By Rachita Jayswal, Lecturer.

Consumer Decision Making

What is Decision????

A decision is a choice between two or more

alternative actions or behaviors
 For Example: A housewife goes to purchase a
mid priced range of tea, than making a
selection from the various brands of tea like
Taj Mahal, Tata Tea, Red label, Yellow label,
etc. than she is making decision.
 Consumer Decisions

Consumer decisions are decisions

consumers make in the marketplace
involving:
 whether to purchase
 what to purchase
 when to purchase
 from whom to purchase
 how to pay for the purchase
Continuum of consumer buying decisions

Routine Limited Extensive

Involvement Low Low to High

moderate

Time Short Short to Long

moderate

Costs Low Low to High

moderate

Information Internal only Mostly internal Internal and

search external

Number of One Few Many

alternatives
Marketer’s Role in Different Types
of Consumer Buying Decision
 Routinized Response Behavior:
 Marketer must continue to provide satisfaction to the
existing customer
 Marketer must attract new customer by using
promotional schemes and introduced new features
to the product.
 Limited Problem Solving:
 Marketer should design the communication
programme that will help
▪ The buyer to gather more information,
▪ Increase his brand comprehension and
▪ Gain confidence in the brand.
Marketer’s Role in Different Types
of Consumer Buying Decision
 Extensive Problem Solving:
 Marketer must educate the prospective buyers
▪ About the attributes of the product,
▪ Their relative importance and
▪ High standing of the marketer’s brand on brand
attributes.
 So, the marketer should do marketing
communication which help the consumer to
evaluate and feel good about his / her brand
choice.
 Input
 Input Factors are:
 Marketing mix activities of organization (Marketing
Inputs)
 Socialcultural Influences (Socialcultural Inputs)
Marketing Input
 Marketing stimuli consist of 4 P’s
 Marketer are interested in knowing how consumer will
respond to various stimuli.
 These may be in the form of:
 Product feature site
 Packages
 Suitable prices
 Mass media advertising
 Personal selling
 Direct marketing
 Selection of suitable distribution channel
Socialcultural Input

 It non-marketing influences the consumer

purchase decision.
 Social Cultural factors includes the family,
social class, culture and sub culture, informal
sources and other non commercial sources.
 For Example: the comment of a friend, an
editorial in the newspaper, usage by a family
member, an article in Consumer Reports or
the view of an experienced customer.
Process
 Process component of the model is concerned
with how consumer make decisions.
 The psychological field represent internal
influences that affect consumer decision
making processes.
 what they need or want
 Their awareness of various product choices
 Their information gathering activities
 Their evaluation of alternatives
Consumer Decision-Making Process
consist of three stage

Need
Need Recognition
Recognition

Information
Information Search
Search

Evaluation
Evaluation of
ofAlternatives
Alternatives

Chapter 5 Version 6e 11
Need Recognition

 Consumer recognized
need when they face
problem.
 Among consumer there
are varied types of need
or problem recognition:
 Actual state type of
problem
 Desire state consumer
Types of Need or Problem

 Actual State consumer: This occur when

product is not performing satisfactorily.
 Ex.: The housewife may realize that the mixer
she was using doesn’t grind properly.
 Desired state consumer: The consumer may
experience the desire for something new.
 Ex.: A newly married man desire to possess a
motor – cycle.
Types of Need or Problem

 Simple problem recognition: Need that occur

frequently and can be dealt with automatically.
 For Ex.: Feeling thirsty and not having “Pepsi”.
 Complex problem recognition: Need occur over
a period of time and the actual and desire state
gradually move apart.
 For Ex.: a man who was driving a scooter for
many years consider selling it and going for new
scooter so as to reduce the maintenance charges.
 Need Recognition

Marketing helps
consumers recognize
Internal Stimuli
an imbalance between and
present status and External Stimuli
preferred state
Preferred State

Present Status
Stimulus
Any unit of input affecting one or
more of the five senses:
sight
smell
taste
touch
hearing

Chapter 5 Version 6e 16
Pre Purchase Search
 Consumer gathers information related to their attainment of the desired
state of affairs

 Internal search – a passive approach to gathering

information in which the consumer’s own memory
is the main source of information about a product

 External search – a proactive approach to gathering information in which

the consumer collects new information from sources outside the
consumer’s own experience

