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Reimagining the Consumer Decision Journey

The internet has transformed many aspects of life over the last three decades. Individuals in the United States and across the globe now use computers or mobile devices to communicate with friends, family, and strangers; look for information; purchase products; and perform a host of other everyday activities. In 1990, for example, less than 1 percent of the U.S. population was online. By 2015, this percentage had increased to 75 percent and by 2019 the overwhelming majority, nearly 90 percent, of American adults used the internet. Americans also increased the time they spent online, from a weekly average of 9.4 hours in 2000 to 23.6 hours in 2016. In 2018, more than three-fourths (77 percent) of Americans were online on a daily basis.  

The Purchase Funnel

Unsurprisingly, the internet has fundamentally altered the consumer decision-making process. This shift has led many marketing professionals to rethink the foundational framework that has been widely used to conceptualize consumer purchasing behavior for many decades. Specifically, since the early 1900s, marketing experts have used the “purchase funnel” to describe the stages that consumers pass through to buy products and services.

The Purchase Funnel

Generally, the stages of the purchase funnel are as follows:

  1. Problem recognition: Consumers identify a need and seek a product to fill that need.

  2. Information search: Using various sources of information, consumers research products that might satisfy their need.

  3. Evaluation of alternatives: Consumers evaluate brands they are considering and decide on the brand they intend to purchase.

  4. Purchase decision: Consumers may adjust their intentions based on a host of situational factors; ultimately, they execute a purchase.

  5. Postpurchase: Consumers’ satisfaction with the product affects whether they will buy it again in the future.1

Traditionally, this process has been described as a funnel because consumers were assumed to proceed down a linear path that started with many brands and products that might fulfill their need (at the broad top of the funnel). As they move closer to purchase, consumers sequentially decrease the number of products they might buy until, ultimately, they make a final decision (at the narrow bottom of the funnel).2

While this kind of thinking can have merit, the growth of the internet in everyday life has dramatically changed the way consumers make purchasing decisions.3 For example, before the internet became ubiquitous, most consumers did not have access to hundreds of product reviews or search engines to price shop, and had only a handful of local retail establishments for many goods.

The Decision Journey

To account for this increasing complexity, marketing scholars and practitioners have reimagined the purchase funnel. Now, many marketing professionals use the framework of a “decision journey” to describe consumers’ decision-making processes.4 Consumers on a decision journey are not assumed to sequentially eliminate brands and products that may satisfy their needs; instead, consumers go through cycles in which some products that they initially considered may be eliminated, but other products may be added to the consideration set even if consumers did not consider these products initially:5

The Decision Journey

Given the shift in consumer purchasing behavior, marketing practitioners have had to adjust their traditional thinking and adapt to the new options that consumers have for shopping. One of the most critical aspects of this is acknowledging who controls the marketing message.

Previously, marketers were in charge of the process, exerting more control over both the message itself and how it was received by consumers. Today, consumers have more control regarding the messages they hear and the means to receive them. For example, today’s consumers have the ability to receive information and insights from other consumers, and they may rely heavily on online reviews and other electronic word-of-month (sometimes called “eWOM”).

Furthermore, the emergence of search engines has resulted in dramatic differences in how consumers actively search for information and make purchase decisions. These new ways of obtaining information limit the effectiveness of “one size fits all” marketing messages. Consumers now play the lead role because they have the ability to “pull” information, reducing the marketer’s ability to “push” information.

The development of the decision journey framework has also contributed to the understanding that the journey for a given consumer for the same good can vary from situation to situation. And, of course, the journey for one consumer who purchases a product can be very different from the journey taken by another consumer who purchases the exact same product.

An Example of the Decision Journey for an Automobile

An example can illustrate the complexities of decision-making under the decision journey framework as compared to the purchase funnel framework. Imagine Chris, a consumer in today’s market searching for a vehicle. On the journey towards an automobile purchase, Chris initially considers a set of vehicles comprising those she has previously owned and had positive experiences with. However, instead of restricting her consideration set to known options, Chris begins to research other vehicles. For example, Chris may email dealers who display their inventories online for more information, or she may read one of many third-party review websites. Chris may also search social media sites and glean information from both her own friends and family and strangers whose experiences she finds instructive.

