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Consumer Decision Making I:The Process

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Levels of Consumer Decision

MakingExtensive Problem

Solving

Limited ProblemSolving

Routine ResponseBehaviour

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Factors That Affect the Type of Decision Making Process Used

Importance of the decisionExtent of previous experienceExistence of well-established decisioncriteriaAmount of information at hand about eachalternative

The number of alternatives availableModel of consumption being followed

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Consumer Decision Making The

ProcessNeed RecognitionPre-purchase SearchEvaluation of Alternatives

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Need or Problem Recognition

The realization that there is a differencebetween actual and desired states The higher the gap, the stronger the need (or

bigger the problem)

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Types of Problems

Active Versus Inactive problems Active: those you are aware of

Inactive: those that you are not yet aware of (but exist)

Those that require immediate solutions and

those that do not require immediatesolutions

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Problem Recognition and

Marketing StrategyIdentify existing consumer problems and findsolutions for these

Lower the actual stateIncrease the desired stateIncrease the importance of the gap between actualand desired states

Convert inactive problems to active problemsConvert problems into ones requiring animmediate solution

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Pre-Purchase Search

Types of Information SourcesTypes of Information SoughtFactors Affecting Extent of InformationSearch

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Types of Information Sources

PERSONAL

Friends

NeighborsRelativesCo-workersComputer salespeopleCalling the electronics

store

IMPERSONAL

Newspaper articles

Magazine articlesConsumer Reports Direct-mail brochuresInformation from productadvertisements

Internal web site

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Types of Information Sought

Brands or alternatives availableEvaluative criteria to be used Generally, product features

Ratings of brands on evaluative criteria

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Factors that Increase the Level of Pre-purchase Search

Product Factors: Higher search when It is a long-lasting or infrequently used

product

There are frequent changes in product styling Large volume is purchased The price is high There are many alternative brands There is much variation in features

continued

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Factors that Increase the Level of Pre-purchase Search

Situational Factors: Higher search when: Experience is lower Previous experience was unsatisfactory

Social Acceptability: Higher search when: Purchase is a gift Product is socially visible in use

continued

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Factors that Increase the Level of Pre-purchase Search

Value-Related Factors: Higher searchwhen: Purchase is discretionary All alternatives have both positive and

negative qualities

No agreement among users exists Conflicting information is available Other considerations exist

continued

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Factors that Increase the Level of Pre-purchase Search

Consumer Factors: Higher search when: Consumers are well-educated, have higher

income levels and are younger

Consumers are low in dogmatism and riskperception

Level of involvement is high

Shopping is seen as an enjoyable activity

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Nature of Evaluative Criteria

Can be tangible or intangibleInclude surrogate indicators readily observable attribute of a product used to

represent the performance level of a lessobservable attribute

Are often ranked in order of importance

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Consumer Decision Rules

Procedures used by consumers to facilitatebrand or other consumption-related choices

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Consumer Decision Rules

Compensatory Rules Non-compensatory Rules

Conjunctive decision Rule Lexicographic Decision Rule

Disjunctive Rule

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Compensatory Decision Rules

One of the major decision rule used by consumersfor evaluating alternative brands with respect to

how they performs on relevant or salientattributes and the importance of each attribute.This decision rule allows for a negativeevaluation or performance on a particularattribute to be compensated for by a positiveevaluation on another attribute.

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Non-compensatory Decision Rule

Decision rules are said to be noncompensatory when good performance on

one evaluative criterion does not offset orcompensate from poor performance onanother evaluative criterion, of the brand.

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Non-Compensatory Consumer

Decision RulesConjunctive Decision Rule Product attributes are identified

a minimally acceptable cutoff point isestablished for each attribute

brands that fall below the cutoff point on

any one attribute are eliminated fromfurther consideration.

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Non-Compensatory Consumer

Decision RulesDisjunctive Decision Rule consumers identify product attributes

establish a minimally acceptable cutoff point for each attribute

accept the brand that meets or exceeds

the cutoff for any one attribute

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Non-Compensatory ConsumerDecision Rules

Lexicographic Decision Rule Product attributes are identified Product attributes are ranked in terms of

importance brands are compared in terms of the attribute

considered most important Brand that scores highest on the first attribute is

chosen If there is a tie, the scores on the next attribute

are considered

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Issues in Alternative Evaluation

Lifestyles as a Consumer Decision StrategyIncomplete Information

Non-comparable AlternativesSeries of DecisionsConsumption Vision

Mental picture of the consequences of using aparticular product

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Coping with Missing Information

Delay decision until missing information isobtained

Ignore missing information and useavailable informationChange the decision strategy to one thatbetter accommodates for the missinginformationInfer the missing information

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Information Search and

Marketing StrategyGet products into consumers evoked set Limit information search if your brand isthe preferred brandIncrease information search if youralternative is not the preferred brandUse point-of-purchase advertisingeffectively

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Alternative Evaluation and

Marketing StrategyIdentify decision rule used by target market anduse suitable promotional messages

Influence the choice of evaluative criteriaInfluence the rating of your product on evaluativecriteria usedUse surrogate indicators effectivelyUse consumption vision