Consumer

Decision
Making Process
Ms. Vaishali Chaudhari
 Definition
 Processes the consumer uses to
make purchase decisions, as well as
the use and disposal of the purchased
good or service.
Consumer Decision
Processes

Individual Environmental
Influence Influences

Need Recognition
Internal External
Search Information Search Search

Pre-purchase Evaluation

Purchase

Consumption & Post-

consumption Evaluation
 Types of decisions
 Nominal
 Limited

 Extended

Purchase situations
 In store purchase situation

 Gift giving situation

 Unanticipated purchase situations

Need / Problem Recognition
 It is the perceived difference between
an ideal land an actual state
 Psychological model of need
recognition :

INPUT Consumer’s STIMULUS

VARIABLES Psychological set EXPOSURE

Need
Recognition
 Input Variables
 The consumer’s needs and attitudes at a given time
are a function of various input variables. These are
 (1) Consumer’s past experience,
 (2) Consumer characteristics,
 (3) Their motivations,
 (4) Environment influences, and
 (5) Past marketing stimuli (product, price,
promotion, and in-store strategies directed to the
consumer.)
 These input variables and the consumer’s
psychological set influence the types of stimuli the
consumer experiences (seeing advertising, noticing
the product on the shelf, hearing about it from
friends). The result could be recognition of a need for
a product or brand.
1. Consumer’s Past Experiences
Customer may emphasize economy, service
dependability, performance, and comfort, on the basis of
their past experience.
2. Consumer Characteristics
 Demographics, life-style, and personality affect attitude
towards brand
 Income may affect the type of product purchased eg. In car :
compact, standard, or luxury
 Age, marital status, and number of children may affect the
class of car-sports car, family car
 Lifestyle may affect the make

 A socially oriented, outer-directed couple may want a car that

impresses others and may stress styling and size of car.
 A family that travels a lot may emphasize comfort at the
expense of styling.
 The power oriented, aggressive individual may want a car
with a great deal of acceleration.
 The compulsive individual may stress regular service needs
and better warranty terms.
3. Consumer Motives:
 Motives are general pre-dispositions that direct behavior
toward attaining certain desired objectives.
 Common motives may include factors such as possession,
economy, curiosity, dominance, pleasure, and imitation.
 The five levels of motives from lowest to highest are:

 1. physiological (food, water, shelter, sex);

 2. safety (protection, security, stability);
 3. social (affection, friendship, acceptance);
 4. ego (prestige, success, self-esteem);
 5. Self-actualization (self-fulfillment).
4. Environmental Influences
 Family members

 Neighbors and business associates

 Cultural norms and values

5. Past Marketing Stimuli

Advertising, in-store stimuli, and sales representatives.
 Types of problem
recognition
Expectancy of Immediacy of solution
problem
Immediate Imm. Solution
solution required not required

Occurrence of Routine Planning

problem expected

Occurrence Emergency Evolving

unexpected
 Situations leading to Problem
Recognition
 Depleted Or Inadequate Stock Of
Goods
 Discontentment With Stock Of

Good
 Changing Environmental

Circumstances(reference group, locality)

 Changing Financial Circumstances

 Marketing Activities
 Marketing Implications
1. MEASURING PROBLEM RECOGNITION:

Best is scaling techniques, which measure purchase intentions

Predisposition Attitudes
 
1 Firm and immediate intent “I am going to buy some right away,”
to buy a specific brand. “I am going to buy some soon.”

2 Positive intention without “I am certain l will buy some sometime”

definite buying plans. “I probably will buy some sometime,”

3 Neutrality: Might buy, “I may buy some sometime.”

might not buy. “I might buy some sometime, but I doubt it.”

4 Inclined not to buy the “I don’t think I’m interested in buying any.”
brand but not definite “I probably will never buy any,”
about it.
5 Firm intention not to buy “I know I’m not interested in buying any.”
the brand. “If somebody gave me some. I would give it
away, just to get rid of it.”

6 Never considered buying. “I have never heard of the brand.”

2. ACTIVATING PROBLEM RECOGNITION & INFLUENCING
THE DESIRED STATE
 Generic (increase product usage Eg. Ordinary
tap water is not safe, Nestle pure life mineral
water)
 Selective (increase brand usage, Eg. You get a
job or money back, NIIT)
3. Research Approach
 Activity analysis (cleaning house, preparing
means, travel by train)
 Product analysis
 Problem analysis
 Human factor research (functional problem
consumers are not aware)
 Emotion research (PI or projective tech)
 MANAGERIAL
REFLECTIONS

