Transcript CONSUMER_DECISION_MAKING_382136778

CONSUMER DECISION MAKING
- By Vidushi Sharma
•quickly list 10 items you have purchased in the past
month
•reexamine how long it took you to make a decision
on each
•why did such a difference in decision occur?
Types of Decision Making
1. Routinised response behavior/ Habitual buying
behavior
• Simple, low cost, frequent purchasing, not much
search for information, clear preference for brand.
2. Limited problem solving/ Dissonance reducing
buying behavior
• New brand in known product class, moderate
information search and time in choosing
3. Extensive problem solving/ Complex buying behavior
• Unfamiliar product class, criteria not known, need
for information search, longer time in decision.
Routine Problem
Solving
Limited Problem
Solving
Extensive problem
Solving
Purchase
involvement level
Low
Medium
High
Problem
Recognition
Automatic
Semiautomatic
Complex
Information search
and evaluation
Minimal
Limited
Extensive
Purchasing
orientation
Convenience
Mixed
Shopping
Postpurchase
processes
Very Limited
Limited
Complex
Buying Motives
• ‘Motive’ can be a strong desire, feeling, an urge from
within, a drive, stimulus or emotion which plays a
role in consumer decision to purchase a product.
• Prof D. J. Duncan: “ those influences or
considerations which provide the impulse to buy,
induce action or determine choicein purchase of
goods”
BUYING MOTIVES
Product motive
Patronage motive
Emotional
Emotional
Rational
Rational
INPUT
Need Recognition
Process
Pre purchase Search
Evaluation Of Alternatives
Output
Purchase
Post Purchase Evaluation
Input:1.
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Firms Marketing Efforts
Product
Price
Place
Promotion
2.
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Socio-Cultural Environment
Family
Social classes
Culture and Sub-culture
Informal sources
Need Recognition:• Consumer recognizes a need when is faced with a
problem.
• Two types of problem recognition
 Actual state type of problem
 Desired state type of problem. Eg JAISALMER cigarette
 Motivational Arousal :• Satisfaction optimization: leisure and entertainment
• Satisfaction maintenance: maintain status quo
• Prevention of possible future problem
• Problem avoidance
• Conflict resolution: satisfying more than 1 need by 1
purchase
Types of Problem Recognition :
Immediacy Of Solution
Expectancy
Of Problem
Immediate solution Immediate
required
solution not
required
Occurrence was
expected
Routine problem
Planning problem
Occurrence
unexpected
Emergency
problem
Evolving problem
 Routine Problem: Convenience goods, Grocery purchases
 Emergency problem: ATM, credit cards
 Planning problem: Durable goods
 Evolving problem: Fashion
Situations leading to problem recognition
• Marketers understand such situations so that they
can remind the customers of such situations. Eg:
Domino’s, Cadbury
1. Depleted or Inadequate stock of goods
2. Discontentment with existing stock of goods
3. Changing financial circumstances
4. Marketing Efforts: try to create a gap
between actual and
desired state
Marketing helps consumers
recognize (or create) an
imbalance between present
status and preferred state
Marketing Implications:
• Marketer can segment customers on the basis of
their motives. Eg TVS jive
• Marketer can devise promotional campaign
according to uniqueness of segment. Eg Dabur
• Marketers can provide the consumer with the
opportunity to recognize their need for particular
goods and service. Eg ‘Diamonds are ideal gift’
• Identify situations in which consumers are likely to
make purchases. De Beers- Wedding collection,
cadbury, Kurkure
• Marketers can manage marketing mix elements well
to take advantage of recognized problem situation.
Eg Maruti Suzuki
Information Search:
• Once the need or problem is identified customer
starts seeking information.
• Various sources of information are:
 Own personal experience
 Reading about product in mass media
 A lecture on the product
 Word of mouth
 Shop window display
 Friends and relatives
Type of Information sought by potential buyer
1. Evaluation Criteria: features to meet needs, price,
wash capacity, power
consumption, heater facility,
drying facility
2. Appropriate alternatives : various brands available
to satisfy the criteria
3. Alternative characteristics: gather information on
each brand on each
pertinent evaluative
criteria.
