Presented to the Faculty of the

Department of Management Sciences

KASBIT University

SMCHS Campus
In the fulfillment of the course
“Consumer Behavior”
Assignment-01
Bachelors in Business Administration
Submitted to
Dr. Amir Adam

By
Hira Raza-15972
BBA 2 Years
December (2021)

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Table of Contents

S. No PARTICULARS PAGE
ABSTRACT------------------------------------------------------------------------- 03

1.1 Types of Decision making process----------------------------------------------- 04

1.2 Stages in Decision making-------------------------------------------------------- 04
Cognitive …………………………………………………………………. 04
Habitual ………………………………………………………………….. 04
Affective…………………………………………………………………. 04
Problem? .................................................................................................... 04
Hyper choice……………………………………………………………… 04
Self-Regulation…………………………………………………………… 05
1.3 Steps in decision making process------------------------------------------------ 05
Problem Recognition……………………………………………………… 05
Information Search………………………………………………………... 05
Evaluation of Alternatives………………………………………………… 05
Product Choice……………………………………………………………. 05
Outcomes…………………………………………………………………. 05
1.4 Product Categorization------------------------------------------------------------
06
1.5 Levels of Product Categorization------------------------------------------------- 06
Basic………………………………………………………………………. 06
Superordinate……………………………………………………………… 06
Subordinate ……………………………………………………………….. 06
1.6 Strategic Implementation of Product Categorization-------------------------- 06
1.7 Evaluation Criteria----------------------------------------------------------------- 07
1.8 Compensatory Rule----------------------------------------------------------------- 07
1.9 Non-Compensatory Rule---------------------------------------------------------- 07
Lexicographic rule………………………………………………………... 07

Elimination by aspect rule………………………………………………… 07

Conjunctive Rule…………………………………………………………. 07

2.1 Heuristics---------------------------------------------------------------------------- 07
2.2 Roles in Collective Decision making-------------------------------------------- 08

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INDIVIDUAL DECISION MAKING
CHAPTER-9 (CONSUMER BEHAVIOR)

Individual Decision Making is an art and psychology of consumer behavior.

A brief Summary of Chapter-9 (Decision Making)

A R T I C L E I N FO ABSTRACT

Article history:
This Assignment presents a brief overview of studies on consumer
Prepared on 27th Dec 2021
Available online xxx psychological behavior and individual decision making. Decision making
From the Journals of Human
Psychology
is an important process and some are more important than others, the
Keywords:
amount of effort to take decision differs from one another. Consumer
Habitual Decision making
Hybrid products Behavior is to understand the Psyche of the consumer. It is the consumer
Implementation intentions
Inertia
Information search who make decisions with regards to purchase as well as to consume the
Juggling lifestyle
Mental Budget product and to dispose it off. Taking individual decisions are less costly
Post-purchase evaluation
Prediction market
Problem recognition than the decision taken with consultations. The consumer’s ultimate goal is
Product authenticity
Purchase momentum to identify the best possible alternatives by comparing various features of
Straight re-buy
Search Engines
Rationale Perspective the products such as the brand, quality, price etc. These decision are

influenced by several factors like cultural, physiological and other factors.

Karachi,
Pakistan

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This Chapter summarizes as:
1.1 Three types (Buckets) of Decision making Processes.

Cognitive Habitual Affective

1.2 Stages in Decision Making

Cognitive:
 It is mostly deliberate
 Sequential
 Rationale
 High involvement Purchase
 Time taking
 Example: Buying Car, house etc.
Habitual:
 Spontaneous
 Automatic
 Unconscious
 Behavioral
 Low involvement purchase
 Learned response to environmental cues
 Routinized behavior
 Example: Going to Petrol station to refill petrol
Affective:
 Emotional
 Instantaneous
 Comfort buying
 Example: Buying something to reduce depression or stress.
Problem?
Consumer’s hyper choice:
 A lot many choices/alternatives that drains/ exhausts consumer’s energy.
 Constructive processing

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  Mental Budget: The allocation of amount and time consumed to take decisions.

Self-Regulation:
 Intentions to implement something.
 Counteractive Construal: Exaggeration of benefits or risks of one’s own choice.
 Feedback loop: Based on the situation we conceive ourselves to take a decision whether good or
bad.
 Morning Morality effect: This shows that the people are more likely to cheat, lie or commit fraud
in the afternoon than in the morning.
 Executive Control Centre: People have to devote more energy to a simple task.
1.3 Steps in Decision Making Process

Problem Recognition

It occurs when a consumer finds the difference between the current and the ideal state.
 Need Recognition: Is when the actual/ current states decline.
 Opportunity Recognition: Is when the idea state moves upwards.

Information Search

It is a process by which consumer surveys their environment for appropriate data.