For our product or service situation…

 * What types of problem-recognition situations typify our
customers: routine, emergency, planning, and/or
evolving?
 * What factors typically constrain further purchasing
process activity by the consumer, and how may we help
the removal of such barriers?
 * What intentions to purchase do consumers express?
 * How may we help activate the consumers’ problem-
recognition process by emphasizing their desired state,
actual state, or the level of discrepancy between the two?
 * How is consumers’ predisposition to buy shifting over
time? To what extent are favorable intentions being
converted to purchase?
 Information Search
 Information may be considered to be
knowledge obtained about some fact or
circumstance.
 “Search” refers to mental as well as physical
information seeking and processing
activities, which one engages in to facilitate
decision making regarding some goal-object
in the marketplace (prices, stores) related to
the product.
 Search may be categorized as
* Pre purchase or ongoing (based on the
purpose of search)
* Internal or external (based on its source).
 Internal Search
Three types of recalls are Retrieved from Internal
Search
(1) brand (2) attributes
(3) experiences
1. Brand Recall
 Research has found a strong relationship between
brand recall and choice.
 An interesting study found that consumer’s choices
could be altered simply by manipulating which
brands consumers could recall, even though there
was no change in the preferences for these brands.
 If consumers cannot recall brands from memory in
order to form a consideration set, the set will tend to
be determined by external factors such as
availability or salespeople.
2. Recall of Attributes
 Consumers often cannot remember specific facts
about a product or service because memory for
details decreases over time & due to selective
retention & attention. Hence consumers recall
attribute information, it tends to be in summary or
simplified form rather than in its original detail.
3. Recall of Experiences
 Marketers want consumers to recall positive
experiences in relation to their product or service.
Hence marketers often associate their products or
services with common positive experiences or
images in order to increase their recall from
memory.
 Is Internal Search
Always Accurate?
Confirmation Bias
 We are more likely to recall information that
reinforces rather than contradicts our overall beliefs
 Selective perception-we see what we want to see-
and occurs because we strive to maintain
consistency in our views
 We are more likely to recall positive than negative
information about these favored brands (problem
when customer do this with competitors brand)
 Solution : draw attention to negative aspects of
competitive brands in comparative advertising. If
comparative information can be presented in a
convincing and credible way, marketers may be
able to overcome this bias.
Mood
 Consumers engaged in internal search are
most likely to recall mood-congruent
information, feelings, and experiences.
 Marketing communications that put
consumers in a good mood (through the use
of humor, attractive visuals, etc.) can enhance
the recall of positive attribute information.
 External Search
KIND OF INFORMATION IS ACQUIRED IA ACQUIRED IN
EXTERNAL SEARCH :
 Brand name
 Price
 Other attributes
 Evaluation criteria
Sources of information in external Search

(1) marketer-dominated sources (salespeople,

packaging, and other sources under the control of
the marketer )
(2) consumer sources (all those interpersonal
communications not under the control of the
marketer)
(3) neutral sources (mass media)
Some Research Findings on
external search
 Research suggests that consumers typically consult
few information sources finds, articles , advertisements,
and so on before making a purchase. For example, one
study showed that prior to purchase, 15 % of major
appliance and car buyers consulted no information
sources, while 30 % consulted only one, and 26 %
consulted two.
 In terms of outlets visited, various studies suggest that
approximately 40 to 60 percent of shoppers visit only
one store before making a purchase. This appears to
hold across both durable and non durable goods.
 Shoppers also appear to acquire limited amounts of
information about the brands actually under
consideration. One study found that out of the 560 items
of readily available information to consider when
choosing among sixteen brands of cereal, median
number of items reviewed were only seven
Some consumer’s own characteristics influence the degree of
external-search activity. Relevant findings:
 1. Greater market experience with a product is
associated with a lower degree of external search.
 2. Open-mindedness and self-confidence of consumers
have been found positively related to greater search
activity.
 3. Socio-economic characteristics have been related to
search. Higher educational levels and income have been
associated with greater search, while a reduction with
increasing age.
 4. Consumers differ in their ability to process information,
and if their processing limits are reached, the effect may be
to decrease the extent of external search.
 5. Higher levels of consumer involvement with a product
appear to be associated with a great degree of external
search.
 Types of Risks leading to
External Information Search
 1. Financial risk The consumer may lose money
if the brand doesn’t work at all or costs more than it
should to keep it in good shape.
 2. Performance risk The brand may not work
properly.
 3. Physical risk The brand may be or become
harmful or injurious to one’s health.
 4. Psychological risk The brand may not fit in
well with the consumer’s self-image or self-concept.
 5. Social risk The brand may negatively affect
the way others think of the consumer.
 6. Time-loss risk The brand may fail completely,
thus wasting the consumer’s time, convenience, and
effort getting it adjusted, repaired, or replaced.
 How consumer deal with
risk ?
 1. Buy a major. Well-known brand.
 2. Buy the brand that has been tested and
approved by a private testing company.
 3. Buy the brand offering a money-back guarantee
with the product.
 4. Buy the brand whose advertising has
endorsements or testimonials from typical consumers.
From a celebrity, or from an expert on the product.
 5. Buy the brand that the consumer has used
before and has found satisfactory.
 6. Buy the brand that has been tested and
approved by a branch of the government.
 7. Buy the most expensive and elaborate model of
the product.
Marketing Implications
 make information readily available and easily
accessible (at the lowest cost and effort to the
consumer) to facilitate the decision process.
 Providing information on salient and diagnostic
attributes, particularly if the brand has a differential
advantage.
 Marketers should also segment the market for any
product or service according to search activity.
(high searchers Vs low searchers)
 Attempt to stimulate external search by providing
low searchers information in a highly accessible
manner
 Provide consumers with incentives to search
(electronic points)
Step 3. Evaluation of Alternatives

