UNIT-4

Each of the components of the Consumer Decision Making Process in detail,

covering Problem Recognition, Information Search and Evaluation, Outlet

Selection and Purchase, Post-Purchase Behavior, Customer Satisfaction, and

Customer Commitment.

Problem Recognition:

The consumer decision-making process begins with problem recognition, where a

consumer identifies a need or a problem that can be resolved through a purchase.

This recognition can be triggered by various factors, both internal and external.

● Internal Triggers: These are needs that arise from within the consumer,

such as physiological needs (hunger, thirst), safety needs (security

concerns), social needs (belonging, love), esteem needs (recognition, self-

esteem), and self-actualization needs (personal growth, fulfillment). For

example, a person might recognize the need for a new phone because their

current one is outdated and unreliable.

 ● External Triggers: These are stimuli from the external environment that

prompt consumers to recognize a problem or need. They can include

advertising, social influence, and environmental factors. For example, an

advertisement for a new smartphone may make a consumer realize that their

current device lacks certain features.

The recognition of a problem or need is a crucial starting point in the decision-

making process because it sets the consumer on a path to search for a solution.

Information Search and Evaluation:

Once a consumer recognizes a problem or need, they typically engage in an

information search and evaluation process. This stage involves gathering

information from various sources and assessing available options. Here's a detailed

look at this step:

● Information Sources: Consumers seek information from various sources,

including:

● Personal Sources: This includes advice from friends, family,

colleagues, or peers who have relevant experience or knowledge.

● Commercial Sources: These are marketing communications from

companies, such as advertisements, salespeople, and websites.

 ● Public Sources: Information from public sources, such as reviews,

consumer reports, and government agencies.

● Experimental Sources: Personal experience with a product or

service, such as test-drives, trial use, or samples.

● Types of Information Sought: Consumers look for different types of

information during the search phase:

● Product Information: Details about the product or service itself,

including features, specifications, and pricing.

● Brand Information: Information about various brands, their

reputation, and brand-specific attributes.

● Retailer Information: Details about where and how to make the

purchase, including store location, online options, and promotions.

● Price Information: Information related to the cost of the product or

service, discounts, and any available financing options.

● Consumer Reviews and Opinions: Feedback and reviews from other

consumers who have already purchased the product or service.

 ● Evaluation of Alternatives: Once consumers gather information, they

evaluate the available alternatives. They consider factors such as:

● Product Attributes: Comparing the features and specifications of

different products or services.

● Price: Assessing the cost and value for money.

● Brand Reputation: Considering the trustworthiness and quality

associated with different brands.

● Consumer Reviews: Factoring in feedback and experiences shared by

other consumers.

● Personal Preferences: Considering individual preferences and

priorities, which may vary from person to person.

This phase involves a careful and often extensive process of information collection

and evaluation, as consumers aim to make an informed decision that aligns with

their needs and preferences.

Outlet Selection and Purchase:

Once the consumer has completed the information search and evaluation process,

the next step in the decision-making process is outlet selection and purchase. In
this phase, the consumer decides where and how to make the purchase. This

involves a number of considerations:

● Retailer Choice: The consumer may choose to purchase from a physical

store, an online retailer, or a specific brand's website. This decision can be

influenced by factors such as location, convenience, and trust in the retailer.

● Payment Method: Consumers also need to decide how they will pay for the

product or service. This could involve cash, credit cards, mobile payment

apps, financing options, or other methods.

● Product Configuration: Depending on the product, consumers may have

options to configure or customize their purchase. For example, they might

choose specific features, colors, or accessories.

● Negotiation: In some cases, particularly for high-value items, consumers

may engage in negotiation with the seller to secure a better price or

additional benefits.

● Purchase Decision: The ultimate purchase decision is made, and the

consumer acquires the product or service.

The outlet selection and purchase phase marks the culmination of the decision-

making process. The consumer has chosen a specific product, evaluated their

options, and taken the step to acquire it.

Post-Purchase Behavior:

The post-purchase behavior stage comes after the purchase has been made. This

phase is essential as it has implications for the consumer's future decisions and the

overall success of the product or service. It includes several key aspects:

● Customer Satisfaction: This is a critical outcome of the post-purchase

phase. If the consumer is satisfied with their purchase, it can lead to positive

outcomes such as loyalty, repeat purchases, and word-of-mouth

recommendations. Satisfaction depends on whether the product or service

met or exceeded the consumer's expectations.