Non-marketing-controlled Marketing-controlled
Pre Purchase Search

Sources of Information
Marketer Controlled Nonmarketer Controlled
 Advertising  Friends and family
 Salespersons  Past experience
 Brochures  Public information
 Store displays  Experts
 Company Web sites  Internet
Search Strategies

Systematic search involves a comprehensive

search and evaluation of alternatives
 Extended problem solving
 Limited problem solving

Heuristic search involves the use of quick rules

of thumb and shortcuts
 Routine problem solving
Search Efforts
The amount of search depends on:
 Perceived risk
 Involvement
 Familiarity and expertise
 Time pressure
 Nature of the product
 Amount of information overload

If perceived risk is high than complex information

search and when the perceived risk is low than
consumer likely to use very simple and evaluation
techniques.
Information Search depends on
Situational Factors

Experience
Social Acceptability of the product
Value related consideration
Evaluation of Alternatives

 For evaluation consumer tend to use two

types of information:
 List of brands that they plan to make their
selection (The Evoked Set)
 The criteria they will use to evaluate each
brand
The Evoked Set
ALL Brands

Known Brands Unknown

Acceptable Unacceptable Indifferent Overlooked

Brands Brands Brands Brands

Purchased Not purchased

Brands Brands
Perceptual Problems in the Four
Terminal Problems
 Unknown Brand: Consumer selective exposure in
to advertising media and selective perception of
advertising stimuli.
 Unacceptable Brands: Poor qualities or
inappropriate positioning in advertising or product
characteristics.
 Indifferent Brands: Perceived as not having
special benefit.
 Overlooked Brands: Not clearly positioned or
sharply targeted at the consumer market segment
Marketer's role

 Promotional technique should be deigned to

impart favorable and relevant product image
to the target consumers.
 Change in product features or attributes.
 Invite consumers in a particular target
segment and try to put in their evoked ser
Criteria Used for Evaluating Brands
 Consumer Decision Rule referred as:
 Heuristic evaluation – choosing among alternatives
without formalized steps to arrive at a decision
 Such as the use of intuition
 Simply choosing by relying on a “gut-level feeling”

 Systematic evaluation – choosing among alternatives

by using a set of formalized steps to arrive at a decision
 Multiattribute model: highest overall judgment
 Linear compensatory: global score
 Lexicographic approach: rank order attributes
Formal Choice Models

Consumer Decision rules are broadly classified

into two major category:
 Compensatory model

 Noncompensatory models
 Conjunctive model
 Disjunctive model
 Lexicographic model
Compensatory Model

 With the compensatory model the

consumer arrives at a choice by
considering all of the attributes and
benefits of a product or service and
mentally trading off the alternative’s
perceived weakness on one or more
attributes for its perceived strength on
other attributes
 Performance Levels on Evaluative
Criteria for Six Notebook Computers
Evaluative Alternatives
Criteria

WinBook HP Compaq Dell IBM Toshiba

Price 5 3 3 4 2 1
Weight 3 4 5 4 3 4
Processor 5 5 5 2 5 5
Battery life 1 3 1 3 1 5
After-sale 3 3 4 3 5 3
support

Display 3 3 3 5 3 3
quality
 Evaluation of Six Notebook
Computers
Using a Compensatory Model
Evaluative Importance Alternatives
Criteria Score
WinBook HP Compa Dell IBM Toshiba
q
Price 30 5 3 3 4 2 1
Weight 25 3 4 5 4 3 4
Processor 10 5 5 5 2 5 5
Battery 05 1 3 1 3 1 5
life
After-sale 10 3 3 4 3 5 3
Support
Display 20 3 3 3 5 3 3
Quality
Total 100 370 34 370 385 300 295
Noncompensatory Models
 With Noncompensatory Models a
strength on one attribute cannot offset a
weakness on another attribute
 Evaluation of Notebook Computers
Using the Conjunctive Model
Evaluative Minimum Alternatives
Criteria Standard
s
WinBook HP Compa Dell IBM Toshiba
q
Price 3 5 3 3 4 2 1
Weight 4 3 4 5 4 3 4
Processor 3 5 5 5 2 5 5
Battery 1 1 3 1 3 1 5
life
After-sale 2 3 3 4 3 5 3
Support
Display 3 3 3 3 5 3 3
Quality
 Evaluation of Notebook Computers
Using the Disjunctive Model
Evaluative Minimum Alternatives
Criteria Standards

