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CONSUMER DECISION
MAKING
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What is Decision ?
A decision is a choice between two or morealternative actions or behaviors.
Example : A housewife goes to purchase a midpriced range of tea, than making a selection fromthe various brands of tea like Taj Mahal, Tata Tea,Red label, Yellow label, etc. than she is makingdecision.
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Consumer decisions are decisions consumers m ak e in th e
marke tpla ce : invo lving
whether to purchase
what to purchasewhen to purchase
F rom whom to purchase
how to pay for the purchase
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Outl ines
Leve ls of Consumer Decision M ak ing
Mode ls of Consumer DecisionMak ing
Consumer Gif t ing Be ha vior
Relat ions h ip Marke t ing
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Leve ls of Consumer Decision
Mak ingExtensive Problem Solving
A lot of information neededMust establish a set of criteria for evaluation
Limited Problem SolvingCriteria for evaluation establishedF ine tuning with additional information
Routinized Response Behavior Usually review what they already know
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T h is Site He lps You Se arch and Es tabl ish Criteri a for
Choosing a Doctor
web link
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Ads of ten app eal to
consumers w ho are
loo king for
inform at ion to he lp
th em ev aluat e
p roduc ts.
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Mode ls of Consumers: Four Views of
Consumer Decision M ak ingAn Economic View how much satisfied, better money/price for thepurchases.
A Passive View consumer are perceived as impulsive purchasers, readyto yield to the aims and into the arms of marketers.
A Cognit ive View focused on the processes by which consumers seekand evaluate information about selected brands and retail outlets.
An Emo t ion al Viewassociate deep feeling or emotion such as joy,
love fear, hope, love, sexuality, fantasy and even a little magic.
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Goal Sett ing and Pursui t
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A Simple Mode l of Consumer Decision M ak ing
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T he Process of Consumer Decision
Mak
ing
N eed Recognition
Prepurchase SearchEvaluation of Alternatives
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Need Recogni t ion
Usually occurs when consumer has a problem
N eed recognition styles
Actual stateDesired state
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Pre purc ha se Se arch
Begins with internal search and then moves toexternal search
The impact of the InternetSearch may be personal or impersonal
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Issues in A ltern at ive Evaluat ion
Evoked se t Criteri a used for ev aluat ing brands Consumer decision ru les and th eir appl icat ion Decisions by func t ion ally illiter at e populat ion Going on line for decision-m ak ing assis ta nce Lifestyl es as a consumer decision s t rat eg y Incom ple te inform at ion Series of decisions Decision ru les and m arke t ing s t rat eg y
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T he Evoked Se t
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Issues in A ltern at ive Evaluat ion
Evoked Se t Criteri a used for ev aluat ing brands Consumer decision ru les and th eir appl icat ion Decisions by func t ion ally illiter at e populat ion Going on line for decision-m ak ing assis ta nce Lifestyl es as a consumer decision s t rat eg y Incom ple te inform at ion Series of decisions Decision ru les and m arke t ing s t rat eg y
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Consumer Decision Ru les
Compensatory
N oncompensatory
Conjunctive Decision RuleDisjunctive Decision RuleLexicographic Rule
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CompensatoryDecision Rules
A type of decisionrule in which a
consumer evaluateseach brand in terms
of each relevantattribute and thenselects the brand
with the highestweighted score.
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N on-
compensatoryDecision
Rules
A type of consumer decision rule by which positive evaluation of
a brand attribute doesnot compensate for anegative evaluation of
the same brand onsome other attribute.
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ConjunctiveDecision
Rule
A noncompensatory
decision rule in whichconsumers establish aminimally acceptablecutoff point for eachattribute evaluated.
Brands that fall belowthe cutoff point on any
one attribute areeliminated from further
consideration.
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DisjunctiveRule
A noncompensatorydecision rule in whichconsumers establish aminimally acceptablecutoff point for each
relevant product
attribute.
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L exicographicRule
A noncompensatorydecision rule -
consumers first rank product attributes interms of importance,then compare brands
in terms of the
attribute consideredmost important.
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Aff ect
Re f erralDecision
Rule
A simplified decisionrule by which consumers
make a product choiceon the basis of their
previously establishedoverall ratings of the
brands considered, rather
than on specificattributes.
