CONSUMER DECISION MAKING PROCESS

PRESENTED BY KHALIL AHMAD

CONTENTS

•INTRODUCTION•FIVE FACTORS INFLUENCING DECISION•LEVELS OF CONSUMER DECISION MAKING

•TYPES OF CONSUMER BUYING DECISIONS

•CONSUMER DECISION-MAKING PROCESS

INTRODUCTION• The purchase is only the visible part of a more complex

decision process created by the consumer for each buying decision he makes.

• But what happens before and after this purchase? • What are the factors influencing the choice of product

purchased by the consumer?• Let’s focus on the Consumer Buying Decision Process and the

stages that lead to purchase a new product.

Five Factors Influencing Decisions1. Level of consumer involvement

2. Length of time to make decision

3. Cost of good or service

4. Degree of information search

5. Number of alternatives considered

LEVELS OF CONSUMER DECISION MAKING• Not all consumer decisions receive or require the same

amount of effort in the information search.• Researchers have identified three specific levels of

consumer decision making: i. extensive problem solving, ii. limited problem solving, and iii. routinized response behavior.

Types of Consumer Buying Decisions

More Involvement

LessInvolvement

RoutineResponseBehavior

LimitedDecisionMaking

ExtensiveDecisionMaking

Extensive Problem Solving• When consumers have no established criteria for

evaluating a product, or have not narrowed their choices, then they are in extensive problem solving.

• At this level, the consumer needs a great deal of information to establish a set of criteria on which to judge specific brands and a correspondingly large amount of information concerning each of the brands to be considered.

• Example- Used while buying expensive, important or technically complicated product or services.

Limited Problem Solving• At this level consumers have already established the

basic criteria for evaluating the product category but haven’t established preferred categories.

• Their search for additional information is more like “fine-tuning;” they must gather additional brand information to discriminate among the various brands.

• Example- Usually used when purchasing a new, updated version of something. Replacing something old with something new.

Routinized Response Behavior• At this level, consumers have some experience with the

product category and a well-established set of criteria with which to evaluate the brands they are considering.

• They may search for a small amount of additional information.• Routinized response behavior implies little need for

additional information.• Example- Day to day decisions.

Consumer Decision-Making Process

Postpurchase Behavior

Purchase

Evaluation of Alternatives

Information Search

Need Recognition

Cultural, Social, Individual and Psychological

Factors affect

all steps

Consumer Profile• Middle aged man• Lives in Delhi • Expected monthly income 35000• Been Driving Tata Indigo Diesel for 4 years • Daily drives atleast 25 kms. • Faces parking problem at workplace.

Need Recognition

• Recognition of a need occurs when a consumer is faced with a problem.

• Among consumers there seem to be two different problem recognition styles.

• Actual state types —consumers who perceive that they have a problem when a product fails to perform satisfactorily.

• Desired state types —the desire for something new may trigger the decision process.

Need Recognition• Fuel Efficient • Less maintenance• Good After Sales Service • More Space Internally • Price range 4,00,000-5,00,000• Convenience for servicing • Safety • Comfort

Prepurchase Information SearchInternal Information Search

Recall information in memory

External Information search

Seek information in outside environment

Non-marketing controlled Marketing controlled

- Advertising- Salespeople

- Infomercials

- Websites

- Point-of-sales materials

Sources of Information Marketer Dominated

- Friends- Family

- Opinion leaders

- Media

Non-Marketer Dominated Stimuli

Factors that are likely to increase pre purchase search1. Product factors2. Situational factors• Experience• Social acceptability • Value-related considerations3. Consumer factors• Demographic characteristics• Personality

Information SearchInternal : Memory and ExperienceFriends and Family, Magazines and MediaRespective Company sitesZig wheels Carwale.com Autos. Max about.com Auto Car India.comTest Drives

Evaluating Alternatives

Determine criteria to be used for evaluation of products

Assess the relative importance of the each criteria

Evaluate each alternative based on the identified criteria

Evoked Set

Purchase!

Evaluation of Products

Analyze product attributes

Use cutoff criteria

Rank attributes by importance

Evaluation of Alternatives

Evaluation of Alternatives• When evaluating potential alternatives, consumers tend to use

two types of information: • A “list” of brands (the evoked set).• The criteria they will use to evaluate each brand.

The evoked set refers to the specific brands the consumer considers in making a purchase in a particular product category.The inept set consists of brands the consumer excludes from purchase consideration as unacceptable.The inert set is those brands to which the consumer is indifferent because they are perceived as having no advantage.

Evaluation of Alternatives• Based on different parameters Many Cars were

evaluated some are:• Ford Figo • Chevrolet Beat • Maruti A-Star, Ritz, Swift, Wagon-R • Fiat Punto• Hyundai i 10

:  A Star ZXI Ritz Vxi Bs 4 i-10 Figo 1.2 ZXI Beat Wagon R

Fuel Economy 15km/ltr 16km/ltr 16.8km/ltr 15.6km/ltr 14.5km/ltr 18.9km/ltr

Engine type K10B K12M drive by wire technology

Irde 1.1 In line engine S-TEC II 16V K Series

Power steering

yes yes no yes yes yes

Ground clearence 170 mm 170 165mm 168mm 165mm 165mm

Price(Ex- show room)

4,18,000 4,35,616 4,23,000 4,08,600 4,75,000 4.,18,765

Dual Air-Bags Yes  No  yes  No  No  yes

Turning radius (mtrs)

4.7 4.7 4.7 4.9 4.8 4.6

 anti lock braking system

 yes  yes  yes  no  no  yes

Evaluation of Alternatives

Evaluation  A Star Ritz Vxi Bs 4 i-10 Figo 1.2

Duratec ZXIBeat Wagon R

Central locking

Yes Yes Yes Yes Yes Yes

Child Safety Lock

Yes Yes Yes No No Yes

Power Window

yes yes no yes yes Yes

Rear Defogger Yes No No Yes Yes Yes

PurchaseTo buy or not to buy...

Types of Purchases

Consumers make three types of purchases:

TrialPurchases

Repeat Purchases

Long-TermCommitmentPurchases

• Total set : All Cars

• Awareness set : Maruti, Tata, Hyundai, Honda,

volksvagon etc.

• Consideration set : Ford Figo, Chevrolet Beat, Maruti A-

Star, Ritz, Swift, Wagon-R, Fiat Punto,Hyundai i 10

• Decision set : Wagon-R

• Purchase set : Wagon-R

Why Wagon-R Vx i• Excellent Safety and Security Features• Highest Fuel Efficiency • Good After Sales service as this car is been in the market for a very

long time. • Largest number of service stations and dealers. 30 dealers in Delhi • Low turning radius- best suited for metropolitan cities (4.6 mtr)

Postpurchase BehaviorCognitive Dissonance

?Did I make a good decision?

Did I buy the right product?

Did I get a good value?

• As consumers use a product, they evaluate its performance in light of their own expectations.

• There are three possible outcomes of such evaluation.

• Actual performance matches the standard, leading to a neutral feeling.

• Positive disconfirmation when the performance exceeds the standard.

• Negative disconfirmation when the performance is below the standard.

Outcomes of Postpurchase Evaluation• Actual Performance Matches

Expectations• Actual Performance Exceeds

Expectations• Positive Disconfirmation of Expectations

• Performance is Below Expectations• Negative Disconfirmation of Expectations

THANK YOU