Consumer Decision Making 382136778

7/31/2019 Consumer Decision Making 382136778

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CONSUMER DECISION MAKING

- By Vidushi Sharma


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quickly list 10 items you have purchased in the past

month

reexamine how long it took you to make a decisionon each

why did such a difference in decision occur?


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Types of Decision Making

1. Routinised response behavior/ Habitual buyingbehavior

Simple, low cost, frequent purchasing, not muchsearch for information, clear preference for brand.

2. Limited problem solving/ Dissonance reducingbuying behavior

New brand in known product class, moderateinformation search and time in choosing

3. Extensive problem solving/ Complex buying behavior Unfamiliar product class, criteria not known, need

for information search, longer time in decision.


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Routine Problem

Solving

Limited Problem

Solving

Extensive problem

Solving

Purchaseinvolvement level

Low Medium High

Problem

Recognition

Automatic Semiautomatic Complex

Information search

and evaluation

Minimal Limited Extensive

Purchasing

orientation

Convenience Mixed Shopping

Postpurchase

processes

Very Limited Limited Complex


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Buying Motives

Motive can be a strong desire, feeling, an urge from

within, a drive, stimulus or emotion which plays a

role in consumer decision to purchase a product.

Prof D. J. Duncan: those influences orconsiderations which provide the impulse to buy,

induce action or determine choicein purchase of

goods


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BUYING MOTIVES

Product motive Patronage motive

Emotional Emotional

Rational Rational


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INPUT

Need Recognition

Process Pre purchase Search

Evaluation Of Alternatives

Output Purchase

Post Purchase Evaluation


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Input:-

1. Firms Marketing Efforts

Product

Price

Place

Promotion

2. Socio-Cultural Environment

Family

Social classes

Culture and Sub-culture

Informal sources


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Need Recognition:-

Consumer recognizes a need when is faced with a

problem. Two types of problem recognition

Actual state type of problem

Desired state type of problem. Eg JAISALMER cigarette

Motivational Arousal :-

Satisfaction optimization: leisure and entertainment

Satisfaction maintenance: maintain status quo

Prevention of possible future problem

Problem avoidance

Conflict resolution: satisfying more than 1 need by 1

purchase


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Types of Problem Recognition :

Immediacy Of Solution

Expectancy

Of Problem

Routine Problem: Convenience goods, Grocery purchases

Emergency problem: ATM, credit cards Planning problem: Durable goods

Evolving problem: Fashion

Immediate solution

required

Immediate

solution not

required

Occurrence was

expected

Routine problem Planning problem

Occurrence

unexpected

Emergency

problem

Evolving problem


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Situations leading to problem recognition

Marketers understand such situations so that they

can remind the customers of such situations. Eg:

Dominos, Cadbury

1. Depleted or Inadequate stock of goods2. Discontentment with existing stock of goods

3. Changing financial circumstances

4. Marketing Efforts: try to create a gapbetween actual and

desired state


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Marketing helps consumers

recognize (or create) an

imbalance between present

status and preferred state


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Marketing Implications:

Marketer can segment customers on the basis oftheir motives. Eg TVS jive

Marketer can devise promotional campaignaccording to uniqueness of segment. Eg Dabur

Marketers can provide the consumer with the

opportunity to recognize their need for particulargoods and service. Eg Diamonds are ideal gift

Identify situations in which consumers are likely tomake purchases. De Beers- Wedding collection,

cadbury, Kurkure Marketers can manage marketing mix elements well

to take advantage of recognized problem situation.Eg Maruti Suzuki


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Information Search:

Once the need or problem is identified customer

starts seeking information.

Various sources of information are:

Own personal experience

Reading about product in mass media

A lecture on the product

Word of mouth Shop window display

Friends and relatives


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Type of Information sought by potential buyer

1. Evaluation Criteria: features to meet needs, price,

wash capacity, power

consumption, heater facility,

drying facility2. Appropriate alternatives : various brands available

to satisfy the criteria

3. Alternative characteristics: gather information on

each brand on eachpertinent evaluative

criteria.


