UNIT 03 1

▪ Consumer decision making is a central part of consumer behavior

▪ The way we evaluate and choose products varies widely

▪ A decision is actually composed of a series of stages that results in the selection of

one product over competing options

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▪ Decision making is not always rational

▪ Our access to online sources is changing the way we decide what to buy

▪ Consumers rely upon different decision rules when evaluating competing options

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▪ Sometimes consumers are rational and sometimes they are not

▪ Consumers buy things at times with no advance planning, on an impulse, or do

something different from what was intended

▪ Consumers also react to purchase momentum which is when an initial impulse

purchase increases the likelihood that we will buy even more

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▪ People do have different thinking processing styles

▪ Some tend to have a rational system that processes information analytically and
sequentially using roles of logic while others rely on an experiential system of
thinking

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▪ It can help us to understand the decision-making process when we think about the
amount of effort that goes into a decision each time we must make it

▪ Consumer researchers think of decision effort on a continuum/scale/range

▪ On one end we have habitual decision making and at the other, there is extended
problem solving

▪ Many decisions fall somewhere in between, which we refer to as limited problem

solving

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▪ Habitual or routine response behavior is for low involvement products and these
decisions are made mostly out of habit

▪ Limited problem solving involves using decision rules to make choices

▪ Extended problem solving is for high risk choices

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 Extensive
Problem
Solving

Limited Problem
Solving

Routine Response
Behaviour

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 Routine Limited Extensive
Response Decision Decision
Behavior Making Making

Less More
Involvement Involvement

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 High Low
Involvement Involvement
Significant Complex Variety
Differences Buying Seeking
between brands Behavior Behavior

Few Habitual
differences Reducing Buying
Buying
Between Behavior
brands Behavior

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▪ Importance of the decision

▪ Extent of previous experience

▪ Existence of well-established decision criteria

▪ Amount of information at hand about each alternative

▪ The number of alternatives available

▪ Model of consumption being followed

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▪ When consumers make decisions, they go through a series of steps

▪ Problem Recognition

▪ Information Search

▪ Evaluation of Alternatives

▪ Product Choice

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 Problem Recognition

Information Search

Evaluation of Alternatives

Product Choice

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 Need Recognition

Information Search

Cultural, Social,
Individual and
Psychological Evaluation
Factors of Alternatives
affect
all steps
Purchase

Postpurchase
Behavior
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▪ Occurs when consumer sees difference between current state and ideal state

▪ The higher the gap, the stronger the need (or bigger the problem)

▪ Can be an essential need or an developed need

▪ Needs can be artificially created by marketers

▪ It can occur when a consumer’s state of being failure or when a consumer

recognizes an ideal state he or she wishes to achieve

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▪ Active Versus Inactive problems
▪ Active: those you are aware of
▪ Inactive: those that you are not yet aware of (but exist)

▪ Those that require immediate solutions and those that do not require immediate
solutions

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▪ When the current product/service is not satisfying the need

▪ When the consumer is running out of an product/service

▪ When another product/service seems superior to the one

currently being used

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 TIME

CHANGED
MARKET
INFLUENCES CIRCUMST-
ANCES

NEED

INDIVIDUAL PRODUCT
DIFFERENCES ACQUISITION

PRODUCT
CONSUMPTION

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 DESIRED ACTUAL
STATE STATE

DEGREE OF
DISCREPANCY
BELOW AT OR ABOVE
THRESHOLD THRESHOLD

NO NEED NEED
RECOGNITION RECOGNITION
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▪ Identify existing consumer problems and find solutions for these

▪ Lower the actual state

▪ Increase the desired state

▪ Increase the importance of the gap between actual and desired states

▪ Convert inactive problems to active problems

▪ Convert problems into ones requiring an immediate solution

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▪ The process by which we survey the environment for appropriate data to make a
reasonable decision
▪ Internal or external search
▪ Online search
▪ Once we know we have a problem, we search out how we can solve the problem
▪ These searches will typically take place before purchase
▪ However, many people just enjoy searching information and they conduct ongoing
searches even if a purchase is not immediately forthcoming
▪ Internal searches are based on our own memory banks while external sources come from
other sources
▪ Search engines have made vast amounts of information available to us as we search out
product information

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▪ Internal search involves the scanning of one's memory to recall
previous experiences or knowledge concerning solutions to the
problem/satisfying need

▪ Generally done for frequently purchased products/low involvement

products/services

▪ External search may be necessary when past experience or

knowledge is insufficient, the risk of making a wrong purchase
decision is high, and/or the cost of gathering information is low

▪ Generally done for high involvement products

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 •Family, friends, neighbors
Personal Sources •Most influential source of
information

