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Consumer Buying decision

Making Process
✔ Problem Recognition
✔ Information Search
✔ Alternative Evaluation & Selection
✔ Store Choice
✔ Post Purchase Behaviour/Processes
Consumer decision Porcess
✔ Purchase Involvement : Level of concern for or interest in the purchase
process triggered by the need to consider a particular purchase.
✔ Product Involvement
✔ A consumer may have very involved with a brand (Café Coffee Day or
Ford) or a product category (coffee or cars) and yet have a very low
;level of involvement with a particular purchase of that product because
of brand loyalty , time pressures etc. TYPES OF
Consumer Decisions
✔ Habitual Decision Making
✔ Limited decision Making
✔ Extended Decision Making
Involvement and Types Of decision Making
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Process of Problem Recognition
✔ Routine Problems Of Depletion : toothpaste over, petrol
over---> readily recognized, defined and resolved.
✔ Unexpected breakdown of a major appliance (CTV, W/M)
creates an unplanned problem that is easily recognized but
is often more difficult to resolve.
✔ Recognition of other problems such as need for PC , may
take longer as they may be subtle and evolve slowly over
time.
Nature of Problem Recognition

Problem recognition is the first stage in the consumer decision process


✔ Problem recognition is the result of a discrepancy between a desired
state and an actual state that is sufficient to arouse and activate the
decision process
✔ An actual state : is the way an individual perceives his/her feelings and
situation to be at the present state.
✔ A desired State: way an individual wants to feel or be at the present
time.
Process of Problem Recognition
Desired Consumer Lifestyle Current Situation

Desired State Actual State

NATURE OF DISCREPANCY

No difference Desired state exceeds Actual state


Actual state exceeds desired state
Satisfaction

No action problem recognized


(Information search initiated)
Desire to Resolve Recognized problems.

✔ The level of one’s desire to resolve a particular problem depends on two factors :
1) The magnitude of the discrepancy between the desired and actual states
and 2) The relative importance of the problem e.g : 1) A person has a
car which gives 15 km per litre. He desires to have 18 Km/litre. Thus discrepancy
exists , but the magnitude is not large enough to motivate the consumer to proceed
to next step of decision process. 2) A consumer owns an old Esteem and desires to
buy Skoda. The discrepancy is large but the relative importance could be small.
Compared to other consumption problems such as hosing, utilities and food.
Relative importance is critical concept because all consumers have budget
constraints , time constraints or both.
Marketing Strategy & Problem recognition

✔ Marketing Managers have 4 concerns related to problem recognition1)


Discovering Consumer Problems. 2) Responding to consumer
Problems 3)Helping consumers recognize problems 4)
Suppressing problem recognition
1) Discovering consumer Problems

✔ a) intuition : managers analyze a given product category and logically


determine were improvements can be made. B) Research techniques: 1)
Survey 2) Focus group Both focus group and survey tend to take one of the
following approaches to problem identification. B1---> Activity analysis :
Focuses on a particular activity such as preparing dinner,, maintaining the lawn
etc. Focus group attempts to determine what problems the consumers feel occur
during the performance of the activity. B2:---> Product Analysis: Examines the
purchase and /or use of a particular product/brand. E.g :-- consumers may be
asked about problems faced with W/M or CTV or Bikes etc.
✔ B3:--- Problem Analysis : It starts with the list of problems and asks to
indicate which activities , products or brands are associated with those
problems.
E.g A study dealing in packaging could include questions like
1) ------------ Packages are hard to open
2) ___________ doesn't pour well
3) Packages of ---------- don’t fit on the shelf.
2) Responding to consumer Problems

✔ Marketers structure the marketing mix to solve the problems

✔ This can involve developing a new product or altering existing one , changing

pricing policy , distribution or promotion. E.g : Weekend and late night


stores (some 24 hours format)and also internet stores --- response to consumer
problems of limited weekday shopping activities ---> particularly important to
families were both spouses are working The approach of graduation ,
companies respond with credit cards , insurance - to solve problems associated
with onset of financial independence and major change in lifestyle.
3. Approaches to activate problem recognition
:

✔ a) Influence desired state: marketers often advertise the

benefits their products will provide , hoping that these benefits will

become desired by consumers e.g Hyundai Accent ad

b) Influence perceptions of existing state : e.g Personal

care ads use statements that generate concerns about an existing state

Lifebouy ad -- showing 3 college girls


3. Approaches to activate problem recognition
:
✔ The Timing Of Problem recognition : Consumers often recognize
problems at times when purchasing a solution is difficult. Or
impossible.
E.g Need for insurance after the accident
Need for cold medicine when we are sick but we don’t fell
like going to the store to buy one.
Common strategy is to trigger problem recognition in advance of
actual problem
CEASTE FIRE
national Assurance , Dabur Chywanprash
Franklin templeton ads.
4. Suppressing Problem recognition