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Information collection & processing

SET NAME EXPLANATION INFORMATION IMPLICATION

Awareness Set Consist of all the brands that

the customers knows of

Customer collects preliminary

information on these brandsand scrutinizes them in a

cursory fashion

Inept Set Customer definitely finds it

unworthy of consideration

Consumer is not interested in

any information on the

brand(s) in this set

Evoked Set Based on preliminary

investigation customer finds

them worthy of further

attention

customer is interested in

gathering as much information

as is needed for decision

making on these brands

Inert Set Consumer is indifferent

towards these choices

These brands are acceptable if

none of the brands from the

evoked set can be bought.

Thus, while consumer is not

actively seeking information

on these brands, he passively

accepts information on them.


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The information search

An internal search involves the scanning of one'smemory to recall previous experiences or knowledge

concerning solutions to the problem-- often

sufficient for frequently purchased products.

An external search may be necessary when pastexperience or knowledge is insufficient, the risk of

making a wrong purchase decision is high, and/or the

cost of gathering information is low.

Personal sources (friends

and family)

Public sources (rating

services like Consumer

Reports)

Marketer-dominated

sources (advertising orsales people)


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External Search:

Information in memory is missing, inadequate, or issuspect, then an external search is required.

Amount of external search activity depends upon:a. Perceived value vs perceived cost:

Financial cost

Time cost

Physical cost

Psychological cost

b. Individual factors:

Experience with a product

Open mindedness and self confidence of consumer

Educational level income status

Degree of involvement


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c. Situational Factors:

Urgency of need and availability of time

Special opportunities arise to purchase at anattractive prices.

d. Risk Factor:

Functional/ Performance risk

Financial risk Psychological risk

Social risk

Physiological risk

e. Types of product sought:

Shopping goods

Convenience goods


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Marketing Implications :

Marketer can make the task easy for customer like

finding the information, understanding it and using

it.

Marketer can minimize both risks and costs to theconsumer in making product selection.


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Evaluation of Alternatives


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Evaluation criteria are the various features that a

customer looks for in a response to a particular type of

problem.

Tangible criteria: price, color, size, shape etc

Intangible criteria: brand image, feeling associated with

ownership

Evaluation criteria differ in number, type and

importance.

It varies with customer, product, situation.

Eg purchasing a pair of jeans Number of evaluation criteria depends on importance

of purchase


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Non compensatory decision rules

The weakness of a possible alternative not

offset by its strength.

All the criteria should be satisfactory for

purchase.

Compensatory decision rules

Trade off while comparing alternatives

Weighted rating is used.


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Marketing Implications

Evaluation is comparative: ensure own brands are

rated superior

Educate the customers on criteria that should beused for evaluation.


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Purchase Behavior

Type of purchase

Trial purchase or

First timepurchase Repeat purchase

Long term

commitmentpurchase


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Post purchase evaluation

Experiences are judged against expectations

1. Neutral feelings

2. Satisfaction : Positive disconfirmation of

expectations

3. Dissatisfaction : negative disconfirmation of

expectations


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think of an important purchasing decision you

have made

what are some of the thoughts you have had

following your purchase? Any regrets?

what has influenced those thoughts?

how have you dealt with the discomfort?

how has the company anticipated or dealt with

your discomfort?


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Postpurchase Behavior

Can minimize through:Effective Communication

Follow-upGuaranteesWarranties

Underpromise & overdeliver

Cognitive Dissonance

?Did I make a good decision?Did I buy the right product?

Did I get a good value?


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Cognitive Dissonance

psychological discomfort caused byinconsistencies among a persons

beliefs, attitudes, and actions

varies in intensity based on importance

of issue and degree of inconsistency

induces a drive state to avoid or

reduce dissonance by changing beliefs,

attitudes, or behaviors and therebyrestore consistency


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Strategies to reduce dissonance

Rationalize the decision to be wise

Look for advertisements to support their choice

Persuade others to buy the same brand

Meeting satisfied owners for reassurance


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Consumer Decision Making 382136778

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