Levels of Consumer Decision Making

• Extensive Problem Solving

– lot of information
- set of criteria for evaluation
• Limited Problem Solving
– Criteria for evaluation established
– Fine tuning with additional information
• Routinized Response Behavior
– Usually review what they already know
Models of Consumers: Four Views of Consumer
Decision Making

• An Economic View
• A Passive View
• A Cognitive View
• An Emotional View
 An Economic View

• perfect competition, rational consumer

• aware of all choices, rank their benefits, and
can choose the best alternative

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 A Passive View

• Submissive consumer to the self-serving

interests and promotional efforts of marketers
• impulsive and irrational purchasers

4
 A Cognitive View

• consumer as problem solver.

• cognitive model focuses on the processes by which
consumers seek and evaluate information about
selected brands and retail outlets.
• as information processors, leads to formulation of
preferences, and ultimately, purchase intentions.

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 An Emotional View

• Emotions are at the center

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 Consumer
Decision Making
Model
 Process - Need Recognition

• Need recognition
– Actual state: need arises when a product fails to
perform satisfactorily
– Desired state: The desire for something new can
create the need
 Prepurchase Search

• Internal, external search

• Mind,Internet,retail
– Product factor
– Situational factors
– Consumer factors

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 Search Regret

• Post search dissonance that result from an

unsuccessful pre purchase search

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 Evaluation of Alternatives
• Evoked set
• Criteria used for evaluating brands
• Consumer decision rules
• Decisions by functionally illiterate population
• Going online for decision-making assistance
• Lifestyles as a consumer decision strategy
• Incomplete information
• Applying decision rules
• Series of decisions
• Decision rules and marketing strategy
 Evoked Set

• Evoked Set -brands the consumer considers in

making a purchase in a particular product
category

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The Evoked Set
 Inept Set

• Inept Set - brands the consumer excludes from

consideration as unacceptable.

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 Inert Set

• Inert Set - brands to which the consumer is

indifferent because they are perceived as
having no advantage

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 Issues in Alternative Evaluation
• Evoked Set
• Criteria used for evaluating brands
• Consumer decision rules and their application
• Decisions by functionally illiterate population
• Going online for decision-making assistance
• Lifestyles as a consumer decision strategy
• Incomplete information
• Applying Decision Rules
• Series of decisions
• Decision rules and marketing strategy
 Consumer Decision Rules

• decision strategies, and information-

processing strategies, and are procedures
used by consumers to facilitate brand choices.

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 Consumer Decision Rules

• Compensatory Decision Rules

– evaluates each brand in terms of each relevant attribute
and then selects the brand with the highest weighted
score.
• Noncompensatory Decision Rules
– positive evaluation of a brand attribute does not
compensate for a negative evaluation of the same
brand on some other attribute, every attribute must
reach a minimum level or it will be disqualified.
– Conjunctive, disjunctive, or lexicographic
 Conjunctive

• establish a minimally acceptable cutoff point

for each attribute .Brands that fall below the
cutoff point on any one attribute are eliminated

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 Disjunctive

• if a brand meets or exceeds the cutoff

established for any one attribute, however, it is
accepted.

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 Lexicographic

• ranks the attributes in terms of perceived relevance

• compares 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.

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 Hypothetical Use of Decision Rules

Decision Rule Mental Statement

Compensatory rule I selected the netbook that came out best when I
balanced the good ratings against the bad ratings

Conjunctive rule I selected the netbook that had no bad features

Disjunctive rule I picked the netbook that excelled in at least one

attribute
Lexicographic rule I looked at the feature that was most important to
me and chose the netbook that ranked highest on
that attribute
 Specific Consumer Segment

• Practical Loyalists- look for ways to save on the

brands and products 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 product that fall within
their evoked set
• Deal Hunters- look for the best bargain and are not
brand loyal

