CONSUMER

BEHAVIOR

INDIVIDUAL DECISION MAKING

Assignment-01
Syed Ali Raza Jafri
15973
 CHAPTER SUMMMARY: (INDIVIDUAL DECISION MAKING)
The consumer decision-making process can seem mysterious, but all consumers go through basic steps when making a
purchase to determine what products and services will best fit their needs. 

Think about your own thought process when buying something––especially when it’s something big, like a car. You consider
what you need, research, and compare your options before taking the plunge. Afterwards, you often wonder if you made the
right call. 

If you work in sales or marketing, make more of an impact by putting yourself in the customer’s shoes and reviewing the
steps in the consumer decision-making process.

Steps in the consumer decision process

Generally speaking, the consumer decision-making process involves five basic steps.

1. Problem recognition

The first step of the consumer decision-making process is recognizing the need for a service or product. Need recognition,
whether prompted internally or externally, results in the same response: a want. Once consumers recognize a want, they
need to gather information to understand how they can fulfill that want, which leads to step 2.

But how can you influence consumers at this stage? Since internal stimulus comes from within and includes basic impulses
like hunger or a change in lifestyle, focus your sales and marketing efforts on external stimulus. 

Develop a comprehensive brand campaign to build brand awareness and recognition––you want consumers to know you
and trust you. Most importantly, you want them to feel like they have a problem only you can solve.

Example: Winter is coming. This particular customer has several light jackets, but she’ll need a heavy-duty winter coat if
she’s going to survive the snow and lower temperatures.

2. Information search

When researching their options, consumers again rely on internal and external factors, as well as past interactions with a
product or brand, both positive and negative. In the information stage, they may browse through options at a physical
location or consult online resources, such as Google or customer reviews.

Your job as a brand is to give the potential customer access to the information they want, with the hopes that they decide
to purchase your product or service. Create a funnel and plan out the types of content that people will need. Present
yourself as a trustworthy source of knowledge and information. 

Another important strategy is word of mouth––since consumers trust each other more than they do businesses, make sure
to include consumer-generated content, like customer reviews or video testimonials, on your website.

Example: The customer searches “women’s winter coats” on Google to see what options are out there. When she sees
someone with a cute coat, she asks them where they bought it and what they think of that brand.

3. Alternatives evaluation
 At this point in the consumer decision-making process, prospective buyers have developed criteria for what they want in a
product. Now they weigh their prospective choices against comparable alternatives.

Alternatives may present themselves in the form of lower prices, additional product benefits, product availability, or
something as personal as color or style options. Your marketing material should be geared towards convincing consumer
that your product is superior to other alternatives. Be ready to overcome any objections––e.g., in sales calls, know your
competitors so you can answer questions and compare benefits.

Example: The customer compares a few brands that she likes. She knows that she wants a brightly colored coat that will
complement the rest of her wardrobe, and though she would rather spend less money, she also wants to find a coat made
from sustainable materials.

4. Purchase decision

This is the moment the consumer has been waiting for: the actual purchase. Once they have gathered all the facts,
including feedback from previous customers, consumers should arrive at a logical conclusion on the product or service to
purchase.

If you’ve done your job correctly, the consumer will recognize that your product is the best option and decide to
purchase.

Example: The customer finds a pink winter coat that’s on sale for 20% off. After confirming that the brand uses
sustainable materials and asking friends for their feedback, she orders the coat online.

5. Post-purchase evaluation

This part of the consumer decision-making process involves reflection from both the consumer and the seller. As a seller,
you should try to gauge the following:

 Did the purchase meet the need the consumer identified?

 Is the customer happy with the purchase?
 How can you continue to engage with this customer?

Remember, it’s your job to ensure your customer continues to have a positive experience with your product. Post-
purchase engagement could include follow-up emails, discount coupons, and newsletters to entice the customer to make
an additional purchase. You want to gain life-long customers, and in an age where anyone can leave an online review,
it’s more important than ever to keep customers happy.