● Cognitive Dissonance: Sometimes, consumers may experience cognitive

dissonance after a purchase. This is a feeling of discomfort or uncertainty

about whether they made the right decision. Marketers often address this by

providing post-purchase reassurance and support.

● Word-of-Mouth and Reviews: Consumers may share their experiences

with others through word-of-mouth, online reviews, and social media.

 Positive reviews and recommendations can boost a product's reputation,

while negative feedback can harm it.

● Repeat Purchases: Depending on their satisfaction and the nature of the

product or service, consumers may become repeat customers. This can lead

to brand loyalty and a long-term relationship with the seller.

● Post-Purchase Services: Some products come with post-purchase services,

such as warranties, customer support, and maintenance. These services play

a role in the overall satisfaction and experience of the consumer.

● Returns and Complaints: In cases of dissatisfaction or issues with the

product, consumers may engage in the return process or file complaints.

How these issues are handled can significantly impact the consumer's

perception of the brand and product.

Customer Satisfaction and Customer Commitment:

● Customer Satisfaction: Customer satisfaction is a critical factor in the

consumer decision-making process. It is the overall feeling of contentment

or pleasure that a customer derives from a product or service after purchase.

A satisfied customer is more likely to become a loyal and repeat customer.

To achieve customer satisfaction, companies must meet or exceed customer

 expectations in terms of product quality, customer service, and overall

experience.

● Customer Commitment: Customer commitment goes beyond satisfaction.

It reflects the degree to which a customer is emotionally attached to a brand

or company. A committed customer is not only satisfied but also loyal and

willing to continue doing business with the same company. Building

customer commitment is a long-term goal for businesses as it leads to

sustainable and profitable relationships.

Models of Consumer Behavior:

Understanding consumer behavior is crucial for businesses to tailor their marketing

strategies and meet consumer needs effectively. There are traditional and

contemporary models of consumer behavior that provide insights into how

consumers make decisions. Let's explore these models:

Traditional Models of Consumer Behavior:

1. Economic Model: This model assumes that consumers are rational

decision-makers who seek to maximize utility while minimizing costs. It

focuses on the economic factors that influence consumer choices, such as

price, income, and utility.

 2. Social Model: The social model emphasizes the role of social and cultural

factors in shaping consumer behavior. It considers the impact of family,

social groups, and cultural norms on an individual's preferences and choices.

3. Psychological Model: This model delves into the psychological factors that

influence consumer decisions. It includes elements like perception,

motivation, learning, attitudes, and memory. Marketers use insights from

this model to design strategies that appeal to consumers' psychological needs

and desires.

Contemporary Models of Consumer Behavior:

1. Nicosia Model: The Nicosia model is a communication model that focuses

on the flow of information and feedback between consumers and marketers.

It highlights the process of consumer decision-making as a dynamic,

interactive system.

2. Howard-Sheth Model: The Howard-Sheth model emphasizes the complex

and often non-linear nature of consumer decision-making. It introduces

variables such as cognitive and emotional processes, external influences, and

various decision strategies.

3. Engel-Kollat-Blackwell Model: This model, also known as the EKB

model, is a comprehensive model that considers both internal and external

 influences on consumer behavior. It highlights the significance of problem

recognition, information search, evaluation of alternatives, purchase, and

post-purchase evaluation.

4. Input-Process-Output Model: The Input-Process-Output model provides a

framework for understanding consumer decision-making as a series of

information inputs, cognitive processes, and the ultimate output, which is the

consumer's choice. It includes factors like external stimuli, consumer

information processing, and the final decision-making outcome.

In conclusion, the consumer decision-making process is a multi-stage journey that

begins with problem recognition and proceeds through information search,

evaluation, outlet selection and purchase, and post-purchase behavior. Customer

satisfaction and commitment are critical outcomes of this process, with

commitment reflecting a deeper level of loyalty and attachment to a brand.

Additionally, understanding traditional and contemporary models of consumer

behavior is essential for businesses to effectively connect with consumers and

shape their marketing strategies. These models provide valuable insights into the

factors and processes that influence consumer decisions, allowing companies to

tailor their approaches to meet consumer needs and preferences effectively.

Traditional models of consumer behavior provide a foundational understanding of

how individuals make decisions when it comes to purchasing goods and services.

These models focus on key aspects such as rationality, social influences, and

psychological factors that drive consumer choices. In this explanation, we will

explore the Economic Model, Social Model, and Psychological Model in detail,

highlighting their key concepts and contributions to understanding consumer

behavior.

