Consumer

Decision Making Process

Mr. Pulkit Srivastava 1

 Consumer Behavior

• Processes a consumer uses to make

purchase decisions, as well as to use
and dispose of purchased goods or
services; also includes factors that
influence purchase decisions and
the product use.

Mr. Pulkit Srivastava 2

 Understanding Consumer Behavior

consumers make purchase

decisions

Consumer behavior = HOW

consumers use and

dispose of product

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Five Factors Influencing Decisions

1. Level of consumer involvement

2. Length of time to make decision

3. Cost of good or service

4. Degree of information search

5. Number of alternatives considered

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 LEVELS OF CONSUMER DECISION
MAKING
• Not all consumer decisions receive or require the
same amount of effort in the information search.
• Researchers have identified three specific levels of
consumer decision making: extensive problem
solving, limited problem solving, and routinized
response behavior.

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 Types of Consumer Buying Decisions

Routine Limited Extensive

Response Decision Decision
Behavior Making Making

Less More
Involvement Involvement

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Extensive Problem Solving

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 Extensive Problem Solving
• At this level, the consumer needs a great deal of
information to establish a set of criteria on which to
judge specific brands and a correspondingly large
amount of information concerning each of the
brands to be considered.
• Example- Used while buying expensive, important
or technically complicated product or services.

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Limited Problem Solving

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 Limited Problem Solving
• At this level consumers have already established
the basic criteria for evaluating the product
category but haven’t established preferred
categories.
• Their search for additional information is more
like “fine-tuning;” they must gather additional
brand information to diffrentiate among the
various brands.
• Example- Usually used when purchasing a new,
updated version of something. Replacing
something old with something new.
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Routinized Response
Behavior

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 Routinized Response Behavior
• At this level, consumers have some experience
with the product category and a well-
established set of criteria with which to
evaluate the brands they are considering.
– They may search for a small amount of additional
information.
• Routinized response behavior implies little
need for additional information.
• Example- Day to day decisions.
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 Four Views of Consumer Decision
Making

Depicting how and why individuals behave as

they behave in decision making.

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• An Economic View
– Rationale in the economic sense, aware of all available product
alternatives, able to identify best alternatives

• A Passive View
– Irrational, impulsive, depending on promotions

• A Cognitive View
– Information Processor; either receptive or active,

• An Emotional View
– Joy, fear, love, hope, magic with certain purchase

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 An Economic View
• The consumer has often been characterized as making rational decisions.
– To behave rationally in the economic sense, a consumer would have
to:
• Be aware of all available product alternatives.
• Be capable of correctly ranking each alternative in terms of its
benefits and its disadvantages.
• Be able to identify the one best alternative.
– This perspective is unrealistic because:
• People are limited by their existing skills, habits, and reflexes.
• People are limited by their existing values and goals.
• People are limited by the extent of their knowledge.
• Consumers operate in an imperfect world, therefore the economic view is
often rejected as too idealistic and simplistic.

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 A Passive View
• Consumer basically are submissive to the self-serving
interests and promotional efforts of marketers (i.e., the
passive view).
• Consumers are perceived as impulsive and irrational
purchasers, ready to yield to the arms and aims of
marketers.
• The principal limitation of this model is that it fails to
recognize that the consumer plays an equal, if not
dominant, role in many buying situations by seeking
information about product alternatives and selecting the
product that appears to offer the greatest satisfaction.
• This view is largely unrealistic.

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 A Cognitive View
• Consumer are thinking problem solver.
• Model focuses on the processes by which consumers seek and
evaluate information about selected brands and retail outlets.
• In contrast to the economic view, this view recognizes that the
consumer is unlikely to seek all possible information, but will only
seek information until he/she has what is perceived as sufficient
information to make a satisfactory decision.
• This model depicts a consumer who does not have complete
knowledge, and therefore cannot make perfect decisions, but who
actively seeks information and attempts to make satisfactory
decisions.

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 An Emotional View
• In reality, when is comes to certain purchases or possessions, deep feelings
or emotions are likely to be highly involved.
• When a consumer makes what is basically an emotional purchase
decision, less emphasis tends to be placed on searching for prepurchase
information and more on the current mood or feelings.
• Unlike an emotion, which is a response to a particular environment, a
mood is more typically an unfocused, pre-existing state—already present
at the time a consumer “experiences” an advertisement, a retail
environment, a brand, or a product.
• Mood is important to consumer decision making in that it impacts when
consumers shop, where they shop, and whether they shop alone or with
others.
– Some retailers attempt to create a mood for shoppers.
• Individuals in a positive mood recall more information about a product
than those in a negative mood
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A MODEL OF CONSUMER DECISION
MAKING

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Consumer Decision-Making Process
Need Recognition

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

Postpurchase
Behavior
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 Need Recognition
Result of imbalance
between the present
Internal Stimuli
state and preferred and
state. External Stimuli

Preferred State

Present Status

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 Need Recognition
• Recognition of a need occurs when a
consumer is faced with a problem.
• Among consumers there seem to be two
different problem recognition styles.
– Actual state types —consumers who perceive that
they have a problem when a product fails to
perform satisfactorily.
– Desired state types —the desire for something
new may trigger the decision process.
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 Stimulus
Any unit of input affecting one or
more of the five senses:
 sight
 smell
 taste
 touch
 hearing Mr. Pulkit Srivastava 23
 Want

Recognition of an unfulfilled need and a product

(or attribute or feature) that will satisfy it.

