Consumer Decision-Making Process2

A five-step process used

by consumers when buying goods
or services.

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 Consumer Decision-Making Process2

Need
Need Recognition
Recognition

Information
Information Search
Search
Cultural,
Cultural, Social,
Social,
Individual
Individual and
and
Psychological Evaluation
Evaluation
Psychological
Factors of
ofAlternatives
Alternatives
Factors
affect
affect
all
all steps
steps Purchase
Purchase

Postpurchase
Postpurchase
Behavior
Behavior
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Consumer Decision Making Process
Example: Sukanya is a junior executive in her twenties working in a prominent
sportswear company. She has decided to purchase a new mobile phone. Let’s look
at a potential decision making process for her.

• Sukanya feels her mobile phone is outdated

Problem to match her needs and wants to buy a new
Recognition one

Information • Sukanya talks to some of her friends about buying a new

phone and types of phones
Research
Information • Sukanya goes online and compares several models in terms of
price, features and user ratings
Evaluation
• Sukanya makes her choice based on features that she was
Decision looking for

Post Purchase • Sukanya makes the purchase and enjoys her new mobile phone
Evaluation
 2
Need Recognition

Result of an imbalance between

actual and
desired states.

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 2
Need Recognition

Marketing helps
consumers recognize an Internal Stimuli
imbalance between and
present status and
External Stimuli
preferred state

Preferred State

Present Status

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 2
Stimulus
Any unit of input affecting one or
more of the five senses:
sight
smell
taste
touch
hearing

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 2
Want

Recognition of an
unfulfilled need and
a product
(or attribute or feature)
that will satisfy it.

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 2
Recognition of Unfulfilled Wants
 When a current product isn’t performing
properly

 When the consumer is running

out of an product

 When another product seems superior to the

one currently used

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 2
Information Searches

Process of recalling past

Internal
information stored
in the memory.

Process of seeking information in

External
the
outside environment.

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 2
Information Search
Internal Information Search

 Recall information in memory

External Information search

 Seek information in outside environment

 Non-marketing controlled
 Marketing controlled

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 2
External Information Searches
Need Less Need More
Information Information

Less Risk More Risk

More knowledge Less knowledge
More product experience Less product experience
Low level of interest High level of interest

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 2
Evoked Set

Group of brands,
resulting from an information
search,
from which a buyer
can choose.

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 2
Evaluation of Alternatives
Evoked Set
Evaluation of Products

Analyze product attributes

Use cutoff criteria

Rank attributes by importance

Purchase!
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 2
Purchase

To buy
or not to buy... Determines which attributes
are most important
in influencing a
consumer’s choice

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Learning Objective 3

Explain the consumer’s

postpurchase evaluation process.

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 3
Cognitive Dissonance

Inner tension that a consumer

experiences
after recognizing an inconsistency
between behavior and values
or opinions.

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Postpurchase Behavior 3

Cognitive Dissonance

?
Did I make a good decision?

Did I buy the right product?

Did I get a good value?

Can minimize through:
Effective Communication
Follow-up
Guarantees
Warranties

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Learning Objective 4

Identify the types of

consumer buying decisions
and discuss the significance
of consumer involvement.

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 Types of Consumer Buying Decisions 4

Routine
Routine Limited
Limited Extensive
Extensive
Response
Response Decision
Decision Decision
Decision
Behavior
Behavior Making
Making Making
Making

Less More
Involvement Involvement

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Five Factors influencing Decisions4

1. Level of consumer involvement

2. Length of time to make decision
3. Cost of good or service
4. Degree of information search
5. Number of alternatives considered

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 Routine Response Behavior 4

 Little involvement in selection process

 Frequently purchased low cost goods
 May stick with one brand
 Buy first/evaluate later
 Quick decision

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 Limited Decision Making 4

 Low levels of involvement

 Low to moderate cost goods

 Evaluation of a few alternative brands

 Short to moderate time to decide

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 Extensive Decision Making 4

 High levels of involvement

 High cost goods

 Evaluation of many brands

 Long time to decide

 May experience cognitive dissonance

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 Alternative forms of decision making

The three main alternative forms of decision making methods of a consumer are:

• Habitual/routine decision making

• Limited decision making
• Extended decision making

Habitual Decision Limited Decision Extended

Making Making Decision Making

Low involvement High involvement

In the purchase In the purchase

The factors that differentiates these methods are level information search, degree
of prior experience, amount of perceived risk, time pressure and frequency of
purchase.
 Alternative forms of decision making

Habitual/routine decision making

Examples of routine purchases are the daily newspaper, weekly groceries, regular
coffee order:
 Decision is make quickly
 Level of involvement in the selection process is minimum
 Product is evaluated after the purchase
 Low cost goods
 High frequency of buying
 Consumer is likely to stay with one brand.
 Alternative forms of decision making

Limited Decision making

Clothes, gifts, home furnishings, and vacations are examples of items where
consumers would typically use limited decision making:

 Involvement level is comparatively low

 Prices of products range between low to moderate

 Few brands are evaluated before the purchase decision is made

 Moderate amount of time is spent to make a decision

 Alternative forms of decision making

Extended Decision Making

 Purchasing a house, selecting a college, a first car, or a location for a wedding are
examples of extended decision making:

 High degree of involvement

 Product Prices are high

 Many brands are evaluated before the purchase decision

 Considerable amount of time is spent to make a decision

 Heuristics

 Day to day life is filled with decisions ,whether it is your breakfast cereal or what
radio station to listen to. In decision making consumers seek the assistance of
heuristics.

 Researches have identified that in low involvement decision making consumers

rely on heuristics. i.e. rules of thumb or mental short cuts.

 For example, Bob has decided to buy a shirt at his usual store named X .This
decision is driven by his belief that this store thinks it has the best range and its
brand gives him confidence. Therefore Bob is ignoring any information search
about competitors or substitute products. His assumption about X acted as a
shortcut that removed a few steps from the decision making process.
Marketing Implications of Involvement 4

High-involvement Low-involvement
High-involvement Low-involvement
purchases require: purchases require:
purchases require: purchases require: in-
extensive promotion to store promotion and
extensive
target promotion
market and to in-store promotion
eye-catching and
package
target market & eye-catching
design package
good advertisement design
good advertisement

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