Consumer Involvement and Decision Making

Family Decision Making

26th August 2008

Definition of Family

• Two or more person living together

• They should be related– Either through marriage– Or through blood relation– Or through adoption

Role and function of family

• To look after the economic well being of the family members

• To provide emotional support to each other

• To establish suitable life style to the family

• To ensure proper socialization of members

Types of families

• Married couple with children – 37%

• Married couple with children above the age of 18 years – 23%

• Single parents living with children – 2%

• Couples not married living together – 3%

• Joint families – 35%

Consumer Socialisation

• The process by which a person acquire the skills knowledge and attitude necessary to function as consumers

Factors Influencing the decision making

• Parents influence children in Brand preferences• Price – quality relationship is taught to the

children by parents• Affluent children have their own perception on the

Price – quality relationship• Friends / TV Advertisement / Mass Media

influences individuals• Parents also teach how to be an economical and

effective shopper.

Concepts

• Observations

• Co-shopping

• Direct –experience

• Cultivation theory

• Socialisation by rewards and gifts

Stages of Consumer Socialisation

• Preoperational Stage Children and Ice-creams

• Concrete operational stage Children - Logic

• Formal operational stage Children – earning

Consumption roles

• Gate keepers

• Decision makers

• Buyers

Transformation of product for usage

• Users

• Maintenance

• Disposers

• Initiators

• Information collection

• Dynamics of decision making

What is a group

• A group may be defined as two or more people who interact to accomplish either individual or mutual goal.

• Membership Group

• Symbolic Group

Reference Group

• A reference group serves as a point of comparison– Normative reference groups – child’s own

family– Comparative reference groups – friendly

neighbour hood / neighbour is an envy– Indirect reference groups – Movie star

Factors affecting reference group influence

• Information and Experience

• Credibility Attractiveness and the power of the reference groups

• Conspicuousness of the product

Consumer related reference groups

• Friendship Groups

• Shopping Groups

• Work Groups

• Virtual Groups or communities

• Consumer action groups

Young Person

Family Members Friends

Influence more basic Value / Behavior

Moral Religious principleInterpersonal skillDress / GroomingManners / Speech

Educational motivationOccupational / career optionsConsumer Behavior norms

Influence more expressiveAttitudes / Behavior

StyleFashion

Fads In / Out

Acceptable consumer behavior

PreadolescentAdolescent

Teenager Older

Consumer Involvement in Decision Making

• Involvement is dependent on – Nature of the product– Psychology of the consumer

• Degree on Involvement– High Involvement – Long Product / Service life– Medium involvement – Medium– Low Involvement – Short shelf products

Antecedents to involvement

• Ego involvement

• Commitment

• Communication involvement

• Purchase importance

• Extent of information secured

Decision making

• It is the process by which a buyer decides to purchase a particular product out of various alternatives– Awareness

– Interest

– Evaluate

– Trial

– Accept / Reject

– Adopt

Process of Decision making

• Performance of the product

• Physical risk with the product

• Financial Risk

• Reliability Risk

• Social Risk

• Ego & Psychological Risk

• Durability Risk

Process to develop strategies to reduce risk

• Information search

• Brand Loyalty

• Purchase of Reputed Brand

• Buying from reputed stores

• Buying expensive products

• Assurance from suppliers

Marketing InputsProduct

PromotionPricePlace

Channels of Marketing

Need Recognition

Pre-purchase search

Evaluation of alternatives

Social Cultural InputsFamily /Social ClassCulture / Subculture

Economic classRegion / ReligionInformal Sources

Non commercial sources

INPUT

PROCESS

OUTPUT

PURCHASE

Model of Consumer Decision making