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.

Stimulus
Company controlled Buy
Product
Price
Advertising
Sales Promotion
Display
Response
Distribution

Consumer mind(Black Box) No Buy

Social
Word of mouth
Reference Group
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
Nominal decision Limited decision Extended
making making decision making

Problem recognition Problem recognition

Problem recognition

Information search Information search

Internal Internal
Limited external External

Alternative evaluation Alternative evaluation

Information search Few attributes Many attributes
Limited internal Simple decision making Complex decision making
Few alternatives Many alternatives

Purchase
ROLES OF CONSUMER IN C.D.M

Initiator
Influencer

Decider

Buyer

User
CONSUMER DECISION MAKING PROCESS

 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.
 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 Inert Set Inept Set
Asus
Dell Fuji
Toshiba
HP Apple

These are the Which are Which are not

brands which known but not known
are know very the
well performance
INFORMATION SEARCH (CONT)

Alternative Characteristics: Here the consumer compares

the different features of the selected evoked set
Ex: price, memory, processor etc.
 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 Awareness Consideration

Decision Set
(all brands) Set Set
(brands
(brands (brands
decided)
aware off) considered)

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
 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
Marketing can minimize through:
after a purchase, it is called Effective Communication
Follow-up
post purchase dissonance. Guarantees
Warranties
 External Influence
Socio cultural Environment
Firms Marketing Efforts 1. Family I
1. Product 2. Informal sources N
2. Promotion 3. Other non commercial P
3. Price sources U
4. Channel of distribution 4. Social class T
5. Sub culture and culture

Consumer Decision Making

Need Psychological Field P

Recognition 1.Motivation R
Information 2.Perception O
Search 3.Learning C
Evaluation of 4. Personality E
Alternatives 5. Attitude S
Purchase S
Post-purchase
Experience

Purchase
1. Trial
2. Repeat purchase OUT PUT
Thank You