transportation. An external stimulus would be advertising which is triggering the need for a certain product, in this case a car. It could rely solely on convenience and need in the technical sense or as an item that provides certain utility. Those kinds of
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utility factors can be increased for some people with purchasing premium products (Kotler & Keller, 2016).
Figure 2.1 Five-Stage Model of the Consumer Buying Process (Kotler & Keller, 2016)
Information Search
There are two levels of engagement in information search. One is heightened attention, which is considered a milder search state. The other one is active information search that includes looking for reading material, online research or visiting stores to learn about the product. Typical information sources for consumers are personal (family, friends), public (social media), commercials (salespeople, displays, packaging, websites and ads) and experiences that come from handling a certain product. Sources that are
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reaching the consumer most effective are personal, experiential and public sources that are known for being independent authorities. (Kotler & Keller, 2016)
The process of information search is crucial for this work in order for the connection with Google Trends. Nowadays people, that do not have the access to experiential or personal information sources, rely on outside sources. Those have to be seen critical in behalf of distinguishing between an ad and an objective report. Talking to salespeople or getting information from commercials seem to be strongly biased since the instances involved have a direct profit from giving out positive information rather than negative information. Therefore the internet is a platform that offers various sources as well as the direct exchange of experiences with other consumers. Most people realized this and are using the accessible information online. Nonetheless it has to be seen critical by virtue of internet sources that might be highly biased.
The first approach to find solutions for an existing problem will create a larger set that contains different brands or products for a need. With further information gathering the sets will gradually decrease up to one product that fits the consumer’s needs the best.
Evaluation of Alternatives
The consumer has to compare competitive brands to make a final value judgment.
Taking a look at the concept helps to understand this process. The consumer is trying to satisfy a need and is also looking for certain benefits. With different brands, the consumer sees bundles with varying abilities to deliver the benefits (Kotler & Keller, 2016). Price, quality, pleasure, social status, reliability, maintaining costs, safety are some of the factors that altogether create the utility a consumer gets for a certain product. The weighting of such factors varies among consumers nationally and internationally. Also the choice of factors will vary among countries, cultures, geographical locations etc.
Imagining consumer A, who is looking for a car that brings him to work. He lives in Canada in an area with low density and long commuting routes. Consumer B lives in a
Figure 2.2 Successive Set Involved in Consumer Decision Making (Kotler, et al., 2016)
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even in winter. Consumer B on the other hand might not want any of those attributes in the first place. Small and convenient with a small turning circle to fit the parking situation in mega cities, automatic transmission to survive traffic jams without a cramp and low emissions to not fear any penalties within city areas. This simplified example of two different consumers shows how hard it is to generalize the utility function for consumers.Almost every attribute of a car, even the outside design, is varying among consumers.
Purchase Decision
During the previous stage the consumer collects preferences and forms a choice set among brands that may also lead to an intention of buying the most preferred brand. An important factor that can intervene between purchase decision and purchase intention is the attitude of others and unanticipated situational factors. Another person’s attitude might influence a consumer’s purchase decision heavily. Intensity of another person’s negative attitude toward our preferred product and the consumer’s own motivation to comply with other person’s wishes are giving the magnitude. Unanticipated situational factors such as losing a job or personal dislike of a sales person can erupt to change the purchase intention as well. Risk aversion or risk loving will also influence the purchase decision. Not performing to expectations, social risks such as embarrassment in front of others, high maintenance costs, financial burden and other uncertainties are factors that are leading to the perceived risk of a purchase decision (Kotler & Keller, 2016).
In the case of a car purchase all the mentioned factors under “Purchase Decision” are significant. Since cars are high-value goods, consumers are putting more time into the purchase decision and usually do not buy out of a shopping spree. With the internet it is enormously easy to get the opinion and experience of other people and groups about the preferred product. Those are much easier to obtain than many years ago.
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Nowadays there are high amounts of reviews, tests and opinions about any car model so that consumers are much more likely to get influenced on the way to their purchase.
Post purchase Behavior
This is a crucial point for any product. A satisfied consumer is more likely to purchase the product again and also tends to give out positive referrals of that product or the product’s brand. Personal information sources are rated highly effective and therefore it is from highest importance to keep the consumer happy and satisfied even after the purchase. Dissatisfied consumer may not only abandon or return a product, they can also take public action or warning other consumers (Kotler & Keller, 2016). Bad news usually spread wider than positive news due to the psychological fact that fear is stronger than the satisfaction a product might give. Some consumers will explore dislikes of a product of attribute that they have not recognized earlier. With the internet those information spread much faster, such as the recent cases of Samsung Galaxy Note 7 phones that are exploding. Even though this is a production error, it is now known by almost every single person that is interested in buying smartphones from any brand. Those “small” mistakes in the construction cost Samsung’s smartphone sector customers and reputation, even after years and several product lines of successful and safe phones.
In conclusion, with the background of a car purchase, it is important to further satisfy the consumer as long as he owns a certain vehicle. Any small disadvantages that do not occur at the competition have huge impacts on the overall reputation of the brand and future consumer purchase decisions.