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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 moderate High

Time Short Short to Long


moderate

Costs Low Low to moderate High

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
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
Types of Need or
Problem
 A ctu a l S ta te co n su m e r: T h is o ccu r
w h e n p ro d u ct is n o t p e rfo rm in g
sa tisfa cto rily.
 E x .: T h e h o u se w ife m a y re a lize th a t
th e m ixe r sh e w a s u sin g d o e sn ’ t
g rin d p ro p e rly.
 D e sire d sta te co n su m e r: The
co n su m e r m a y exp e rie n ce th e
d e sire fo r so m e th in g n e w .
 E x .: A n e w ly m a rrie d m a n d e sire to
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
Need Recognition

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

Present Status
Stimulus
Any unit of input affecting
one or more of the five
senses:
Øsight
Øsmell
Øtaste
Øtouch
Øhearing

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
Formal Choice Models

Consumer Decision rules are broadly class


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
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 Compaq Dell IBM Toshiba


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 life 05 1 3 1 3 1 5
After-sale 10 3 3 4 3 5 3
Support
Display 20 3 3 3 5 3 3
Quality
Total 100 370 345 370 385 300 295
Noncompensatory
Models
 WithNoncompensatory 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 Standards

WinBook HP Compaq Dell IBM Toshiba


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 life 1 1 3 1 3 1 5
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
(Output) Purchase
Decision
 Three types of purchases:
§ First time or trial purchase (Ex.:
Detregent)
§ Repeat purchase
§ Long term commitment purchases
 Incase 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)
§
Purchase decision

Choice Purchase Purchase


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