CONSUMER DECISION MAKING PROCESS

Prepared By- Mathew Lawrence

KEY LEARNING'S:-

Why study Consumer Decision Making What is consumer mind (Black Box) Concepts - consumer decision, purchase

involvement and product involvemt Types of consumer decisions Roles of Consumer in C.D.M Consumer Decision Making process Need Recognition process Information search process Evaluation process Purchase Post-purchase

Factors influencing C.D.M

WHY STUDY C.D.M PROCESS

Opening Case on Aarey Milk Diary.

So firms that choose not to understand their consumers purchasing behaviour often lose out of the market.

An excellent engineered product may fail just because the customer does not identify himself or herself with it. (share examples)

The firm must understand the buyers purchasing behaviour. Specially how the buyer decides, what motivates him and who influences him.

The marketer needs to focus on “how and “why” of the total experience consumers have with products and service. (share examples)

WHAT IS CONSUMER MIND (BLACK BOX)

Buyers continues to be an Enigma- sometimes responding the why the marketer wants and on other hand occasions just refusing to buy the product from the same marketer.- Black Box

The marketers provide stimuli but he is uncertain of the buyers response. This stimuli is a combination of product price etc.

StimulusCompany controlled

ProductPrice

AdvertisingSales Promotion

DisplayDistribution

Social Word of mouthReference Group

Response

Buy

No Buy

Consumer mind(Black Box)

CONSUMER DECISION , PURCHASE INVOLVEMENT & PRODUCT INVOLVEMENT

A decision is a set of an options from two or more alternatives choices.

So consumer decision produces an image of an individual carefully evaluating the alternatives of a set of products, brand or services and rationally selecting the one that solves a clearly recognized need for the least cost.

Purchase involvement is the level of concern for, or interest in the purchase process triggered by the need to consider a particular purchase.

Product involvement is the level of concern for a particular brand or a product category.

Examples: Juice (purchase involvement ) Slice,

Mirinda, Thums up etc. (product involvement)

TYPES OF CONSUMER DECISIONS

Problem recognition

Nominal decision making

Information searchLimited internal

Purchase

Limited decision making

Extended decision makingProblem

recognition

Information search Internal

Limited external

Alternative evaluation

Few attributesSimple decision

makingFew alternatives

Problem recognition

Information search InternalExternal

Alternative evaluation Many attributes

Complex decision making

Many alternatives

ROLES OF CONSUMER IN C.D.M

Initiator

Influencer

Decider

Buyer

User

Consumer decision processes are the decision making processes undertaken by consumers in regard to a potential market transaction before, during, and after the purchase of a product or service.

The focus of this process, forms an integral part of consumer behaviour on how consumers spend their available resources (such as time and money) on personal and household products and services so as to satisfy their needs.

The decision-making processes that consumers use when making purchases vary, particularly with regard to the time and effort that they take to reach a decision.

CONSUMER DECISION MAKING PROCESS

NEED RECOGNITION

Problem recognition is the first stage in C.D.M process. Problem recognition is the result of a discrepancy between

a desired state and a actual state that is sufficient to arouse and activate the decision process.

Eg: Feeling Bored- actual state. Listening music/Call friend –

desired state.

Types of Consumer Problem Consumer problem may be either active problem or inactive

problem. Active problems only require the marketers to convince

consumers that its brand is the superior solution. Inactive problems require the marketer to convince

consumers that they have the problem and the marketers brand is a superior solution to the problem which is more difficult task.

NEED RECOGNITION (CONT)

Marketing Strategy used problem recognition Discover Consumers problem

Activity analysis Product analysis Problem analysis

Responding to Consumer problem Helping Consumer recognize problem Suppressing problem recognition

INFORMATION SEARCH

Once problem is recognized relevant information from long-term memory is used to determine if a satisfactory solution is known, what are the characteristics of potential solution are, what are appropriate ways to compare solutions and so forth- This is called Internal search.

If a resolution is not reached through internal search, then external search is focused.

It is important to note that even in extended decision making with extensive external search, the initial internal search generally produces a set of guides or decision constraints that limit and guide external search.

Examples of External search: web, books, articles newspaper, friends etc.

INFORMATION SEARCH (CONT)

Types of Information

Evaluative Criteria: The desired characteristics are the

consumers evaluative criteria. Ex: Laptop or Computer

Appropriate Alternative: Here the consumer seeks for

different companies or brand Ex: Dell, HP, Asus, Toshiba,

Apple, Fuji.

Evoked Set

Dell

HP

These are the brands which are know very

well

Inert Set

AsusToshibaApple

Inept Set

Fuji

Which are known but

not the performance

Which are not known

Alternative Characteristics: Here the consumer compares

the different features of the selected evoked set

Ex: price, memory, processor etc.

INFORMATION SEARCH (CONT)

EVALUATION OF ALTERNATIVES When potential consumers have all the necessary

internal and external information on alternatives, they have to evaluate the alternatives in order to make a purchase.

Information will lead to an evoked set(familiar brands) of alternative products from which a choice will then have to be made.

Theory of Evoked Set- By Howard and Sheth’s Total Set

(all brands)

Awareness Set

(brands aware off)

Consideration Set(brands

considered)

Decision Set

(brands decided)

Purchase Set

EVALUATION OF ALTERNATIVES Consumers use several attributes when they are

evaluating alternative products and they are more interested in a specific attribute that brings the sought benefits.

Example: Price, Quality, availability, service, performance etc

The number of criteria used in decision making are relatively limited, usually less than six.

Also, not all criteria are equally important. The criteria used to make a decision change

depends on the consumer, the product, and the situation.

PURCHASE Consumers generally make three types of purchase:

trial purchase, repeat purchase and long term commitment purchase.

Trial purchase would be in smaller in quantity and it would be also termed as Exploratory phase.

Repeat purchase is very closely related to brand loyalty, which firms try to encourage because it contributes to greater stability in the market share.

POST-PURCHASE

Marketing can minimize through:Effective Communication

Follow-upGuaranteesWarranties

The purchasing process does not end when a consumer buys a product . After the purchase consumers tend to evaluate their experience to decide if they are satisfied or dissatisfied.

The information will be used in future decision-making. The performance of the product or service will be

compared with consumers expectations. There are three possible outcomes of these evaluations: Perceived performance meeting expectations Perceived performance exceeding expectations Perceived performance being lower than expectations

When a consumer thinks of the unique, positive qualities of the brand not selected, it is known as cognitive dissonance.

When cognitive dissonance occurs

after a purchase, it is called

post purchase dissonance.

Firms Marketing Efforts

1. Product2. Promotion3. Price4. Channel of

distribution

Socio cultural Environment

1. Family2. Informal sources3. Other non commercial

sources 4. Social class5. Sub culture and culture

Need RecognitionInformation

Search Evaluation of Alternatives

PurchasePost-

purchase

Psychological Field 1.Motivation2.Perception3.Learning4. Personality5. Attitude

Purchase1. Trial2. Repeat purchase

External Influence

INPUT

Consumer Decision Making

PROCESS

Experience

OUT PUT

Thank You