•Advertising, salespeople
Commercial Sources •Receives most information
from these sources

•Mass Media
Public Sources •Consumer-rating groups

•Handling the product

•Examining the product
Experiential Sources •Using the product
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PERSONAL IMPERSONAL

Friends Newspaper articles

Neighbors Magazine articles
Relatives
Co-workers Consumer Reports
Computer salespeople Direct-mail brochures
Calling the electronics store Information from product advertisements
Web sites/Social Media/Blogs

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▪ Brands or alternatives available

▪ Evaluative criteria to be used

▪ Generally, product features

▪ Ratings of brands on evaluative criteria

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▪ Directed learning
▪ Existing product knowledge obtained from previous information search or experience of
alternatives
▪ Directed learning means we know about a product because we have previously sought
out information about that product

▪ Incidental learning
▪ Exposure over time to conditioned stimuli and observations of others
▪ It means that we are more passive. We learn about information because over time we
experience exposures to brand information.
▪ This is also called low-dose advertising or accidental search

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▪ Some consumers avoid external search, especially with minimal time to do so and
with durable goods (e.g. cars)

▪ Brand switching: we select familiar brands when decision situation is ambiguous

▪ Variety seeking: desire to choose new alternatives over more familiar ones

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▪ Selecting, organizing and interpreting information in a way to
produce a meaningful experience of the world is called perception

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 Monetary Risk

Functional Risk

Physical Risk

Social Risk

Psychological Risk

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▪ Monetary risk occurs when making a poor choice will have a monetary consequence.
Any purchase that costs a lot is subject to this risk

▪ Functional risk is the risk that the product may not function as the consumer needs

▪ Physical risk is the risk that the choice may physically threaten the consumer;
unhealthy, unhygienic, harmful

▪ Social risk is the risk that the choice will reflect poorly on the consumer and damage
his or her self-esteem or confidence or social image

▪ Psychological risk is the risk that one may lose self-respect due to making a bad
decision. For instance, expensive luxury goods could cause the consumer to feel
extensive guilt

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▪ Be brand loyal and ▪ Seek out information in
consistently purchase the order to make a well
same brand informed decision

▪ Buy the most expensive

▪ Buy through brand image and brand, which is likely to
purchase a quality national have high quality
brand
▪ Buy the least expensive
▪ Buy through store image from brand in order to reduce
a retailer that you trust financial risk

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▪ Consumers search for alternatives and evaluate these products

▪ Comparison of the products helps consumers to evaluate positives and negatives

of the products

▪ It helps to move to next step of buying the product

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 Product Attributes
Evaluation of Quality, Price, & Features

Degree of Importance
Which attributes matter most to me?

Brand Beliefs
What do I believe about each available brand?
Total Product Satisfaction
Based on what I’m looking for, how satisfied
would I be with each product?
Evaluation Procedures
Choosing a product (and brand) based on one
or more attributes

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 Degree of
LG SAMSUNG VIDEOCON SONY
Importance

5 Brand Name 4 4 2 5

Picture
4 4 4 2 5
Quality

3 Looks/Design 5 5 3 4

2 Price 3 4 5 2

After Sales
1 5 5 3 2
Service

LG 4x5 + 4x4 + 5x3 + 3x2 + 5x1 = 62

SAMSUNG 4x5 + 4x4 + 5x3 + 4x2 + 5x1 = 64
VIDEOCON 2x5 + 2x4 + 3x3 + 5x2 + 3x1 = 40
SONY 5x5 + 5x4 + 4x3 + 2x2 + 2x1 = 63
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▪ Once we assemble and evaluate relevant options from a category, we must choose
among them

▪ Decision rules for product choice can be very simple or very complicated
▪ Prior experience with (similar) product
▪ Present information at time of purchase
▪ Beliefs about brands (from advertising)

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 Consumer’s Expectations of
Product’s Performance

Product’s Perceived
Performance

Satisfied
Dissatisfied Customer
Customer!

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 Start

Need
recognition
Internal
search Influences
Search
• culture
Exposure
• social class
• family
Stimuli Attention Alternative • situation
(marketer evaluation
dominated, Memory
Comprehension
other) Individual
differences
Acceptance Purchase
• resources
• motivation &
Retention involvement
Outcomes • knowledge
• attitudes
• personality,
values, lifestyle
External
search
Dissatisfaction Satisfaction
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 •Product •Economic
Marketing and
•Price Other Stimuli
•Technological
•Place •Political
•Promotion •Cultural

Buyer’s Black Box Characteristics

Buyer’s Decision affecting consumer
Process behavior

•Product Choice • Purchase

•Brand Choice
Buyer’s Response Timing
• Purchase
•Dealer Choice Amount
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