✔ In some cases the above needs to be done


✔ e.g : A cigarette company giving an ad saying “ Alive with Pleasure”
showing a happy laughing couple . This could easily be interpreted as
an attempt to minimize any problem recognition caused by the
mandatory warning at the bottom of the advertising “ Cigarette
smoking is injurious to health”
Stage 2: Information search
✔ What is nature of information search.
✔ What types of information are sought
✔ What sources of information are used
✔ What marketing strategies can be developed based on patterns of search
behavior. A) Nature of Information Search 1) Internal Search : “ If
Trishun had given relief against cold last time , he would go to nearest store
and buy Trishun without further information search or evaluation” 2)External
Search : a)Opinion of friends , neighbors , relatives b) Professional
information that is provided in internet , newspapers ,magazines etc.
C) Ads, Instore displays
✔ B) Types of Information Search:
1) Appropriate evaluation criteria for the solution of a
problem 2) Existence of various alternative solution.
3) performance level or characteristics of each
alternative solution on each alternative criterion
Marketing Strategies

✔ Maintenance strategy : ( Habitual,evoked set) :


Brands purchased habitually use this strategy. This
requires consistent attention to product quality ,
distribution and a reinforcement advt. Strategy --- Colgate,
HLL.
✔ Disrupt Strategy : Habitual, not evoked set) :
Attention attracting advertisement aimed specifically
at breaking habitual decision making can be successful.
Free samples, discounts, coupons etc. are common
approaches --- Anchor Toothpaste.
Marketing Strategies

✔ Capture Strategy : ( Limited Decision Making, Evoked set)


Limited decision making involves few brands which are
evaluated on a few criteria such as price , brand name and
availability. Information search occurs at the point of
purchase or through readily available media prior to
purchase --- So emphasis is on POP--- Low end kitchn
items like Mixer, Grinder , Juicer etc.
Marketing Strategies

✔ Intercept strategy : (Limited , Not evoked set): same as


capture strategy but for brands not in evoked set .
Attractive POPs , Product demos, contests and other sales
promotion tools like extended warranty can be used.--- e.g
Kenstar mixer with 7 year warranty on motor to counter
SUMEET.
Marketing Strategies

✔ Preference (Extended , Evoked set) : A strong positioning on key

attributes important to the target market has to be done. Next


promotion has to be done in all appropriate media–

Electrolux– Enjoy the freshness, Videocon– Germ free refrigerators,


Whirlpool– Fast cooling, Kelvinator– coolest one.
✔ Acceptance (Extended, Not evoked set ) : Motivate target market to

learn about the brand. The primary objective is to move the brand into
evoked set.– E.G Tata Indica – Test drives.
Evaluation criteria
Colour TV :
✔ Cable readiness Child lock
✔ No. of programs VCD/DVD Compatible
✔ Screen size Sound– Bass/treble, woofer
✔ Price After sales service
✔ Brand name Games
✔ Warranty Personal Preference
✔ Aesthetics PIP
✔ Tuning on remote Sales promotion schemes-scratch card
✔ 0% Finance availability
Evaluation criteria
Shaving cream :
✔ Fragrance
✔ Smoothness
✔ Quick Lather
✔ Price
✔ Packaging
✔ Brand name
✔ Colour
✔ size
✔ Sales promotion schemes
✔ availability
Evaluation criteria
✔ Cameras :
✔ Auto focus Aesthetics
✔ Zoom other features
✔ Built in flash
✔ Size
✔ Brand name
✔ Weight
✔ Price
✔ Brand name
✔ Warranty
✔ After sales service
Evaluation criteria
Automobiles:
✔ Mileage Colour
✔ Warranty A/C
✔ After sales service stereo
✔ 0% finance power
✔ Brand name sales promotion --
✔ Price free insurance etc.
✔ Size power steering
✔ Sitting space
Alternative Evaluation and Selection

✔ Evaluation criteria

Importance of Criteria
Alternatives Considered

Evaluation of alternatives on each criterion

Decision rule Applied

Alternative selected
Measurement of evaluation
criteria
✔ A) Which evaluative criteria are used by consumer 1) Direct
: ask consumers , focus group , observation 2) Indirect :
projective technique, Perceptual Mapping
✔ B) How the consumer perceives the various alternatives on
each criterion 1) Semantic Differential Scale/ likert scale
IBM Think Pad (Laptop) 1) Expensive _ _ _ _ _ _ _
Inexpensive2) Heavy _ _ _ _ _ _ _ Light 3) Easy to read
display _ _ _ _ _ _ _ hard to read display
✔ Likert scale 1) Shopper’s stop is one of the most attractive
stores in town a) Strongly agree b) Agree c) Neutral d)
Disagree e) Strongly disagree.
✔ Rating scale : rate each criterion on a scale of 1 to 5 .

