Sales and Distribution Management

Consumer Decision Process

 Marketing – Consumer Decision Process

There are a number of Ingredients to Marketing

The Chartered Institute of Marketing definition includes :
1. Identifying :
- How do we find out what the consumers requirements are
- How do we keep in touch with their thoughts and feelings and perceptions of our
goods and services
2. Anticipating
Consumers requirements change all the time. Anticipation involves looking at the
future as well as present : what will be the next best thing (NBT) that people will
require tomorrow ?
3. Satisfying
Consumers want their requirements o be met. They seek particular benefits
They want the right goods, at the right price, at the right time, at the right place
4. Profitability
Marketing also involves making a margin or profit

So to be sustainable, marketing would require an understanding of the consumer

 Consumer Decision Process

Consumers adopt different processes for different products under different

situations
 Consumer Decision Process

Picking : An example of limited problem solving, involves a random choice, where

the buyer picks a brand from the available brands and is indifferent to brand he
buys
Occurs when
1. Low involvement in the purchase
2. Little uncertainty with untried brands
3. Few brand differences
Ex : Mineral water

Impulse Buying – Picking is different from impulse buying

Occurs when a consumer experiences a sudden, often powerful and persistent
urge to buy something immediately
It is more likely to involve grabbing a product than choosing one
Impulse is often associated with regret after purchasing
Ex : Chocolates
Impulse is encouraged by visibility
 Consumer Decision Process

Variety seeking : Also a low involvement purchase

Requires significant differences between Brands
Is found when
1. Purchases are made for more than one consumption period
2. When the timing of a purchase and the timing of consumption are different
Ex : Toothpaste, Fruit juice
Display plays an important role in encouraging sales for products under the
variety seeking behavior
 Consumer Decision Process

Legalistic Behavior : Low involvement purchase but the behavior requires

approval from external sources ( legal or societal norms )
Ex : Gas stove, Helmets

Subcontracted Decision Making : Subcontracted decision making is where the

buyer obtains a brand recommendation from a personal source with intention of
purchasing the brand without acquiring any further information
Under these situations, the consumer decides on the referrer or source of
recommendation
This is different from the traditional concept of opinion leader or reference
group influence
Ex : Drugs and Medicines, Computer Peripherals
 Consumer Decision Process

Heuristics : Buyers employ simple thumb rules when making repeat purchase
Acquired through practice and learning, allows buyers to make very quick and
effortless decisions
Wright states that situational variables like
- Task complexity
- Timing pressures
- Distractions
motivate decision makers to use heuristics or simplifying strategies to minimize
potential complexity of the choice task . Ex : Computer
 Consumer Decision Process

Extended Problem Solving : This occurs when the purchase is of importance to the
buyer
This process occurs during the purchase of complex , high priced products where
brands are perceived to be different and are associated with a high degree of
uncertainty
In complex decision making, the buyer evaluates the brands using choice criteria
O’Shaugnessy classifies the various choice criteria as :
- Technical performance criteria : use the effectiveness of the product during
evaluation
- Generated functions : These incorporate additional costs and benefits
generated by using , consuming or possessing the product
- Economic criteria : Use information on price, cost per unit of effort or time
- Adaptive criteria : The criteria used in the CB context are trial, and so on
- Integrative : In the CB situation the integrative criteria are related to cultural,
social, and ego aspects
Ex : Consumer Durables
 Consumer Decision Process
Habitual Behavior : Habit generally forms when the consumers are satisfied with the
outcomes of the earlier purchases
Habitual buying is characterized by absence of information search and evaluation of alternate
brands
Ex : Cosmetics
Quasi-resolution process : This occurs when a latent conflict exists between goals of the
organizational members and the purchasing goal of the purchasing agent.
Robinson found evidence of this process under industrial contexts

Reciprocity : Reciprocal dealings involves two parties doing business with one another, and
each playing the dual role of buyer and seller. This causes a bias against a evaluative purchase
Moyer found firms dealing in homogeneous products ( for example petroleum, chemicals and
iron and steel)
Under reciprocity dealing, the decision to purchase remains with the top management and not
with the technical people
Consumer goods firms are less prone to use reciprocity than industrial goods over time
This is because of the differentiated character of most consumer goods and the absence of large
buyers who can, in turn, sell to the consumer goods firms
 Role of Marketing Strategy
Marketing strategy is the business activity of presenting goods and services to potential
customers in such a way as to make them eager to buy the product
This outlines the specific actions a company intends to carry out to interest potential customers
and clients in the product and / or services and persuade them to buy the product and / or
services and convert them into loyal customers
Once the consumer is loyal, the company should retain him by reinforcing the behavior
Thus the process would mean changing the behavior from a low-involvement purchase to a
high-involvement purchase
 Developing Customer loyalty
Marketers aim at developing loyalty
Loyal customers provide repeat business and – equally important – provide a referral for
potential customers
Companies may assume that all repeat customers are loyal, but that may not be the case
They might be repurchasing the product because of factors such as low price or convenience
For ex : Low cost airlines
The following processes must be adopted to earn and maintain customer loyalty :
- Serve today’s buyer
- Know the loyalty password
- Get into the mind of your prospect
- Manage your customers lifecycle
 Role of Marketing Strategy…..
The process of changing consumers from a low-involvement purchase to a high involvement
purchase requires and understanding of the factors differentiating the low-involvement
purchase and high involvement purchase
 Role of Marketing Strategy
Table identifies two product related factors influencing the various decision processes:
- Uncertainty of untried brands
- Differences between brands

The product categories are thus mapped on 2 x 2 matrix classified on :

- Uncertainty of untried brands
- Differences between brands
Behavior For Purchase Of Watches By Different Segments
 Behavior For Purchase Of Watches By Different Segments…..

Display is the most important factor influencing sales for consumers looking for
Low end watches
Pushing a brand doesn't work ( similar to a variety seeking buying )

For a large number of high end consumers a watch has an ornamental value and
is a statement and a reflection of personality ( a sign of their social standing in life).
Hence purchase is made more by the status of the brand ( similar to a habitual
buying )

Youth who aspire to purchase mid-segment watches would evaluate the brands and
exhibit a problem-solving behavior

Based on consumer segment, the company needs to plan its marketing strategy

To convert a low involvement purchase to a high involvement purchase the strategy

should aim not only at differentiating the brand but also increasing the importance of
attributes- product performance (technical criteria) or social acceptance ( integrative
criteria )
 Behavior For Purchase Of Watches By Different Segments…..
The shift from a low involvement decision process to a high-involvement decision
process is achieved by changing the way consumers evaluate a brand
 Behavior For Purchase Of Watches By Different Segments…..
Thus shifting consumers from one quadrant to another by changing the way they
evaluate is the process of marketing strategy

Products in the Picking behavior need to differentiate their brands

Once the brands have been differentiated and move to variety seeking behavior, the
company should start increasing the importance of the attributes
In this way the product should be moved to the problem- solving quadrant where consumers
collect and evaluate information, in effect increasing involvement in the purchase

( uncertainty of using unknown brands )

The next step would be to move to the emotional level positioning by shifting to intangibles