1. Economic Model of Consumer Behavior:

The economic model is based on the assumption that consumers are rational

decision-makers who aim to maximize their utility (satisfaction or well-being)

while minimizing costs. This model is rooted in the principles of microeconomics

and offers several key insights into consumer behavior:

● Utility Maximization: According to this model, consumers seek to

maximize their overall satisfaction by making choices that provide the

most utility. They evaluate products and services based on the benefit

(utility) they expect to derive.

● Marginal Utility: The concept of marginal utility is central to this

model. It refers to the additional satisfaction or benefit a consumer

receives from consuming one more unit of a product. Rational

 consumers will continue to consume until the marginal utility equals

the price they are willing to pay.

● Budget Constraint: Consumers operate under a budget constraint,

which means they have limited resources to allocate among various

goods and services. This constraint forces consumers to make trade-

offs and prioritize their spending to maximize overall utility.

● Price Elasticity of Demand: The model also considers price

elasticity, which measures how sensitive consumer demand is to

changes in price. Products with inelastic demand are less responsive

to price changes, while products with elastic demand are more price-

sensitive.

The economic model provides a structured framework for understanding consumer

choices based on preferences, budgets, and the relative costs and benefits of

different options. It assumes that consumers are rational actors who carefully

evaluate their options.

2. Social Model of Consumer Behavior:

The social model emphasizes the role of social and cultural factors in shaping

consumer behavior. It recognizes that individuals do not make decisions in

isolation but are influenced by the society and culture they are part of. Key

concepts in the social model include:

● Reference Groups: Reference groups are social groups or individuals

that influence a person's beliefs, attitudes, and behaviors. These

groups can be aspirational (groups consumers would like to belong to)

or associative (groups consumers are already a part of).

● Cultural Norms: Culture plays a significant role in shaping consumer

behavior. Cultural norms, values, and beliefs influence what is

considered acceptable or desirable in a particular society.

● Social Class: Social class can affect consumer choices, as individuals

from different social classes may have distinct preferences and

priorities. Marketers often segment their target audiences based on

social class.

● Social Influence: Consumers are influenced by the opinions and

behaviors of those around them, whether it's family, friends, or

celebrities. Social influence can affect brand choices, product

adoption, and lifestyle decisions.

The social model highlights the importance of understanding the social context in

which consumers make decisions. It acknowledges that consumers are not isolated

decision-makers but are influenced by the society and culture they are a part of.

3. Psychological Model of Consumer Behavior:

The psychological model of consumer behavior delves into the internal mental

processes and psychological factors that influence consumer choices. It examines

how individuals perceive, interpret, and respond to information about products and

services. Key concepts in this model include:

● Perception: Consumer perception involves how individuals interpret

and make sense of information from their senses (e.g., sight, taste,

smell) and cognitive processes (e.g., brand perception). Perception

significantly influences product and brand choices.

● Motivation: Consumer motivation refers to the internal desires and

needs that drive behavior. Understanding what motivates consumers is

crucial for designing marketing messages that resonate with their

needs.
 ● Learning and Memory: Consumers acquire knowledge about

products, brands, and experiences through various means. Learning

and memory processes influence brand loyalty and decision-making.

● Attitudes: Consumer attitudes are a combination of beliefs and

evaluations of products and services. Positive attitudes toward a

product can lead to purchase intentions.

● Emotion: Emotional responses play a significant role in decision-

making. Consumers often make choices based on how a product or

service makes them feel.

The psychological model offers insights into how consumers process information,

make decisions, and form attitudes. It helps marketers understand the

psychological drivers behind consumer behavior and tailor their strategies

accordingly.

In summary, traditional models of consumer behavior, including the Economic

Model, Social Model, and Psychological Model, provide a solid foundation for

understanding the various factors that influence consumer choices. The Economic

Model emphasizes rational decision-making, the Social Model recognizes the

impact of societal and cultural factors, and the Psychological Model delves into the

internal processes that shape consumer behavior. These models are valuable tools
for marketers and researchers seeking to understand and predict consumer choices

and tailor their strategies effectively. However, it's important to note that these

models simplify consumer behavior and may not capture the full complexity of

real-world decision-making, which often involves a combination of rational and

emotional factors.