Information collection & processing
SET NAME
EXPLANATION
INFORMATION IMPLICATION
• Awareness Set
Consist of all the brands that
the customers knows of
Customer collects preliminary
information on these brands
and scrutinizes them in a
cursory fashion
• Inept Set
Customer definitely finds it
unworthy of consideration
Consumer is not interested in
any information on the
brand(s) in this set
• Evoked Set
Based on preliminary
investigation customer finds
them worthy of further
attention
customer is interested in
gathering as much information
as is needed for decision
making on these brands
• Inert Set
Consumer is indifferent
towards these choices
These brands are acceptable if
none of the brands from the
evoked set can be bought.
Thus, while consumer is not
actively seeking information
on these brands, he passively
accepts information on them.
The information search
An internal search involves the scanning of one's
memory to recall previous experiences or knowledge
concerning solutions to the problem-- often
sufficient for frequently purchased products.
An external search may be necessary when past
experience or knowledge is insufficient, the risk of
making a wrong purchase decision is high, and/or the
cost of gathering information is low.
Personal sources (friends
and family)
Public sources (rating
services like Consumer
Reports)
Marketer-dominated
sources (advertising or
sales people)
External Search:
• Information in memory is missing, inadequate, or is
suspect, then an external search is required.
• Amount of external search activity depends upon:
a. Perceived value vs perceived cost:
 Financial cost
 Time cost
 Physical cost
 Psychological cost
b. Individual factors:
 Experience with a product
 Open mindedness and self confidence of consumer
 Educational level income status
 Degree of involvement
c. Situational Factors:
 Urgency of need and availability of time
 Special opportunities arise to purchase at an
attractive prices.
d. Risk Factor:
 Functional/ Performance risk
 Financial risk
 Psychological risk
 Social risk
 Physiological risk
e. Types of product sought:
 Shopping goods
 Convenience goods
Marketing Implications :
• Marketer can make the task easy for customer like
finding the information, understanding it and using
it.
• Marketer can minimize both risks and costs to the
consumer in making product selection.
Evaluation of Alternatives
• Evaluation criteria are the various features that a
customer looks for in a response to a particular type of
problem.
• Tangible criteria: price, color, size, shape etc
• Intangible criteria: brand image, feeling associated with
ownership
• Evaluation criteria differ in number, type and
importance.
• It varies with customer, product, situation.
Eg purchasing a pair of jeans
• Number of evaluation criteria depends on importance
of purchase
 Non compensatory decision rules
• The weakness of a possible alternative not
offset by its strength.
• All the criteria should be satisfactory for
purchase.
Compensatory decision rules
• Trade off while comparing alternatives
• Weighted rating is used.
Marketing Implications
• Evaluation is comparative: ensure own brands are
rated superior
• Educate the customers on criteria that should be
used for evaluation.
Purchase Behavior
Type of purchase
Trial purchase or
First time
purchase
Repeat purchase
Long term
commitment
purchase
Post purchase evaluation
• Experiences are judged against expectations
1. Neutral feelings
2. Satisfaction : Positive disconfirmation of
expectations
3. Dissatisfaction : negative disconfirmation of
expectations
•think of an important purchasing decision you
have made
•what are some of the thoughts you have had
following your purchase? Any regrets?
•what has influenced those thoughts?
•how have you dealt with the discomfort?
•how has the company anticipated or dealt with
your discomfort?
Postpurchase Behavior
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
Underpromise & overdeliver
Cognitive Dissonance
•psychological discomfort caused by
inconsistencies among a person’s
beliefs, attitudes, and actions
•varies in intensity based on importance
of issue and degree of inconsistency
•induces a “drive state” to avoid or
reduce dissonance by changing beliefs,
attitudes, or behaviors and thereby
restore consistency
Strategies to reduce dissonance
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Rationalize the decision to be wise
Look for advertisements to support their choice
Persuade others to buy the same brand
Meeting satisfied owners for reassurance
THANK YOU