Consumer decision making


Theoretically, for any decision to happen, there must be
alternatives in place. Consumers can chose whether to buy
or not, where to buy from, which payment method to use,
how much to buy, etc.



In fact, it is common for businesses to give choices to the
customer, since the tendency for a favourable response is
more in such cases.



Three levels of customer decision making in terms of degree
of difficulty: Extensive problem solving, limited problem
solving and routinised reponse behaviour.



 Consumer decision making

How do consumers take their decisions?
1)An economic view: It endorses the viewpoint that
customers are always rational.

The critique is that:
a) To be rational, customers must know every alternative
available
b) They should be able to correctly evaluate every alternative
and identify the best possible one.



In practice, people are limited by the amount of information
they have, their existing values and goals and the extent
of their knowledge. Do they always take the most
rational decision? Even haggling may not turn out to be
absolutely rational…
 Consumer decision making

Passive view: Customers submissively accept and fall prey
to the marketer’s gimmicks… So they are irrational and
impulsive in behaviour… but the fact is that there are
definite instances to the contrary. Moreover, the availability
of options and information has made customers more
aware and harder to fox



Cognitive view: Consumers are thinking problem solvers
who search and then act on information they receive. But
at one point when they feel that they are reasonably
satisfied, they seek no more information and may take
short cuts to the final decision. So they settle between the
first two states and take satisfactory decisions.



 Consumer decision making

Cognitive view proposes that decision making is goal directed.



Emotional view: That we buy products due to deep
emotions involved. That us why even moods play an
important role in decision making process...

Malls tend to create an atmosphere to enhance the mood of
people

People in a positive mood tend to recall more about the
product on display as compared to those in a negative
mood… Now come back to the decision making process…



 Consumer decision making

Input: Two inputs are a given here… Firm’s marketing
activities, to reach, inform and persuade consumers to buy
their products… Sociocultural environment talks about
factors outside the firm’s purview, but are equally
important to the final decision making process…



Process:

1) Recognition of need

2) Prepurchase research is where the consumer may recall
from his psychological field or search for external sources
of information.

 Firm’s marketing Sociocultural environment
efforts Family, informal sources,
other non-commercial
I/P

4Ps
sources, social class, culture
and subculture
External influences

Psychological field
Need recognition Motivation, perception,
Process

learning, personality,
Prepurchase research attitudes

Evaluation of
alternatives Experience

Post decision behaviour

Purchase: Trial & repeat

O/P

Post purchase
purchase
evaluation
 Consumer decision making

3) Evaluation of alternatives: First the customer decides upon
an evoked set of alternatives (brands). Then there is the
inept set that he does not consider worth buying and the
inert set that he thinks do not have any considerable
advantage. For instance, while buying a new pair of shoes:



Evoked set: Nike, Adidas

Inept set: Bata, Westside

Inert set: Puma



 Consumer decision making
Why a brand may miss out:


a) Their communication did not reach and so no awareness

b) Consumers perceive the brand as having poor attributes or
inappropriate positioning
c) The customer feels that the brand is not targetted at his
segment…
d) They feel that the brand cannot meet their perceived
needs.



 Consumer decision making

Customer decision rules: Two categories of decision
making exist:


1)Compensatory decision making: A consumer may take a

decision based on comparing attribute after attribute
of the brands and the benefits to him. In this type of
decision making, positive attributes in choice A can
offset the negative attributes.


Finally, the customer does a scoring.



1)
 Consumer decision making

Non-compensatory decision: In non-compensatory
decision making, one negative attribute may be so strong
that it automatically removes the product from active
consideration, which means that no positive attribute can
make up for it.



Three types of non-compensatory decision making:

a) Conjunctive decision: Where the customer adopts a
minimum benchmark for each attribute, and if any brand
falls below that, it is rejected.
 Consumer decision making

Disjunctive rule is where the customer defines a cut off
above which all brands are accepted. This cut off is often
higher than the conjunctive cut off.



Lexicographic decision rule: Attributes are ranked in the
order of their perceived importance and then customer
decides on the brand that scores the maximum in the most
important attribute. If there are two fitting the bill, then he
goes to the next important attribute to decide. Obviously
what is most important varies as the customer may be
driven by status/economy/quality/et al.



 Consumer decision making

Other kinds of decision strategies may be followed:

a) Practical loyalists: Will look for best bargains on their
favourite brands.

b) Bottom line price shoppers: Look for lowest price rather
than brand

c) Opportunistic switchers: Will see their evoked set and
decide on basis of promotions.

d) Deal Hunters: Looking for bargains



Internet is an important tool for decision making today.
 Consumer decision making

When customers have incomplete information or are unable
to compare alternatives, they may:
a) Delay decision till they get full information
b) Ignore missing information and take a decision based on
what’s available
c) Change the decision strategy to one that can ‘render’ the
missing information redundant
d) Infer the missing information

So for marketers, it can be an important exercise to think
what information to provide and what not to provide.

 Consumer decision making

Consumption vision is something which customers may often
use before taking a decision



Output:



Post Purchase behaviour: Customers may do trial
purchase, repeat purchase or long term commitment
purchases.



Post purchase evaluation of course is related to delight,
satisfaction and disappointment. Dissonance is an
important part of post-purchase behaviour.
 Consumer decision making


As a marketing consultant for company X, which plans to
launch a restaurant in your city for the middle/upper
middle class, evaluate various aspects of consumer
behaviour with respect to eating out and give
recommendations to the company.