 Pre-purchase search: Consumer searches the market once the need is
recognized.
 Ongoing search: Browsing, staying up to date with trends.
 Internal search: scanning own memory.
 External search: advertisements, friends, word of mouth etc.
 Selective search: means effective and focused efforts.

Evaluation of Alternatives

 Evoked Set: Alternatives the consumer knows /Products we think about

 Consideration Set: The alternate options that a consumer can actually consider.

Product Choice

Choice can be influenced by information from prior experience of using a product, info
available at the time of purchase and belief in the brands.
 Feature Creep: a product that has many features making it hard to operate

Outcomes/ Post Purchase Evaluation

5|Page The objective of post purchase evaluation is to increase consumer satisfaction. With the
purchase decision made.
1.4 Product Categorization:
Categorization of product mentally is done on the basis of its comparisons, appearance, price, attributes
etc. (The factual knowledge about products and the way this knowledge is organized in people’s mind.
1.5 Level of Product Categorization:
 Basic Level Category: Items have much in common but a number of alternatives exists. Most
useful in classifying products.
 Superordinate Category: Broad and abstract
 Subordinate Category: Individual brands
Example:

Beverages

Superordinate Level

Hot Beverages Basic Level Cold Beverages

Danedar Soft Drinks

Subordinate
Mixture Juices
Level
Energy Drinks
Dust

1.6 Strategic Implementation of Product Categories:

Marketers has a lot of strategic implications as the way products are categorized. The category of the
product affects the consumption and comparison of a product.
 Position of a product: The positioning strategy and its success depends on the ability of the
marketer to convince the consumer that product is strong and competent enough to be considered
into a particular category.
 Identifying Competitors: Are the available products substitutes of each other as we often face
this to choose between a non-comparable categories or cannot directly relate to the attributes of
the category.
 Creating an exemplar Product: These are the most commonly known, accepted product or
brand in a category.
 Locating Products: Locating a product under a correct category is important and failing to do so
will not allow a consumer to locate the desired product on the certain expected place in the store.

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1.7 Evaluative Criteria:
To select among alternative dimensions are used to judge the merits of competing options.
Determinant Attributes: These are those attributes that actually determines the buyer’s final choice.
Recommendation of new decision criteria:
 Significant/ notable difference amongst the brands.
 A unique decision making rule should be communicated to the consumer.
 The rule conveyed should be in a way that is effective and should tell how the consumer made the
decision on different occasions.
1.8 Compensatory Rule:
 Simple additive rule leads to the option with the largest number of positive attribute.

 Weighted additive rule

allows consumer to take in to
account the relative
importance by
 weighting
 Weighted additive rule
allows consumer to take in to
account the relative
importance by
 weighting
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  Weighted additive rule
allows consumer to take in to
account the relative
importance by
 weighting
 Weighted additive rule
allows consumer to take in to
account the relative
importance by
 weighting
 Weighted additive rule allows consumer to take in to account the relative importance by
weighting.
1.9 Non-Compensatory Decision Rule:
Product with low standing on one attribute can compensate this with a different better attribute.
Lexicographic Rule:
 Selecting brand that is best on the most important attribute.
 If there is more than brand equally good, look at the second most important attribute.
Elimination by aspect rule:
 Buyer evaluates brands on the most important aspects.
 Specific Cut-offs
Conjunctive Rule:

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  Processing the brand
 Decision-maker


establishes cut offs for each

specific attribute
 Choose a brand if it


passes all the cut offs

 Failure to meet cut offs


-> rejection
 Processing the brand
 Decision-maker


establishes cut offs for each

specific attribute
 Choose a brand if it


passes all the cut offs

 Failure to meet cut offs


-> rejection
 Processing the brand
 Decision-maker establishes cut offs for each specific attribute.
 Choose a brand if it passes all the cut offs.
 Failure to meet cut offs-rejection.

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2.0 Heuristics:
A habitual decision as rule of thumb that is mentally dealt to simplify decision-making and make speedy
decisions. These decisions ranges from general to specific i.e. from higher priced products are considered
to be higher quality product and the specific product may be some specific brand.
This also includes:
Covariation:

 nfer hidden dimensions of

products from attributes we can
obserce
 Visible elements act as
product signal
 Communicates SOME
underlying quality
 Only incomplete information
 Base or judgements on
beliefs about co-variation
 Co variation: associations we
have among events that may or
may not actually influence each
other
 Infer hidden dimensions of products from attributes we can observe.

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  Visible element act as product signal
 Communicates some underlying qualities
 Only incomplete information

 Country of Origin
 Family brand names
 Higher prices

2.1 Roles in Collective decision making

 Initiator
 Gatekeeper
 Influencer
 Buyer
 User

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