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Recognition of Unfulfilled Wants
• When a current product isn’t performing
properly

• When the consumer is running

out of an product

• When another product seems superior to

the one currently used
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Prepurchase Information Search
Internal Information Search

 Recall information in memory

External Information search

 Seek information in outside environment

 Non-marketing controlled
 Marketing controlled

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Sources of Information
Marketer Dominated
- Advertising
- Salespeople
- Infomercials
- Websites
- Point-of-sales materials

Non-Marketer Dominated Stimuli

- Friends
- Family
- Opinion leaders
- Media
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 Factors that are likely to increase
prepurchase search
1. Product factors
2. Situational factors
• Experience
• Social acceptability
• Value-related considerations
3. Consumer factors
• Demographic characteristics
• Personality

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 Evaluating Alternatives
Determine criteria to be used for
evaluation of products

Assess the relative importance of the

each criteria

Evaluate each alternative based on the

identified criteria

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 Evaluation of Alternatives
Evoked Set
Evaluation of Products

Analyze product attributes

Use cutoff criteria

Rank attributes by importance

Purchase!
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 Evaluation of Alternatives
• When evaluating potential alternatives, consumers tend to
use two types of information:
– A “list” of brands (the evoked set).
– The criteria they will use to evaluate each brand.
The evoked set refers to the specific brands the consumer
considers in making a purchase in a particular product
category.
The inept set consists of brands the consumer excludes from
purchase consideration as unacceptable.
The inert set is those brands to which the consumer is
indifferent because they are perceived as having no
advantage.

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Mr. Pulkit Srivastava 32
 Consumer decision rules
1. Compensatory decision rules— a consumer evaluates brand options
in terms of each relevant attribute and computes a weighted or
summated score for each brand.
• The computed score reflects the brand’s relative merit as a
potential purchase choice.
• The assumption is that the consumer will choose the brand with
the highest score.
• A unique feature of a compensatory decision rule is that it allows a
positive evaluation of a brand on one attribute to balance out a
negative evaluation on some other attribute.

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2. Noncompensatory decision rules do not allow
consumers to balance positive evaluations of a
brand on one attribute against a negative evaluation
on some other attribute. Forms include:
• Conjunctive decision rule—the consumer establishes a
minimally acceptable level that is established as a
cutoff point for each attribute.
– If any particular brand falls below the cutoff point on any one
attribute, the brand is eliminated from consideration.
• Disjunctive rule—this rule mirrors the conjunctive
rule.
– The consumer establishes a minimally acceptable level as a
cutoff point for each attribute.
– In this case if a brand alternative meets or exceeds the cutoff
established for any one attribute, however, it is accepted.
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3. Lexicographic decision rule—the consumer
first ranks the attributes in terms of perceived
relevance or importance.
– The consumer then compares the various brand
alternatives in terms of the single attribute that is
considered most important.
– If one brand scores sufficiently high on this top-
ranked attribute, it is selected, and the process ends.
– The highest-ranked attribute may reveal something
about the individual’s consumer orientation.

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• Nine out of ten shoppers who go to the store for
frequently purchased items have a specific
shopping strategy for saving money.
– Practical loyalists—look for ways to save on those
brands and products that they would buy anyway.
– Bottom-Line Price Shoppers—buy the lowest-priced
item, with little or no regard for brand.
– Opportunistic Switchers—use coupons or sales to
decide among brands and products that fall within
their evoked set.
– Deal Hunters—look for the best “bargain” and are not
brand-loyal.
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 OUTPUT

• The output portion of the consumer decision-

making model concerns two closely associated
kinds of postdecision activity: purchase
behavior and postpurchase evaluation.
• The objective of both activities is to increase
the consumer’s satisfaction with his or her
purchase.
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 Purchase

To buy
or not to buy... Determines which attributes
are most important
in influencing a
consumer’s choice

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 Types of Purchases

Trial Repeat
Purchases Purchases

Long-Term
Commitment
Purchases

Consumers make three types of purchases:

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Postpurchase Behavior

Explains the consumer’s

post-purchase evaluation
process

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 Postpurchase Behavior
Cognitive Dissonance

?
Did I make a good decision?

Did I buy the right product?

Can minimize through:
Effective Communication
Follow-up
Guarantees
Warranties

Did I get a good value?

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• As consumers use a product, they evaluate its
performance in light of their own
expectations.
• There are three possible outcomes of such
evaluation.
– Actual performance matches the standard,
leading to a neutral feeling.
– Positive disconfirmation when the performance
exceeds the standard.
– Negative disconfirmation when the performance
is below the standard.

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An important aspect of the purchase
process is reducing postpurchase
cognitive dissonance, when consumers
try to reassure themselves that their
choice was a wise one.
.

cognitive dissonance is inner tension

that a consumer experiences after
recognizing an inconsistency between
behavior and values or opinions
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 Outcomes of Postpurchase Evaluation

• Actual Performance Matches Expectations

• Actual Performance Exceeds Expectations
– Positive Disconfirmation of Expectations
• Performance is Below Expectations
– Negative Disconfirmation of Expectations

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 Factors Determining
the Level of Consumer Involvement
Previous Experience

Interest

Perceived Risk of Negative

Consequences

Situation

Social Visibility

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Factors Influencing Buying Decisions

Cultural Social
Factors Factors
CONSUMER BUY /
DECISION-
MAKING DON’T BUY
Psycho- PROCESS
Individual logical
Factors Factors

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Cultural Influences on Buying
Decisions
Values

Language

Myths

Customs

Rituals

Laws

Material Artifacts
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 Social Influences
Social Influences on
Buying Decisions

Reference Groups Family Members

Opinion Leaders

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 Individual Influences

Individual Influences

Personality
Gender Self-Concept
Lifestyle
Age
Family Life Cycle

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Psychological Influences
Perception

Motivation

Learning

Beliefs & Attitudes

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THANK YOU

Mr. Pulkit Srivastava 51