WinBook HP Compaq Dell IBM Toshiba

Price 5 5 3 3 4 2 1

Weight 5 3 4 5 4 3 4

Processor Not critical 5 5 5 2 5 5

Battery life Not critical 1 3 1 3 1 5

After-sale Not critical 3 3 4 3 5 3

Support

Display 5 3 3 3 5 3 3
Quality
 Evaluation of Notebook Computers
Using the Lexicographic Model
Evaluative Rank Alternatives
Criteria

WinBook HP Compaq Dell IBM Toshiba

Price 1 5 3 3 4 2 1

Weight 2 3 4 5 4 3 4

Processor 4 5 5 5 2 5 5

Battery life 6 1 3 1 3 1 5

After-sale 5 3 3 4 3 5 3
Support

Display 3 3 3 3 5 3 3
Quality
 Decision Outcomes

Choice Model Brand Choice

Compensatory Dell
Conjunctive HP, Compaq
Disjunctive Dell, Compaq,
WinBook
EBA Dell
Lexicographic WinBook
 Examples of Decision Rules
Decision Rule Mental Statement
Compensatory Rule “I selected the computer that came
out best when I balanced the good
ratings against the bad ratings”

Conjunctive Rule “I selected the computer that had

no bad features.”

Disjunctive Rule “I picked the computer that excelled

in at least one attribute”

Lexicographic Rule “I looked at the feature that was

most important to me and chose
the computer that ranked highest
on that attributes.”
Lifestyle as consumer decision
strategy
 An individual’s family’s decisions to be
committed to a particular lifestyle.
 For Example: Devoted follower of a particular
religion.
Incomplete Information and Noncom
parable Alternative
 Consumer decision process can also be
influenced by Incomplete information and
Non Comparable alternatives.
 There are strategies to cope up with missing
information:
 Consumer may delay decision
 Consumer may ignore missing information and
decide to continue with current decision
 Consumer may construct the missing information
(Output) Purchase Decision

 Three types of purchases:

 First time or trial purchase (Ex.: Detregent)
 Repeat purchase
 Long term commitment purchases
 In case of durable goods like refrigerators,
Washing machines, Ovens, etc. consumer
directly move to long term commitment
Purchase Decision
 When buying the product/service, the consumer may make choices
 From whom to buy: determined by seller’s terms of sales, past
purchase experience, return policy, etc
▪ store choice: deciding to purchase from a particular outlet
▪ non-store choice: deciding to purchase from a catalog, the
Internet,
or variety of mail-order possibilities
 When to buy: determined by whether product is on sale,
manufacturer offers a coupon/rebate, store’s atmosphere,
salesperson persuasiveness, etc.

 Purchase decision can also be influenced by

 Attitudes of others (e.g. friends, other customers)
 Unexpected situational factors (e.g. no cash or credit card for
payment)
 Purchase decision

Choice Purchase Purchase

identification intent implementation
Post-purchase evaluation
Exit
Future response Voice
Loyalty

Satisfaction/dissatisfaction

Experience evaluation

Decision confirmation
Outcomes of Post Purchase Evaluation

 Neutral feeling: Actual performance

matches expectation.
 Positive Disconfirmation of Expectation:
Performance of product exceeds expectation.
 Negative Disconfirmation of Expectation:
Performance of product falls below
expectation.
Cognitive Dissonance

 Consumer may adopt the one of the following

strategy in order to reduce their cognitive
dissonance:
 Rationalize that decision is wise
 Look out for advertisement to support their
choice an avoid competitive brand.
 Persuade friends or neighbors to buy same brand
and confirm their own choice.
 Turn to other satisfied owners for their
reassurance.
 Post-purchase evaluation
Role of Expectations in Satisfaction/Dissatisfaction
Actual Pre-purchase Actual Pre-purchase
Performance Expectations Performance Expectations

Dissatisfaction Satisfaction
Feedback of consumer

 If the product performs as per consumer

expectation than the consumer buy it again.
 If product performance is disappointing of
below expectation than consumers will look
out for alternative products or brand in
future.