CONSUMER DECISION MAKING PROCESS Prepared By- Mathew Lawrence
Jan 13, 2015
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