✔ C) Determination of Relative importance of evaluative criteria


Direct method : Constant sum scale method: This method requires
the consumer to allocate 100 points to his/her evaluation criteria
depending on the importance of each criteria.
✔ For e.g -- Laptop
Evaluation criteria Importance
price 5
Processor 30
Display quality 20
Memory 25
After sales support 10
Weight 10
Total 100
D e c is io n R u le s

E v a lu a t io n c r it e r ia C o n s u m e r P e rc e p t io n

N EC Co mp aq HP MAC IB M TOS HIBA


P r ic e 5 3 3 4 2 1
W e ig h t 3 4 5 4 3 4
P ro c e s s o r 5 5 5 2 5 5
B a t t e ry Li fe1 3 1 3 1 5
A ft e r S a le s 3S 3 4 3 5 3
D is p la y 3 3 3 5 3 3
Q u a l it y
Decision rules
✔ Conjunctive Rule :

Establishes minimum required performance standards for


each evaluation criterion and selects all brands that surpass
these minimum standards.
E.g - If Price=3, Weight =4, Processor-3, Battery
Life-1, After sales service=2,Display quality= 3---- are
minimum standards then only Compaq and HP will
qualify.
Decision Rules
✔ Disjunctive Rule : Establishes a minimum level of
performance for each important attribute (normally a high
level) . All brands that surpass the level for any key attribute
are considered acceptable . E.g Price=5, Weight-5,
Display Quality -5 , other parameters- not critical . NEC
(price), HP (Weight), Macintosh (Display Quality) will be in
the final reckoning.
Decision Rules

✔ 3) Elimination By Aspects:
1) Consumers rank the evaluation criteria in
terms of their importance and establishes a cut-off point
for each criterion.
2) All brands are first considered on the most
important criterion.
3) Those brands that do not surpass the cut-off point
are dropped from further consideration.
4) The process continues till only one brand remains
.
Decision Rules

R a nk C u t-o f f P o i nt
P ric e 1 3
W e ig h t 2 4
D is pla y Q ua l ity 3 4
P ro c e s s o r 4 3
A fte r S a le s S up po rt 5 3
B a tte ry L ife 6 3

On Price , IBM and Toshiba get eliminated.


On weight NEC gets eliminated.Thus at this stage only three
brands
I.e Compaq, HP, Macintosh are in the reckoning.
On display quality only Mac exceeds the third requirement on
Decision Rules

✔ 4) Lexicographic : 1)Seeks maximum performance at each


stage. 2)Consumer ranks the criteria in order of importance .
3) Selects the brand that performs best on the most
important attribute. 4) if 2 or more brands are tied on this attribute ,
they are evaluated on the 2nd important attribute. In this case , NEC
would be selected on price. But if NEC -4 on price , it would
have tied with Macintosh. Then NEC and Macintosh would be
compared on Weight, wherein Macintosh would have got selected.
Decision Rules

✔ Compensatory :
Rb=Wi*Bib
Where Rb-overall rating of Brand b
Wi= Importance oattached to evaluation criterion I
Bib- Evaluation of brand b on criterion i, n= number of
criteria.
E.g - Price-30, weight- 25, Processor- 10, Battery Life
-5, After sales service-10, Display quality-20
Rmac= 30(4)+25(4)+10(2)+5(3)+10(3)+ 20(5)= 385.
Store choice--- Stage 4
Attributes affecting retail outlet selection 1) Outlet Image 2) Retail
Advt. 3) Outlet location , size . 4) Range of products Dimensions and
components of store image
Dimension Components
1) Merchandise Quality, style, selection ,price
2) Service Sales personnel, easy return, credit, delivery
3) Clientele Customers
4)Physical facilities Cleanliness, shopping ease
5) Convenience Parking, location
6) Promotion Advt., sales promotion
7) Store atmosphere Congenial, Fun, Excitement
8) Institutional Store Reputation
.