Consumer
Consumer May
May Use
Use Careful
Careful
Calculations
Calculations &
& Logical
Logical Thinking
Thinking

Consumers
Consumers May
May Buy
Buy onon Impulse
Impulse and
and
Rely
Rely on
on Intuition
Intuition

Consumers
Consumers May
May Make
Make Buying
Buying Decisions
Decisions
on
on Their
Their Own.
Own.

Consumers
Consumers May
May Make
Make Buying
Buying Decisions
Decisions
Only
Only After
After Consulting
Consulting Others.
Others.
Marketers Must Study Buyers to Find
Out How They Evaluate Brand
Alternatives
 Evaluation of Alternatives
During search, the brand alternatives to the buyer’s
product choice decision are identified. Among
brands of which the consumer is aware, he would
not consider purchasing some of them for several
reasons.
 He may feel they are beyond his financial reach

 They are not perceived as adequate for his motives

 He has insufficient information on which to evaluate

them
 He has tried and rejected them

 He is satisfied with his current brand

 He has received negative feedback from advertising

or from word-of-mouth communication.

It has been suggested, therefore, that there actually
exist three subsets of brands within the awareness
set of alternatives: (1) evoked set, (2) inert set, (3)
inept set
 The evoked set consists of the few select brands
evaluated positively by the consumer for purchase
and consumption. These are the brands the
consumer would be willing to consider further.
 The inert set consists of those brands that the
consumer has failed to perceive any advantage in
buying: that is, they are evaluated neither positively
nor negatively. Perhaps the consumer has
insufficient information on which to evaluate them or
he simply may not perceive them as better than the
brands in his evoked set.
 The inept set is made up of brands that have been
rejected from purchase consideration by the
consumer because of an unpleasant experience of
negative feedback from others.
How consumers process the information
on their evoked set of brands?
 Two broad approaches
* Choice by processing attributes (CPA)
# one attribute at a time
* Choice by processing brands (CPB)
# one brand at a time
 Mostly CPA is followed by CPB for major
purchases
 Consumers may either use compensatory
processes or non-compensatory processes
as decision rules.
FACTORS INFLUENCING THE
AMOUNT OF EVALUATION
* Urgency of the need (More urgent, less evaluation)
* Significance the product is to the buyer (house, car,
and boat, greater the amount of evaluation)
* Complexity of the alternatives (more complexity,
more evaluation)
 Marketing Implications of
Evaluation of Alternatives
1. DETERMINING WHICH CRITERIA ARE USED BY
CONSUMERS
Different Approaches :
A] Directly asking consumers what factors they
consider when they compare alternatives for
purchase through survey questionnaire or FGDs
Drawbacks
 assumes that consumers know why they buy or
prefer one product to another
 assumes that they are willing to provide the
requested information(they may provide the
researcher with “ socially acceptable” responses
rather than their true feelings)
 They may have forgotten what the most important
criteria were in a recent purchase
B] Indirect approach : Marketer ask the consumer
what evaluative criteria she thinks “someone else”
would use. This type of questioning allows
consumers to acceptably project their own attitudes
through another individual or ask someone else.
C] Perceptual mapping
Multidimensional scaling (MDS) : Consumers rate two
brand alternatives at a time along a scale
2. DETERMINING THE IMPORTANCE OF CRITERIA
USED BY CONSUMERS
 Use of a rating scale ( unimportant to important)

 Semantic deferential (high price & low price)

 Constant sum scale (allocate 100 points across the

evaluative criteria according to their judgement of
each one’s importance).
 Conjoint analysis

3. INFLUENCING CONSUMERS EVALUATION

Step 4. Purchase Decision

Purchase
Purchase Intention
Intention
Desire
Desire to
to buy
buy the
the most
most preferred
preferred brand
brand

Attitude Unexpecte
s of d
Others Situational
Factors

Purchase
Purchase Decision
Decision
Types of Purchases

Trial Repeat 
Purchases Purchases

Long-Term
Commitment
Purchases
Step 5. Postpurchase Behavior

Satisfied Customer!

Dissonance
Cognitive Dissonance
Consumer’s
Expectations of Product’s Performance.
Product’s Perceived
Performance.

Cognitive
Dissatisfied Customer
 Outcomes of
Postpurchase Evaluation
 Actual Performance Matches
Expectations
– Neutral Feeling
 Actual Performance Exceeds
Expectations
– Positive Disconfirmation of Expectations
 Performance is Below Expectations
– Negative Disconfirmation of Expectations