CONSUMER DECISION

MAKING
 What is Decision ?
 A decision is a choice between two or more
alternative actions or behaviors.
 Example : A housewife goes to purchase a mid
priced range of tea, than making a selection from
the various brands of tea like Taj Mahal, Tata Tea,
Red label, Yellow label, etc. than she is making
decision.
Consumer decisions are decisions consumers make in the

marketplace : involving

 whether to purchase

 what to purchase
 when to purchase
 From whom to purchase
 how to pay for the purchase
 Outlines

 Levels of Consumer Decision Making

 Models of Consumer Decision
Making
 Consumer Gifting Behavior
 Relationship Marketing
 Levels of Consumer Decision
Making
 Extensive Problem Solving
 A lot of information needed
 Must establish a 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
This Site Helps You Search and Establish Criteria for
Choosing a Doctor

web link
Ads often appeal to
consumers who are
looking for
information to help
them evaluate
products.
 Models of Consumers: Four Views of
Consumer Decision Making
 An Economic View how much satisfied, better money/price for the
purchases.

 A Passive View consumer are perceived as impulsive purchasers, ready

to yield to the aims and into the arms of marketers.

 A Cognitive View focused on the processes by which consumers seek

and evaluate information about selected brands and retail outlets.

 An Emotional View associate deep feeling or emotion such as joy,

love fear, hope, love, sexuality, fantasy and even a little magic.
Goal Setting and Pursuit
A Simple Model of Consumer Decision Making
 The Process of Consumer Decision
Making

 Need Recognition

 Prepurchase Search

 Evaluation of Alternatives
 Need Recognition
 Usually occurs when consumer has a “problem”

 Need recognition styles

 Actual state
 Desired state
 Prepurchase Search
 Begins with internal search and then moves to
external search
 The impact of the Internet

 Search may be personal or impersonal

 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
 Series of decisions
 Decision rules and marketing strategy
The Evoked Set
 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
 Series of decisions
 Decision rules and marketing strategy
 Consumer Decision Rules
 Compensatory

 Noncompensatory
 Conjunctive Decision Rule
 Disjunctive Decision Rule
 Lexicographic Rule
 A type of decision
rule in which a
consumer evaluates
each brand in terms
Compensatory
of each relevant
Decision Rules
attribute and then
selects the brand
with the highest
weighted score.
 A type of consumer
decision rule by
which positive
Non-
evaluation of a brand
compensatory
attribute does not
Decision
Rules compensate for a
negative evaluation of
the same brand on
some other attribute.
 A noncompensatory
decision rule in which
consumers establish a
minimally acceptable
Conjunctive cutoff point for each
Decision attribute evaluated.
Rule Brands that fall below
the cutoff point on any
one attribute are
eliminated from further
consideration.
 A noncompensatory
decision rule in which
consumers establish a
Disjunctive
minimally acceptable
Rule
cutoff point for each
relevant product
attribute.
 A noncompensatory
decision rule -
consumers first rank
product attributes in
Lexicographic
terms of importance,
Rule
then compare brands
in terms of the
attribute considered
most important.
 A simplified decision
rule by which consumers
make a product choice
Affect
on the basis of their
Referral
previously established
Decision
overall ratings of the
Rule
brands considered, rather
than on specific
attributes.
 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
 Series of decisions
 Decision rules and marketing strategy
The Decision Process for Functionally Illiterate
Consumers
 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
 Series of decisions
 Decision rules and marketing strategy
There Are a Growing Number of Web Sites to
Help Consumers Choose Products

web link
 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
 Series of decisions
 Decision rules and marketing strategy
Coping with Missing Information

 Delay decision until missing information is obtained

 may Ignore missing information and use available

information
 may Change the decision strategy to one that better
accommodates for the missing information
 Infer (construct) the missing information
 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

 Series of decisions

 Decision rules and marketing strategy

A Purchase Can Involve a Number of
Decisions.

When purchasing car, the buyer is

involved in a number of decisions – the

make, model, country of origin, the

dealer, the financing, and different

options.
 Output of Consumer Decision
Making

 Purchase behavior

 Post purchase evaluation

 Purchase Behavior
 Three types of behavior
 Trial purchases
 Repeat purchases
 Long-term commitment
 Post purchase Evaluation
 Actual Performance Matches Expectations
 Neutral Feeling

 Actual Performance Exceeds Expectations

 Positive Disconfirmation of Expectations

 Performance Is Below Expectations

 Negative Disconfirmation of Expectations
This article in Cargo
is designed to help
a reader reduce
their post purchase
depression.
 Gifting Behavior
Gifting is an act of symbolic communication, with
explicit and implicit meanings ranging from
congratulations and love, to regret, obligation, and
dominance.
An Increasing Number of Gift Purchases Are Now
Made Online

web link
Reported Circumstances and Motivations
for Self-Gift Behavior

CIRCUMSTANCES MOTIVATIONS

Personal accomplishment To reward oneself

Feeling down To be nice to oneself
Holiday To cheer up oneself
Feeling stressed To fulfill a need
Have some extra money To celebrate
Need To relieve stress
Had not bought for self in a while To maintain a good feeling
Attainment of a desired goal To provide an incentive toward a goal
Others Others
 Gifting Relationships
GIFTING
RELATIONSHIP DEFINITION EXAMPLE
Intergroup A group giving a gift to A Christmas gift from one
another group family to another family
Intercategory An individual giving a gift to a A group of friends chips in
group or a group giving a gift to buy a new mother a baby
to an individual gift
Intragroup A group giving a gift to itself A family buys a VCR for
or its members itself as a Christmas gift
Interpersonal An individual giving a gift to Valentine’s Day chocolates
another individual presented from a boyfriend
to a girlfriend
Intrapersonal Self-gift A woman buys herself
jewelry to cheer herself up
A Simple Model of Consumption
 Marketing aimed at
creating strong,
lasting relationships
with a core group of
customers by making
Relationship
them feel good about
Marketing
the company and by
giving them some
kind of personal
connection with the
business.
 Proctor & Gamble Builds
Relationships with Their Brands
 State Farm
Insurance stresses
relationship
marketing in their
advertising.