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 Coping with Missing/Incomplete
Information
• Delay decision until missing information is
obtained
• Ignore missing information and use available
information
Output of Consumer Decision Making
• Purchase behavior
– Trial purchases- first time a consumer buys a product when
there is potential for repeat purchases
– Repeat purchases- see if they really like it
– Long-term commitment- rarely purchased and kept for a long
time , car
• Postpurchase evaluation
 Postpurchase Evaluation

• Actual Performance Matches Expectations

– Neutral Feeling
• Actual Performance Exceeds Expectations
– Positive Disconfirmation of Expectations
• Performance Is Below Expectations
– Negative Disconfirmation of Expectations
Analytical Models: Nicosia Model
Howard-Sheth Model
 Howard-Sheth Model

• Stimulus inputs (Input variables): stimuli in

the environment; informative cues about the
product/service offering-quality, price,
distinctiveness, service and availability.
 Howard-Sheth Model

• Perceptual constructs: how a consumer

obtains and processes information received
from the input variables
• Overt Search: The observable and measurable
responses of consumers
• Perceptual Bias: Distortion of the information
 Howard-Sheth Model

• Learning constructs: buyer learning, formation of attitudes and

opinions, and the final decision
• Motives: Impelling action that guides consumers to fulfil their needs
• Evoked set: Assessment of consumption choices available
• Predispositions: Preference towards certain brands
• Decision Mediators : Mental rules of the consumer for assessing
purchase alternatives
• Inhibitors: Limiting factors such as availability of money or time that
restrict the choices
• Satisfaction: Post purchase assessment that guides future purchase
decisions
 Howard-Sheth Model

• Response outputs (output variables): buyer’s

action or response to stimulus inputs
 Howard-Sheth Model

• Attention: Whether the consumer is interested in the stimuli

• Comprehension: If the interest has led to understanding of
the information
• Attitude: Favorable or unfavorable evaluation of the product
• Intention: buyer’s intention to buy or not to buy
• Purchase behavior: actual act of buying.
Engel-Blackwell-Miniard Model
 Cog model-Theory of Reasoned
Action (Fishbein & Ajzen):
• A person’s behaviour is determined by the
intention to perform it.

• Behavioural Intention = Attitude + Subjective

Norms

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 Beliefs and
Attitude
Evaluations of
Toward
Behavioral
The Behavior
Outcomes

Behavioral
Behavior
Intention

Normative Subjective
Beliefs Norms
 Theory of Planned Behaviour

The actual behaviour is a result of behavioural intentions, but is

controlled to some extent by perceived behavioural control
(Person’s Skills, Resources and other conditions that are
required to purchase)
Theory of Planned Behavior
 Uses for TRA/TPB

• TRA-behaviors that are under the person’s

control
• TPB works best when the behavior is NOT
perceived to be under the person’s control.
 Gifting Behavior

act of symbolic
communication, with
explicit and implicit
meanings ranging from
congratulations and love,
to regret, obligation, and
dominance.
 Gifting Relationships
GIFTING DEFINITION EXAMPLE
RELATIONSHIP

Intergroup A group giving a gift to A Christmas gift from one family to

another group
Intercategory An individual giving a gift
to a group or a group
giving a gift to an
individual
Intragroup A group giving a gift to
itself or its members
Interpersonal An individual giving a gift
to another individual
another family
A group of friends chips in to buy a new
mother a baby gift
A family buys a VCR for itself as a
Christmas gift
Valentine’s Day chocolates presented
from a boyfriend to a girlfriend

Intrapersonal Self-gift A woman buys herself jewelry to cheer

herself up
 Marketing aimed at
creating strong,
lasting relationships
with a core group of
Relationship customers by making
Marketing them feel good about
the company and by
giving them some kind
of personal connection
with the business.
A Model of Customer Loyalty

Act Of Purchase
Customer Satisfaction
Customer Trust
Customer Commitment
Customer Loyalty
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 Major Factors Reducing Loyalty

• Abundance of choices
• Availability of Information
• Entitlement ( Consumers ask “what have you
done for me lately?”)
• Insecurity (Consumer financial problems)
• Time Scarcity

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