CONSUMER DECISION

MAKING
- By Vidushi Sharma
•quickly list 10 items you have purchased
in the past month

•reexamine how long it took you to make a

decision on each

•why did such a difference in decision

occur?
 Types of Decision Making
1. Routinised response behavior/ Habitual buying behavior
• Simple, low cost, frequent purchasing, not much search for
information, clear preference for brand.
2. Limited problem solving/ Dissonance reducing buying behavior
• New brand in known product class, moderate information
search and time in choosing
3. Extensive problem solving/ Complex buying behavior
• Unfamiliar product class, criteria not known, need for
information search, longer time in decision.
 Routine Problem Limited Problem Extensive
Solving Solving problem Solving

Purchase Low Medium High

involvement level

Problem Automatic Semiautomatic Complex

Recognition

Information Minimal Limited Extensive

search and
evaluation

Purchasing Convenience Mixed Shopping

orientation

Postpurchase Very Limited Limited Complex

processes
 Buying Motives
• ‘Motive’ can be a strong desire, feeling, an
urge from within, a drive, stimulus or
emotion which plays a role in consumer
decision to purchase a product.

• Prof D. J. Duncan: “ those influences or

considerations which provide the impulse
to buy, induce action or determine
choicein purchase of goods”
 BUYING MOTIVES

Product motive
Patronage motive

Emotional
Emotional

Rational
Rational
 INPUT

Need Recognition

Process Pre purchase Search

Evaluation Of
Alternatives

Output Purchase

Post Purchase Evaluation

Input:-

1. Firms Marketing Efforts

• Product
• Price
• Place
• Promotion

2. Socio-Cultural Environment
• Family
• Social classes
• Culture and Sub-culture
• Informal sources
Need Recognition:-
• Consumer recognizes a need when is
faced with a problem.

• Two types of problem recognition

 Actual state type of problem
 Desired state type of problem. Eg
JAISALMER cigarette
Types of Problem Recognition :
Immediacy Of Solution
Immediate Immediate
solution required solution not
Expectancy required
Occurrence was Routine problem Planning problem
Of Problem
expected
Occurrence Emergency Evolving problem
unexpected problem

 Routine Problem: Convenience goods, Grocery

purchases
 Emergency problem: ATM, credit cards
 Planning problem: Durable goods
 Evolving problem: Fashion
Situations leading to problem
recognition
• Marketers understand such situations so that
they can remind the customers of such
situations. Eg: Domino’s, Cadbury
1.Depleted or Inadequate stock of goods
2.Discontentment with existing stock of goods
3.Changing financial circumstances
4.Marketing Efforts: try to create a gap
between actual and desired
state
 Marketing helps
consumers recognize (or
create) an imbalance
between present status
and preferred state
Marketing Implications:
• Marketer can segment customers on the basis of
their motives. Eg TVS jive
• Marketer can devise promotional campaign
according to uniqueness of segment. Eg Dabur
• Marketers can provide the consumer with the
opportunity to recognize their need for particular
goods and service. Eg ‘Diamonds are ideal gift’
• Identify situations in which consumers are likely
to make purchases. De Beers- Wedding
collection, cadbury, Kurkure
• Marketers can manage marketing mix elements
well to take advantage of recognized problem
situation. Eg Maruti Suzuki
Information Search:

• Once the need or problem is identified

customer starts seeking information.
• Various sources of information are:
 Own personal experience
 Reading about product in mass media
 A lecture on the product
 Word of mouth
 Shop window display
 Friends and relatives
 Type of Information sought by
potential buyer
1. Evaluation Criteria: features to meet needs, price,
wash capacity, power
consumption, heater facility, drying
facility
2. Appropriate alternatives : various brands available
to satisfy the criteria
3. Alternative characteristics: gather information on
each brand on each pertinent
evaluative criteria.
 Information collection & processing
SET NAME EXPLANATION INFORMATION
IMPLICATION
• Awareness Set Consist of all the brands Customer collects
that the customers knows preliminary information on
of these brands and
scrutinizes them in a
cursory fashion
• Inept Set Customer definitely finds Consumer is not
it unworthy of interested in any
consideration information on the
brand(s) in this set
• Evoked Set Based on preliminary customer is interested in
investigation customer gathering as much
finds them worthy of information as is needed
further attention for decision making on
these brands
• Inert Set Consumer is indifferent These brands are
towards these choices acceptable if none of the
brands from the evoked
set can be bought. Thus,
while consumer is not
actively seeking
information on these
brands, he passively
The information search