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Issues in A ltern at ive Evaluat ion
Evoked Se t Criteri a used for ev aluat ing brands Consumer decision ru les and th eir appl icat ion
Decisions by func t ion ally illiter at e populat ion Going on line for decision-m ak ing assis ta nce Lifestyl es as a consumer decision s t rat eg y Incom ple te inform at ion Series of decisions Decision ru les and m arke t ing s t rat eg y
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T he Decision Process for Func t ion ally Illiter at e
Consumers
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Issues in A ltern at ive Evaluat ion
Evoked Se t Criteri a used for ev aluat ing brands Consumer decision ru les and th eir appl icat ion
Decisions by func t ion ally illiter at e populat ion Going on line for decision-m ak ing assis ta nce Lifestyl es as a consumer decision s t rat eg y Incom ple te inform at ion Series of decisions Decision ru les and m arke t ing s t rat eg y
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T here Are a Growing Num ber of Web Sites to
Help Consumers C hoose Produc ts
web link
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Issues in A ltern at ive Evaluat ion
Evoked Se t Criteri a used for ev aluat ing brands Consumer decision ru les and th eir appl icat ion
Decisions by func t ion ally illiter at e populat ion Going on line for decision-m ak ing assis ta nce Lifestyl es as a consumer decision s t rat eg y Incom ple te inform at ion Series of decisions Decision ru les and m arke t ing s t rat eg y
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Cop ing wi th Missing Inform at ion
Delay decision until missing information is obtained
may Ignore missing information and use availableinformation
may Change the decision strategy to one that better accommodates for the missing information
Infer (construct) the missing information
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Issues in A ltern at ive Evaluat ion Evoked set
Criteria used for evaluating brands
Consumer decision rules and their application
Decisions by functionally illiterate population Going online for decision making assistance
Lifestyles as a consumer decision strategy
Incomplete information
Series of decisions
Decision ru les and m arke t ing s t rat eg y
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A Purcha se Can Invo lve a Num ber ofDecisions.
Wh en purc ha sing c ar, th e buyer is
invo lved in a num ber of decisions th e
mak e, mode l, coun t ry of origin, th e
de aler, th e fin ancing, and differen t
opt ions.
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Outp ut of Consumer DecisionMak ing
Purchase behavior
Post purchase evaluation
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Purc ha se Be ha vior
Three types of behavior Trial purchasesRepeat purchasesLong-term commitment
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Pos t purc ha se Evaluat ion
Actual Performance Matches ExpectationsN eutral F eeling
Actual Performance Exceeds ExpectationsPositive Disconfirmation of Expectations
Performance Is Below ExpectationsN egative Disconfirmation of Expectations
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T h is art icle in Cargois designed to he lp
a re ader reduceth eir pos t purc ha se
de p ression.
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Gift ing Be ha vior
Gifting is an act of symbolic communication, withexplicit and implicit meanings ranging fromcongratulations and love, to regret, obligation, and
dominance.
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An Incre asing Num ber of Gif t Purc ha ses Are Now
Made On line
web link
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Reported Circumstances and Motivationsfor Self-Gift Behavior
CIRCUMST AN CES
P ersonal accomplishmentFeeling downHolidayFeeling stressedHave some extra money
NeedHad not bought for self in a whileAttainment of a desired goalOthers
MOTIV A TIO N S
To reward oneself To be nice to oneself To cheer up oneself To fulfill a needTo celebrateTo relieve stressTo maintain a good feelingTo provide an incentive toward a goalOthers
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Gifting Relationships
G IFTI N G G IFTI N G RE LA TIO N SHIPRE LA TIO N SHIPIntergroup
Intercategory
EX A MP L EEX A MP L EDEFI N ITIO NDEFI N ITIO N
A Christmas gift from onefamily to another family
A group giving a gift toanother group
A group of friends chips into buy a new mother a babygift
An individual giving a gift to agroup or a group giving a giftto an individual
Intragroup
Interpersonal
A family buys a VCR for itself as a Christmas gift
A group giving a gift to itself or its members
Valentines Day chocolates presented from a boyfriendto a girlfriend
An individual giving a gift toanother individual
Intrapersonal A woman buys herself jewelry to cheer herself up
Self-gift
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A Simple Mode l of Consum pt ion
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RelationshipMarketing
M arketing aimed at
creating strong,lasting relationshipswith a core group of customers by makingthem feel good aboutthe company and by
giving them some
kind of personalconnection with the
business.
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Proc tor & Gamble Builds
Relat ions h ips wi th T
heir Br ands
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Stat e Farm
Insur ance s t resses
re lat ions h ip
marke t ing in th eir
adver t ising.