AMITY GLOBAL

BUSINESS SCHOOL Chandigarh

Consumer Decision
Making Process:

Module 5
AMITY GLOBAL
BUSINESS SCHOOL Chandigarh

Consumer Decision Making Process

• This is a process
where a consumer
based on information
available makes a
logical evaluation to
purchase a product
or service as desired
AMITY GLOBAL
BUSINESS SCHOOL Chandigarh

Understanding Consumer Decision

Making : WHY?
• Explain why marketing managers should understand
consumer behavior.
• Analyze the components of the consumer decision-
making process.
• Explain the consumer’s post purchase evaluation
process
• Identify the types of consumer buying decisions and
discuss the significance of consumer involvement.
• Identify and understand the cultural factors that affect
consumer buying decisions.
AMITY GLOBAL
BUSINESS SCHOOL Chandigarh

• Identify and understand the social factors that affect

consumer buying decisions.
• Identify and understand the individual factors that affect
consumer buying decisions.
• Identify and understand the psychological factors that
affect consumer buying decisions.
AMITY GLOBAL
BUSINESS SCHOOL Chandigarh

Decision Making : Types

• Extended Problem Solving
– High perceived risk, Involves more time to choose
– Typically expensive, infrequently purchased products
e.g. purchase of house, marriage arrangements
• Routine Problem Solving
– Low perceived risk
– Purchases made out of habit or brand loyalty
– Typically inexpensive, frequently purchased product
e.g. purchase of household items, haircut
• Limited Problem Solving
– Moderate perceived risk
– Consumer might have purchased the item before
– Items purchased infrequently
e.g. buying a 2nd hand car, choosing for vacation location
AMITY GLOBAL
BUSINESS SCHOOL Chandigarh

Consumer Decision Making Process

Need Recognition

Information Search
Cultural, Social,
Individual and
Psychological Evaluation
Factors of Alternatives
affect
all steps Purchase

Post purchase
Behavior
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BUSINESS SCHOOL Chandigarh

STEP 1:Need/ Problem Recognition

Marketing helps Internal Stimuli

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

Present Status
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BUSINESS SCHOOL Chandigarh
AMITY GLOBAL
BUSINESS SCHOOL Chandigarh

Step 2: Information Search

• After recognizing the need, the person gets

involved in gathering the information about the
product or service
• Search is of two types: Internal Search
External Search
AMITY GLOBAL
BUSINESS SCHOOL Chandigarh

Internal Search
• It refers to recalling information, experiences, and feelings
concerning products and brands stored in the memory.
• How much do we engage in internal search?
• What kind of information is recalled?
1. Brands
*evoked set
*brand familiarity and retrieval cues increase
chances of being in the evoked set
2. Attributes
3. Evaluations
4. Experiences
• Is internal search always accurate?
• Confirmation bias
AMITY GLOBAL
BUSINESS SCHOOL Chandigarh

External Search
• Consumers acquire information from outside sources.
• Engage in pre-purchase and ongoing search
• External Sources
1. Retailer search
2. Media search
3. Attitudes, opinions, behaviours of relatives, neighbors
4. Articles, books, journals
5. Internet / websites
effects of information overload
• Is external search always accurate?
AMITY GLOBAL
BUSINESS SCHOOL Chandigarh

Determinants of External Search:

AMITY GLOBAL
BUSINESS SCHOOL Chandigarh

Information Processing:
External Search
As a consumer is exposed to information resulting from
external search, he begins to process the stimuli
• Exposure
• Attention
• Comprehension
• Acceptance
• Retention
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BUSINESS SCHOOL Chandigarh

Step 3: Evaluation of Alternatives

• Evaluation Evoked Set
– Consumers try to determine how well a
product or service satisfies a particular
need
– Marketers determine what is important to
consumers
to ensure their products are different,
distinct and best satisfy the need
• Identifying Alternatives
– evoked set and consideration set
Evoked Set Group of brands, resulting from an
information search, from which a buyer can
Purchase!
choose.
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BUSINESS SCHOOL Chandigarh

• Identifying Evaluative Criteria

– information search suggests criteria and identifies
brands
– Evaluative criteria includes those criteria that are
important to the consumer when rating product
alternatives
– Firms try to identify evaluative criteria through market
research.
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BUSINESS SCHOOL Chandigarh

Step 4: Purchase
After evaluating the possible choices, the consumer
develops an intention either to buy the product or
reject it.

To buy
Determines which attributes
or not to buy... are most important
in influencing a
consumer’s choice
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BUSINESS SCHOOL Chandigarh

Step 5: Post Purchase Evaluation

• The response a person shows after

making a purchase decision towards a
particular product or a brand is known as
post purchase behavior.
• Product performance is compared with
consumer expectations.
AMITY GLOBAL
BUSINESS SCHOOL Chandigarh

After Purchase Scenario:

• Satisfied customers

?
• Dissatisfied customers Cognitive Dissonance
• Cognitive dissonance

Did I make a good decision?

Did I buy the right product?

Did I get a good value?

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BUSINESS SCHOOL Chandigarh

Cognitive Dissonance

?
Inner tension that a Cognitive Dissonance
consumer experiences
after recognizing an
inconsistency between
behavior and values Did I make a good decision?
or opinions
Did I buy the right product?

Did I get a good value?

AMITY GLOBAL
BUSINESS SCHOOL Chandigarh

Low Effort Decision Making

• Market Beliefs
• Brand Loyalty
• Habit
• Impulse Purchases
• Variety Seeking