CONSUMER DECISION

MAKING AND DIFFUSION Integrates everything that

we have studied so far
OF INNOVATIONS
 Consumer Decision
Making

Evaluation
Problem Post
Information of
Recognitio Purchase
Search Alternative
n Evaluation
s
 OUTLET SELECTION
AND POST PURCHASE Evaluation, satisfaction
and commitment
CONSUMER BEHAVIOR
 OUTLET CHOICE VS.
PRODUCT CHOICE
The appropriate marketing strategies for both retailers and manufacturers differ
depending on the decision sequence generally used by the target market
3 ways consumers can decide before
making a purchase
 ATTRIBUTE
S
AFFECTING
RETAIL
OUTLET
SELECTION
1. Outlet / store image
2. Retailer Brands
3. Retail Advertising
 Price advertising decisions

4. Outlet Location and

size
Q: Is retailer size important in
online also?
CONSUMER
CHARACTERISTICS AND
OUTLET SELECTION
Non traditional
retailers – high Social, financial, time,
Perceived
risk effort and physical
risk
Traditional cost
retailer – Low
risk
Non-purchase
Shopping style that motives for
Shopping
indicated specific shopping –
orientatio
motivation of depends on
n
shopping shopping
orientation
WHAT INFLUENCES
BRAND CHOICES INSIDE
THE STORE
point-of-purchase materials  unplanned, reminder and impulse
purchases – through signage and displays, personnel interaction
price reductions,
outlet atmosphere,  lighting, layout, presentation of merchandise,
fixtures, floor coverings, colors, sounds, odors, and the dress and
behavior of sales and service personnel
stock out situations,
Web site design, and - online atmospherics – chatbots, interactivity,
graphics, colors, content, navigation and control
Sales personnel
POST PURCHASE Evaluations and outcomes
PROCESSES
POST PURCHASE
CONSUMER BEHAVIOUR
 “I still like it [a dining room set] a whole lot better
POST than what we used to have. But I think if we had
PURCHASE taken longer we would have gotten more precisely
what we wanted. I mean we got a great deal. You
DISSONANCE couldn’t get that for that price, so I am happy with
the money part of it, but some days I wish we had
spent more and gotten something a bit different.”

The degree of commitment The difficulty of choosing

or irrevocability of the among the alternatives
decision

The importance of the The individual’s tendency to

decision to the consumer experience anxiety. Some

Q: Will nominal decision and limited decision making produce same amount of
dissonance as an extended decision?
RESOLVING POST
PURCHASE DISSONANCE
•Increase the desirability of the brand purchased.
•Decrease the desirability of rejected alternatives.
•Decrease the importance of the purchase decision.
•Reverse the purchase decision (return the product before use).
Importance of after sales support
Heightened receptiveness to advertising and information that
supports consumers’ choice
consumption guilt
PRODUCT USE VS. NON
USE
Usage
Most products are put to use
Sometime customers come up
with new uses of a product – use
innovativeness
Q: Should brands encourage
off-label usage?
Non usage
Decision to purchase and decision to
consumer are 2 things
There can be a gap between the two
What happened in between the two
decision may influence non-usage
Eg: Gym membership
Outcome – no repeat purchase or
positive referrals
Strategy – advertising can encourage
use of previously purchased item
 POST PURCHASE
EVALUATION
Above Expected
level
Repeat purchase
Positive disconfirmation of expectations Positive word of mouth
Loyalty
Perceived Satisfaction
performance Expected level

Confirmation of expectations

Below Expected
level Dissatisfaction
Complaint
Reduced patronage
Negative disconfirmation of expectations avoidance
DETERMINANTS OF
CUSTOMER
SATISFACTION
Lets list down the determinants of satisfaction and dissatisfaction
with a retail outlet
DIGITAL POWER OF
DISSATISFIED
CONSUMERS
 DIFFUSION OF
INNOVATIONS

Diffusion of innovation – MACRO

process by which new products /
Macro
technologies / services are accepted by
the market segment over time
M
level
icr
Adoption of innovation – MICRO
process that focuses on the stages that the
o
consumer goes through before deciding
on accepting or rejecting new technology
le
ve
l
 DIFFUSION OF
INNOVATIONS
Continuous Innovation

Disruptiv
Dynamic continuous
innovation
Type of

e
innovatio
n
Discontinuous
innovation
Evoking diffusion within a category
WHAT INFLUENCES
ADOPTION
Diffusion of affordable cell phone is way faster than electric cars.
What factors explain this difference?
1) Relative advantage /perceived value – is the innovation
superior to available substitutes?
2) Compatibility
3) Complexity – perceived ease of use
4) Trial - ability
5) Observability – public vs private use, tangible vs. intangible
 Diffusion through brand extension

Exclusivity and diffusion of premium brands

Diffusing a brand by adding complementary brand

associations

Diffusion of hyper local services