Consumer decision making

Process
Dr Ajitabh Dash
 Definition
• Defined as the “process involved in analyzing
problems, searching solutions, evaluating and
choosing among alternatives and evaluating
outcomes”.
• Often called the consumer information
processing model
 MODELS OF CONSUMERS
• Economic:- Price sensitive and rational
• Passive : irrational and impulsive, easily
succumbs to the selling and promotional
efforts of the marketer.
• Cognitive :-Consumer decisions are based on
information gathering and processing
• Emotional : emotional and impulsive, takes
decisions based on emotions
Steps in Decision-Making Process
Problem Recognition

Information Search

Evaluation
of Alternatives

Purchase

Post purchase
Behavior
Problem Recognition: perceiving a need
• A stage of perceiving a deficiency/need. A need could
be triggered off by an internal stimulus or an external
stimulus. Consumer may face two types of problem.
– Actual State changes (AS type): - the product is failing, or
the consumer is running short of it; - there is a problem
that exists.
– Desired State changing (DS type): - there is an imbalance
between the actual state and the desired state - another
product seems better and superior to the one that is being
currently used.
 Information search : seeking value
• Defined as the actions taken to identify and obtain
information to solve a consumer problem.
– Internal Source: the retrieval of information from long-term
memory
– External Source: acquiring information from outside sources
 Personal sources, such as friends and family.
 Public sources, including various Consumer
informatics center.
 Marketer-dominated sources, such as advertising,
company websites, and salespeople
Outcome of Information Search
Evoked Set
• Group of brands,
resulting from
information search, from
which a buyer can
choose.

Purchase!
Evaluation of alternative : Assessing Value

• Compares the different alternatives available

on certain criteria mentioned as below:
i) Generation of choice set;
ii) Application of Decision Rules.
Generation of Choice Set
• Consumer moves from an evoked set towards the choice set.
• Evoked set/Consideration set: This is the set of alternatives
that he actively considers while making a purchase decision;
these exist either in his memory or feature prominently in the
environment. The consumer perceives them to be acceptable.
• Inept set: These are those alternatives from the evoked set
that the consumer excludes from further consideration, as he
perceives them to be inferior and unacceptable.
• Inert set: These are those alternatives from the evoked set
that the consumer excludes from further consideration, as he
is indifferent towards them and perceives them as ones
without much advantages or benefits.
• Choice set: This comprises the final set of one or two brands
from which he finally decides.
 Application of Decision Rules
• There can be two kinds of Decision Rules, viz.,
Compensatory rules and Non-compensatory
rules.
• Compensatory rules
• Non-compensatory rules
• Conjunctive rule: A minimally acceptable cut off point
is established for each attribute.
• Disjunctive rule:
• Lexicographic rule:
 Purchase decision: Buying value
• Trials/First purchase: Trials could be elicited
through market testing, or through
promotional tactics such as free samples,
coupons, etc.
• Repeat purchases: If the consumer is satisfied,
he would buy the brand again. Repeat
purchases lead to brand loyalty.
a) where to buy from? (Place: Real/brick and
mortar or virtual/online);
b) whom to buy from? (Which store: Depends
on reputation of seller, past experience, etc.)
b) when to buy? (Time: Emergency or Routine;
During season, off season, sale, rebate etc.)
 Post purchase evaluation : Value in
Consumption or Use
– After buying a product, consumer compares it
with expectations and is either satisfied or
dissatisfied.
• Satisfaction or dissatisfaction affects
– consumer value perceptions
– consumer communications
– repeat-purchase behavior.
Cognitive Dissonance

• Inner tension that a consumer experiences after

recognizing an inconsistency between behavior
and values or opinions.

?
Did I make a good
decission ? Can minimize
through:
Did I buy the right Effective
product ? Communication
Follow-up
Did I get the value ? Guarantees
Warranties
 Stage in
Marketers
Buying
objective
Process

Need Generate
awareness,
Recognition Positioning

Information Lead Generation

Search

Evaluation of Assist purchase

Alternative decision

Purchase Facilitate
purchase

Sales support,
Post-purchase
relationship
Evaluation marketing
Variations in purchase decision process
• Three general problem-solving variations exist
in the consumer purchase decision process:

Routine Limited Extensive

Response Decision Decision
Behavior Making Making

LessLess High
involvement
Involvement involvement
Routine response behaviour
– Involves little effort seeking external
information and evaluating alternatives.
• Typically used for low-priced, frequently
purchased products.
• Examples :- tooth paste, soap, milk etc.
Limited decision making
– Involves the use of moderate information-seeking
efforts.
• Often used when the buyer has little time or
effort to spend.
• Example :- shopping goods like digital camera.
Extensive decision making
– Each stage of the consumer purchase decision
process is used
– Considerable time and effort on external
information search and in identifying
and evaluating alternatives.
– Example :- house, car etc