Consumer Decision Making and Beyond

21st October, 2011

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Levels of Consumer Decision Making

Extensive Problem Solving
No established criteria for evaluation

Limited Problem Solving

Establish criteria but no preferences

Routine Response Behavior

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Extensive Problem Solving

A search by the consumer to establish the necessary product criteria to evaluate knowledgeably the most suitable product to fulfill a need.

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Limited Problem Solving

A limited search by a consumer for a product that will satisfy his or her basic criteria from among a selected group of brands.

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Routinized Response Behavior

Existing experience with the category as well as a set of brands / brand

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Models of Consumers: Four Views of Consumer Decision Making

An Economic View A Passive View A Cognitive View An Emotional View

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The Economic view

Rational Customers Have To
Be aware of all available product alternatives Be capable of correctly ranking each alternative in terms of its benefits and disadvantages Be able to identify the one best alternative

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Why is the Classical Economic Model Considered Unrealistic?

People are limited by their existing skills, habits, and reflexes People are limited by their existing values and goals People are limited by their existing knowledge

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A Passive View
Depicts consumer as basically submissive to the self-serving interests and promotional efforts of marketers Consumers perceived as impulsive and irrational purchasers, ready to yield to the aims and into the arms of the marketers Limitation Fails to recognise that the consumer plays an equal if not dominant role in many buying situations

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A Cognitive View
Consumer is a thinking problem solver Viewed as information processors They are either receptive or are actively searching for products and services that fulfill their needs Consumer is unlikely to even attempt to obtain all available information about every choice Short-cut decision rules to facilitate decision making

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An Emotional View
Consumer associates deep feelings or emotions with certain purchases or possessions Purchases on impulse Less emphasis made for pre purchase information More emphasis on current mood and feelings

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A Model of Consumer Decision Making

INPUT

PROCESS

OUTPUT
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Figure 16.2 A Simple Model of Consumer Decision Making

External Influences Input Firms Marketing Efforts 1. Product 2. Promotion 3. Price 4. Channels of distribution Consumer Decision Making Need Recognition Process Prepurchase Search Evaluation of Alternatives Psychological Field 1. Motivation 2. Perception 3. Learning 4. Personality 5. Attitudes Experience Postdecision Behavior Output
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Sociocultural Environment 1. Family 2. Informal sources 3. Other noncommercial sources 4. Social class 5. Subculture and culture

Purchase 1. Trial 2. Repeat purchase

Postpurchase Evaluation

Three Stages of Consumer Decision Making Process

Need Recognition Prepurchase Search Evaluation of Alternatives

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Need Recognition

The realization by the consumer that there is a difference between what is and what should be. Actual State vs Desired State

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Prepurchase Search

A stage in the consumer decision-making process in which the consumer perceives a need and actively seeks out information concerning products that will help satisfy that need.

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A stage in the consumer decision-making process in which the consumer appraises the benefits to be derived from each of the product alternatives being considered.

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Factors that are Likely to Increase Prepurchase Search

Product Factors Long interpurchase time (a long-lasting or infrequently used product) Frequent changes in product styling Volume purchasing Frequent price changes High price Many alternative brands Much variation in features
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Continued
Demographic Characteristics of Consumer Well-educated High-income White-collar occupation Under 35 years of age Personality Low dogmatic Low-risk perceiver (broad categorizer) Other personal factors, such as high product involvement and enjoyment of shopping and search

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Continued
Situational Factors Experience First time purchase No past experience because the product is new Unsatisfactory past experience within the product category Social Acceptability The purchase is for a gift The product is socially visible

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Continued
Value-Related Considerations Purchase is discretionary rather than necessary All alternatives have both desirable and undesirable consequences Family members disagree on product requirements or evaluation of alternatives Many sources of conflicting information

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Issues in Alternative Evaluation

Evoked / Consideration Set Criteria Used for Evaluating Brands Consumer Decision Rules Lifestyles as a Consumer Decision Strategy Incomplete Information and Noncomparable Alternatives Series of Decisions Decision Rules and Marketing Strategy Consumption Vision
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The Evoked Set as a Subset of All Brands in a Product Class

All Brands Known Brands
Evoked Set Inept Set

Unknown Brands
(1) Inert Set

Acceptable Brands

Unacceptable Brands
(2)

Indifferent Brands
(3)

Overlooked Brands
(4)

Purchased Brands
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Not Purchased Brands

(5)

Consumer Decision Rules

Compensatory Noncompensatory
Conjunctive Decision Rule Disjunctive Decision Rule Lexicographic Rule

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Compensatory Decision Rules

A type of decision rule in which a consumer evaluates each brand in terms of each relevant attribute and then selects the brand with the highest weighted score.

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NonNoncompensatory Decision Rules

A type of consumer decision rule by which positive evaluation of a brand attribute does not compensate for a negative evaluation of the same brand on some other attribute.

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Conjunctive Decision Rule

A noncompensatory decision rule in which consumers establish a minimally acceptable cutoff point for each attribute evaluated. Brands that fall below the cutoff point on any one attribute are eliminated from further consideration.

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Disjunctive Rule

A noncompensatory decision rule in which consumers establish a separate minimally acceptable cutoff point for each relevant attribute.

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Lexicographic Rule

A noncompensatory decision rule consumers first rank product attributes in terms of importance, then compare brands in terms of the attribute considered most important.

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Affect Referral Decision Rule

A simplified decision rule by which consumers make a product choice on the basis of their previously established overall ratings of the brands considered, rather than on specific attributes.

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Hypothetical Use of Popular Decision Rules in Making a Decision to Purchase an Ultralight Laptop
DECISION RULE Compensatory rule MENTAL STATEMENT I selected the computer that came out best when I balanced the good ratings against the bad ratings. I selected the computer that had no bad features. I picked the computer that excelled in at least one attribute. I looked at the feature that was most important to me and chose the computer that ranked highest on that attribute. I bought the brand with the highest overall rating.

Conjunctive rule Disjunctive rule Lexicographic rule

Affect referral rule

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Output
Post Decision activity Purchase behaviour Post purchase evaluation

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Types of Purchases
Trial Purchases Repeat Purchases
Long-Term Commitment Purchases

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Outcomes of Postpurchase Evaluation

Actual Performance Matches Expectations Actual Performance Exceeds Expectations
Positive Disconfirmation of Expectations

Performance is Below Expectations

Negative Disconfirmation of Expectations

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