Contemporary models of consumer behavior provide more nuanced and dynamic

perspectives on how consumers make decisions in the modern marketplace. These

models take into account the interactive and multi-dimensional nature of consumer

behavior and have been developed to better reflect the complexities of the

consumer decision-making process. Let's explore these contemporary models in

detail:

1. Nicosia Model:

The Nicosia Model, proposed by Francesco Nicosia in the 1960s, is a

communication-based model that highlights the interaction between consumers and

marketers in the decision-making process. It is often used to analyze and

understand the flow of information in the marketing communication process. The

model consists of four key components:

● Input: This represents the information available to consumers from

various sources, such as advertising, sales promotions, and word-of-

 mouth. Consumers receive input from these sources, which shapes

their perceptions and attitudes.

● Process: The process component reflects how consumers interpret

and evaluate the information they receive. It includes their

information processing, decision-making, and evaluation of

alternatives.

● Output: Output represents the consumer's response to the input and

the decisions they make. This can include purchase decisions, brand

preferences, or recommendations to others.

● Feedback: Feedback loops exist at each stage of the model, allowing

marketers to receive feedback from consumers and adjust their

strategies based on consumer responses.

The Nicosia Model highlights the dynamic and interactive nature of the consumer

decision-making process, where information flows back and forth between

consumers and marketers. It emphasizes the importance of effective

communication and feedback in marketing strategies.

2. Howard-Sheth Model:
The Howard-Sheth Model, developed by Jagdish N. Sheth and John Howard, is a

comprehensive model that recognizes the complexity of consumer behavior. It

acknowledges that consumer decision-making is not always a rational and linear

process. The model consists of several key elements:

● Inputs: These represent external influences on the consumer,

including marketing efforts, situational factors, and the consumer's

previous experience.

● Cognitive and Emotional Processes: The model acknowledges that

consumers engage in both cognitive (rational) and emotional

(affective) processes when making decisions. Cognitive processes

involve information processing, evaluation of alternatives, and

problem recognition. Emotional processes include feelings and

attitudes.

● Decision Strategies: The model suggests that consumers use different

decision strategies based on the complexity of the decision. These

strategies include habitual decision-making (routine choices), limited

problem-solving (moderate effort), and extensive problem-solving

(high effort and research).

 ● Outcomes: The outcomes of the decision-making process may vary

and can include purchase behavior, brand loyalty, and post-purchase

satisfaction.

The Howard-Sheth Model recognizes that consumer behavior is influenced by a

combination of internal and external factors. It accommodates the emotional and

psychological aspects of decision-making and allows for variations in consumer

decision strategies.

3. Engel-Kollat-Blackwell Model (EKB Model):

The Engel-Kollat-Blackwell Model, also known as the EKB Model, is a

comprehensive model that outlines the stages of the consumer decision-making

process. It is one of the most widely used models in marketing. The model consists

of five stages:

● Problem Recognition: This is the initial stage where consumers

recognize a need or problem that requires a solution. Problem

recognition can be triggered by internal or external factors.

● Information Search: Consumers gather information about potential

solutions through various sources, including personal, commercial,

public, and experimental sources.

 ● Evaluation of Alternatives: Consumers evaluate the available

options based on their criteria and preferences. This stage involves

assessing product attributes, brand reputation, price, and other factors.

● Purchase Decision: In this stage, the consumer selects a product or

service and makes the actual purchase. The purchase may be

influenced by factors such as retailer choice, price, and product

configuration.

● Post-Purchase Evaluation: After the purchase, consumers assess

their satisfaction with the product or service and may engage in

feedback or word-of-mouth communication.

The EKB Model underscores the importance of understanding the consumer's

journey from problem recognition to post-purchase behavior. It helps marketers

tailor their strategies at each stage of the decision-making process.

4. Input-Process-Output Model:

The Input-Process-Output Model is a simplified framework for understanding

consumer behavior. It consists of three key components:

 ● Input: This includes external stimuli that consumers encounter, such

as advertising, product features, pricing, and recommendations from

others.

● Process: The model highlights the internal processes that occur when

consumers receive input. This includes perception, attention, memory,

and decision-making processes.

● Output: The output represents the consumer's ultimate response,

which can include purchasing a product, forming a brand preference,

or providing feedback.

The Input-Process-Output Model provides a basic understanding of how external

stimuli influence the consumer's internal processes and lead to specific outcomes.

It is a useful framework for marketers to analyze and optimize their

communication strategies.

In conclusion, contemporary models of consumer behavior offer a more dynamic

and interactive view of how consumers make decisions. These models recognize

the complexities of the decision-making process, the role of communication and

feedback, the interplay between rational and emotional factors, and the importance

of understanding the consumer journey from problem recognition to post-purchase

behavior. By incorporating these models into their strategies, marketers can gain a
more nuanced understanding of consumer behavior and create more effective

marketing campaigns.