An internal search involves the scanning

of one's memory to recall previous Personal sources
experiences or knowledge concerning (friends and family)
solutions to the problem-- often sufficient
for frequently purchased products.
Public sources (rating
An external search may be necessary services like
Consumer Reports)
when past experience or knowledge is
insufficient, the risk of making a wrong
purchase decision is high, and/or the cost Marketer-dominated
of gathering information is low. sources (advertising
or sales people)
 External Search:
• Information in memory is missing, inadequate, or is
suspect, then an external search is required.
• Amount of external search activity depends upon:
a. Perceived value vs perceived cost:
 Financial cost
 Time cost
 Physical cost
 Psychological cost
b. Individual factors:
 Experience with a product
 Open mindedness and self confidence of consumer
 Educational level income status
 Degree of involvement
c. Situational Factors:
 Urgency of need and availability of time
 Special opportunities arise to purchase at an
attractive prices.
d. Risk Factor:
 Functional/ Performance risk
 Financial risk
 Psychological risk
 Social risk
 Physiological risk
e. Types of product sought:

 Shopping goods
 Convenience goods
Marketing Implications :

• Marketer can make the task easy for

customer like finding the information,
understanding it and using it.
• Marketer can minimize both risks and
costs to the consumer in making product
selection.
Evaluation of Alternatives
• Evaluation criteria are the various features
that a customer looks for in a response to a
particular type of problem.
• Tangible criteria: price, color, size, shape etc
• Intangible criteria: brand image, feeling
associated with ownership
• Evaluation criteria differ in number, type
and importance.
• It varies with customer, product, situation.
Eg purchasing a pair of jeans
• Number of evaluation criteria depends on
importance of purchase
 Non compensatory decision rules
• The weakness of a possible
alternative not offset by its strength.
• All the criteria should be satisfactory
for purchase.
 Compensatory decision rules
• Trade off while comparing
alternatives
• Weighted rating is used.
1. Non Compensatory Decision Rules :-
a) Disjunctive Rule:
• Deciding first the most imp criteria for
evaluation
• Establishing a minimum score for it
• Brand should meet this minimum score in
it.
• That brand will be selected which
exceeds other by greater amount.
CRITERION DELL HP COMPAQ
PRICE
Minimum 12000 17000 13000
Acceptable
score
=15000
b) Conjunctive Rule :-
• Consumer has to establish minimum levels
of acceptability on each brand attribute of
importance.
Evaluative BRAND X Y Z A Acceptabl
criteria e level
Price $9 $7 $13 $7.50 Less than
$12
Ease of use Very good Very good Fair Very good Good

Readability Very good Fair Very Good Very Good Good

of display

Warranty 90 days 1 year 6 months 1 year 6 months

Battery life Good fair Very good Very good Good

Features fair Good Very good good good

c) Lexicography Rule :-
• This is extension of disjunctive rule
• It allows additional evaluative criteria to be
incorporated in decision.
• Evaluative criteria are added in hierarchical
order

d)Sequential Elimination Rule:-

• Consumer establishes acceptable performance
for each evaluative criteria.
• Then each brand is evaluated and evaluation of
brand not performing up to minimum criteria
• No specific ordering of attributes.
Compensatory Decision Rule :-
a)Simple Additive Rule
b)Weighted Additive Rule
Marketing Implications

• Evaluation is comparative: ensure own

brands are rated superior

• Educate the customers on criteria that

should be used for evaluation.
Purchase Behavior
 Post purchase evaluation

• Experiences are judged against

expectations
1.Neutral feelings
2.Satisfaction : Positive disconfirmation of
expectations
3.Dissatisfaction : negative disconfirmation
of expectations
•think of an important purchasing decision
you have made
•what are some of the thoughts you have
had following your purchase? Any regrets?
•what has influenced those thoughts?
•how have you dealt with the discomfort?
•how has the company anticipated or dealt
with your discomfort?
 Postpurchase Behavior

?
Cognitive
Dissonance
Can minimize through:
Effective Communication
Did I make a good decision? Follow-up
Guarantees
Did I buy the right product? Warranties
Underpromise &
Did I get a good value?
overdeliver
 Cognitive Dissonance
•psychological discomfort caused
by inconsistencies among a
person’s beliefs, attitudes, and
actions
•varies in intensity based on
importance of issue and degree
of inconsistency
•induces a “drive state” to avoid
or reduce dissonance by
changing beliefs, attitudes, or
behaviors and thereby restore
consistency
 Strategies to reduce
dissonance
• Rationalize the decision to be wise
• Look for advertisements to support their
choice
• Persuade others to buy the same brand
• Meeting satisfied owners for reassurance
THANK YOU