Through this research process, the number of options in Chris’s consideration set may increase, decrease, or stay the same. When it comes time to select a specific vehicle, Chris may go with a dealer she previously identified online, or visit one or many in person. After these interactions, which may also increase or decrease the number of vehicles being considered, Chris may conduct further real-time research on her smartphone to compare features and prices. She might also navigate to websites that advertise rates for car loans instead of being limited to the dealership’s finance department—some of these websites may point her to yet more vehicles. After completing her purchase, Chris may continue to conduct research on her vehicle by visiting general or model-specific enthusiast websites. Thus, the winding journey that led Chris to her ultimate purchase was affected by many complex factors and, in fact, continued after the actual purchase.

Implications for Litigation

The consumer decision journey framework has many important implications for litigation. For example, it is important to consider the various types of information sources that consumers are exposed to and whether and to what extent this information affects an individual’s purchase decision. Furthermore, one can analyze the relative importance of manufacturer advertising or specific advertising claims as compared to content generated by consumers themselves. Finally, experts should carefully examine the appropriateness of analytical methods that may not allow for the richness of the products and brands that consumers may consider at various stages of the consumer decision journey.

Footnotes

1 P. Kotler and K. Keller, Marketing Management, 14th ed. (Prentice Hall, 2012), 172–180.
2 Kotler and Keller (2012), 172–180; D. Court et al., “The Consumer Decision Journey,” McKinsey & Company, June 1, 2009, https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/the-consumer-decision-journey (“McKinsey Consumer Journey”).
3 “The Evolution of Consumer Behavior in the Digital Age,” Medium, November 16, 2017, https://medium.com/analytics-for-humans/the-evolution-of-consumer-behavior-in-the-digital-age-917a93c15888; McKinsey Consumer Journey.
4 McKinsey Consumer Journey; R. Divol, D. Edelman, and H. Sarrazin, “Demystifying Social Media,” McKinsey Quarterly, April 1 2012, https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/demystifying-social-media.
5 Chart reproduced from McKinsey Consumer Journey, Exhibit 2.

Copyright ©2020 Cornerstone ResearchNational Law Review, Volume X, Number 266
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Ceren Canal Aruoba Economic and Financial Analysis Cornerstone Research
Principal

Ceren Canal Aruoba provides economic and financial analyses for complex business litigation matters involving pharmaceuticals, healthcare, intellectual property, marketing, and antitrust issues. She supports clients and experts through all phases of litigation, including deposition and trial. Ms. Canal Aruoba has worked on the design and implementation of consumer and professional surveys.

Pharmaceuticals and healthcare

Ms. Canal Aruoba has expertise in average wholesale price (AWP) litigation for both branded and...

202-912-8962
Ashish A. Pradhan Intellectual Property & Finance Cornerstone Research Los Angeles, CA
Principal

Ashish Pradhan has more than a decade of experience working on complex intellectual property and finance matters, as well as consumer fraud and product liability cases. He has consulted on high-profile matters and supported experts in state and federal courts, as well as mediation and arbitration. Mr. Pradhan has analyzed matters in the automobile, entertainment, music, retail, social networking, high tech, and video game industries.

Intellectual property

Mr. Pradhan’s expertise spans a wide variety of intellectual property issues, including patents, copyrights, trademarks, and trade secrets. In particular, he has consulted on cases involving lost economic profits, liability issues, and reasonable and nondiscriminatory (RAND) royalties. Mr. Pradhan analyzed lost profits and reasonable royalties in Activision v. Electronic Arts, a breach of contract case involving the publisher and developers of the video game “Call of Duty.” In addition, he has worked on landmark cases such as Move Inc. v. Zillow Inc. and Microsoft v. Motorola.

Consumer fraud and product liability

Mr. Pradhan has worked on multiple product liability matters involving alleged automotive defects. He has evaluated survey data and other market-based research to determine the scope and impact of the alleged defects. In addition, he has addressed alleged misrepresentations in cases involving consumer products and mobile phones.

Finance

In corporate transaction litigation, Mr. Pradhan has expertise with various valuation methodologies, including discounted cash flow, transaction multiples, and public comparables. He has estimated damages in a putative class action against a mortgage originator. Mr. Pradhan has consulted on many cases related to residential mortgage-backed securities, focusing on due diligence, corporate governance, and the materiality of alleged misstatements and nondisclosures.

Marketing

Mr. Pradhan has substantial expertise with a range of marketing analyses related to consumer behavior, advertising, branding and brand value, and customer profitability.

213.553.2521
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