The three categories of consumer decision-

making are cognitive, habitual and affective.
Consumer decision-making is a central part of
consumer behaviour, but the way we evaluate
and choose products (and the amount of
thought we put into these choices) varies
widely,
depending on such dimensions as the degree
of novelty or risk related to the decision. We
almost constantly need to make decisions
about products. Some of these decisions are
very
important and entail great effort, whereas we
make others on a virtually automatic basis.
Perspectives on decision-making range from a
focus on habits that people develop over time
to novel situations involving a great deal of
risk in which consumers must carefully
collect
and analyse information before making a
choice. The way we evaluate and choose a
product
depends on our degree of involvement with
the product, the marketing message, and/or
the
purchase situation. Product involvement can
range from very low, where purchase
decisions
are made via inertia, to very high, where
consumers form very strong bonds with what
they
The three categories of consumer decision-
making are cognitive, habitual and affective.
Consumer decision-making is a central part of
consumer behaviour, but the way we evaluate
and choose products (and the amount of
thought we put into these choices) varies
widely,
depending on such dimensions as the degree
of novelty or risk related to the decision. We
almost constantly need to make decisions
about products. Some of these decisions are
very
important and entail great effort, whereas we
make others on a virtually automatic basis.
Perspectives on decision-making range from a
focus on habits that people develop over time
to novel situations involving a great deal of
risk in which consumers must carefully
collect
and analyse information before making a
choice. The way we evaluate and choose a
product
depends on our degree of involvement with
the product, the marketing message, and/or
the
purchase situation. Product involvement can
range from very low, where purchase
decisions
are made via inertia, to very high, where
consumers form very strong bonds with what
they
INDIVIDUAL DECISION MAKING:

The three categories of consumer decision-making are cognitive, habitual and affective. Consumer decision-making is a
central part of consumer behaviour, but the way we evaluate and choose products (and the amount of thought we put into
these choices) varies widely, depending on such dimensions as the degree of novelty or risk related to the decision. We
almost constantly need to make decisions about products. Some of these decisions are very important and entail great
effort, whereas we make others on a virtually automatic basis. Perspectives on decision-making range from a focus on
habits that people develop over time to novel situations involving a great deal of risk in which consumers must carefully
collect and analyses information before making a choice. The way we evaluate and choose a product depends on our
degree of involvement with the product, the marketing message, and/or the purchase situation. Product involvement can
range from very low, where purchase decisions are made via inertia, to very high, where consumers form very strong
bonds with what they buy.

A cognitive purchase decision is the outcome of a series of stages that results in the selection of one product over
competing options. A typical decision involves several steps. The first is problem recognition, when we realize we must
take some action. This recognition may occur because a current possession malfunctions or perhaps because we have a
desire for something new. Once the consumer recognizes a problem and sees it as sufficiently important to warrant some

action, he or she begins the process of information search. This search may range from performing a simple memory scan
to determine what he or she has done before to resolve the same problem to carrying at extensive fieldwork during which
he or she consults a variety of sources to amass much information as possible. The worldwide web has changed the way
many of us search for information. Today, our problem is more likely to weed out excess detail than to search for more
information. Comparative search sites and intelligent agents help to filter and guide the search process. We may rely on

Cybermediary, such as web portals, to sort through massive amounts of information as a way to simplify the decision-
making process. In the evaluation of alternatives stage, the options a person considers constitute his or her evoked set.
Members of the evoked set usually share some characteristics; we categorize them similarly. The way the person mentally
groups products influences which alternatives she will consider, and usually we associate some brands more strongly with
these categories (i.e. they are more prototypical). When the consumer eventually must make a product choice from among
alternatives, he uses one of several decision rules. Non-compensatory rules eliminate alternatives that are deficient on any
of the criteria we’ve chosen.

Compensatory rules, which we are more likely to apply in high-involvement situations, allow us to consider each
alternative’s good and bad points more carefully to arrive at the overall best choice. Once the consumer makes a choice,
he or she engage in post purchase evaluation to determine whether it was a good one; this assessment in turn influences
the process the next time the problem occurs. The way information about a product choice is framed can prime a decision
even when the consumer is unaware of this influence. Principles of mental accounting demonstrate that the way a problem
is framed and whether it is put in terms of gains or losses influences what we decide. In addition, other cues in the
environment – including very subtle ones of which we may not even be aware – may prime us to choose one option over
another. A prime is a stimulus that encourages people to focus on some specific aspect of their lives. Much of the current
work in behavioral economics demonstrates how a nudge – a deliberate change by an organization that intends to modify
behavior – can result in dramatic effects.

We often rely upon ‘rules-of-thumb’ to make routine decisions. In many cases people engage surprisingly in little search.
Instead, they rely on various mental shortcuts, such as brand names or price, or they may simply imitate others’ choices.
We mause heuristics, or mental rules-of-thumb, to simplify decision-making. In particular, we develop many market
beliefs over time. One of the most common beliefs is that we can determine product’s country of origin as signals of
product quality. When we consistently purchase a brand over time, this pattern may be the result of true brand loyalty or
simply inertia because it’s the easiest thing to do. Perception is the process by which physical sensations such as sights,
sounds, and smells are selected, organized, and interpreted. The eventual interpretation of the stimulus allows it to be
assigned meaning