Purchase Decision Making - An Overview

CHAPTER - III

PURCHASE DECISION MAKING - AN OVERVIEW

3.1 INTRODUCTION

The purchase is only the visible part of a more complex decision process created

by the consumer for each purchasing decision he makes. But what happens before and

after this purchase? What are the factors influencing the choice of product purchased by

the consumer? Who make the purchase decision? Are the most important questions to be

answered? 1 As a point in time, each member of the family has a set of predispositions,

both positive and negative, toward products and specific brands involved in the purchase

decisions. These predispositions are presumed to be different in many instances because

of difference(s) in motives, attitude, taste and perceptions of individual members. For

example, in purchasing of an automobile, the husband may prefer a medium priced full

size sedan, the wife may prefer a low-priced full size station wagon, and the teenage

children may prefer a high –priced small imported sports car. Within each of these types,

the members may perceive the benefit of specific cars differently. A member’s

predisposition is a function of his purchasing motives and evaluative beliefs of specific

brands in attaining or blocking his purchasing motives2.

A large number of purchase decisions are influenced by a person’s interaction

with his family, friends, relatives and acquaintances. There are distinct roles in the

spouse’ decision process, and to effectively market the products, marketers must identify

who makes and has input into the purchasing decision. There are variations by product in

the spouse purchasing roles and also identifies dealers understanding of these roles and

social influences, It was found that for television, the demand was initiated and

1
R. Ferber, “Family Decision Making and Economic Behaviour|, in E.B. Sheldon, ed., Family Economic
Behaviour”,Problems and Prospects. Philadelphia: J.B. Lippincott Company, 2007.
2
Quallls WJ, Jaffe F. 2002. Measuring conflict in household decision behaviour: read my lips and read my
mind. Advances in Consumer Reaerch 19: 522 – 531.

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 Purchase Decision Making - An Overview

influenced mostly by husbands but for refrigerator and washing machine it was done

mostly by wives, the demand was initiated and influenced mostly by spouse of the family,

the final decision and payment was done mostly by male members. This indicates that

even today our society is a practical one. It was also found that children’s playing an

increasingly important role in purchase decisions of their family, which may be attributed

to the sociological changes taking place3.

Marketers and consumer researchers consider spouse in the family to be the most

important decision makers and consumption unit. A considerable share of consumption

decisions takes place within the family context and is therefore collective rather than

individual in nature. As family members, children have been acknowledged as playing an

important role within purchasing decisions. Early research on family decision making

only considered the roles of adult partners (spouse) about the processes and complexities

of family purchasing, such as how families arrive at purchase decisions and what

influence behaviour and communication dynamics form part of the decision process

making4.

3.2 THE CONSUMER PURCHASE DECISION PROCESS

3.2.a Purchase Decision Process5

Engel, Blackwell and Kollat have developed in 1968, a model of consumer purchasing

decision process in five steps: Problem/need recognition, information search, evaluation

of alternatives to meet this need, purchase decision and post-purchase behaviour.

3
Wang Zhenzhen. Empirical Study on Impacts of Tourism Consumers' Purchase Decision Making
Evaluated by China Online Tourism [D]. Beijing International Studies University, 2012
4
Peng Wei, Deng Desheng. The Application of Clustering Analysis in Consumer Purchasing Behaviour [J].
China Collective Economy, 2009 (01): 90-93
5
Adam Sarner (2007), “E-Marketing Improves the Customer's Buying Process,” Gartner
Research, ID Number: G00146513, March 1st, 2007, p2-5

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 Purchase Decision Making - An Overview

I. Need recognition / Problem recognition: The need recognition is the first and most

important step in the purchasing process. If there is no need, there is no purchase. This

recognition happens when there is a lag between the consumer’s actual situation and the

ideal and desired one. However, not all the needs end up as a purchasing behaviour. It

requires that the lag between the two situations is quite important. But the “way” (product

price, ease of acquisition, etc.) to obtain this ideal situation has to be perceived as

“acceptable” by the consumer based on the level of importance he attributes to the need.

For example, you have a pool and you would like someone to take care of regularly

cleaning it instead of you (ideal situation) because it annoys you to do it yourself (actual

situation). But you don’t judge the “way” to reach this ideal situation as “acceptable”

because its price to obtain it seems too high. Especially compared to the relatively low

level of importance you attach to it. So you won’t have a purchase behaviour in this

situation.

On the other hand, the ability to be able to go to your work by car in 20 minutes

every morning (ideal situation) rather than lose three hours in transit because you do not

have a car and you live in the countryside (actual situation) is something that means a lot

to you. So you will have a purchasing behaviour to purchase a car. In addition to a need

resulting from a new element, the gap between the actual situation and the ideal situation

may be due to three cases. The current situation has not changed, but the ideal situation

has changed or, the ideal situation is still the same but it is the actual situation that has

changed or finally, the two situations have changed. The recognition of a need by a

consumer can be caused in different ways. Different classifications are used6: Internal

stimuli (physiological need felt by the individual as hunger or thirst) which opposes the

external stimuli such as exposure to an advertisement, the sight of a pretty dress in a shop

6
Puto, C. (1987), “The framing of Buying Decisions,” Journal of Consumer Research,
December, Vol. 14, Issue 3, p 301-03

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 Purchase Decision Making - An Overview

window or the mouth-watering smell of a French “pain au chocolate” when passing by a

bakery.

Classification by type of needs:

∑ Functional need: the need is related to a feature or specific functions of the product or

happens to be the answer to a functional problem. Like a computer with a more powerful

video card to be able to play the latest video games or a washing machine that responds to

the need to have clean clothes while avoiding to do it by hand or go to the Laundromat.

∑ Social need: the need comes from a desire for integration and belongingness in the

social environment or for social recognition. Like purchasing a new fashionable bag to

look good at school or choose a luxury car to “show” that you are successful in life.

∑ Need for change: the need has its origin in a desire from the consumer to change. This

may result in the purchase of a new coat or new furniture to change the decoration of your

apartment.

The Maslow’s hierarchy of needs: Developed by the eponymous psychologist, this is

one the best known and widely used classifications and representations for hierarchy of

needs. It specifies that an individual is “guided” by certain needs that he wants to achieve

before seeking to focus on the following ones:

1. Physiological needs

2. Safety needs

3. Need of love and belonging

4. Need of esteem (for oneself and from the others)

5. Need of self-actualisation

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 Purchase Decision Making - An Overview

II. Information search: Once the need is identified, it’s time for the consumer to seek

information about possible solutions to the problem. He will search more or less

information depending on the complexity of the choices to be made but also his level of

involvement. (Purchasing pasta requires little information and involves fewer consumers

than purchasing a car.) Then the consumer will seek to make his opinion to guide his

choice and his decision-making process with:

Internal information: This information is already present in the consumer’s memory. It

comes from previous experiences he had with a product or brand and the opinion he may

have of the brand. Internal information is sufficient for the purchasing of everyday

products that the consumer knows – including Fast-Moving Consumer Goods (FMCG) or

Consumer Packaged Goods (CPG). But when it comes to a major purchase with a level of

uncertainty or stronger involvement and the consumer does not have enough information,

he must turns to another source:

External information: This information on a product or brand received from and

obtained by friends or family, by reviews from other consumers or from the press. Not to

mention, of course, official business sources such as an advertising or a seller’s speech.

During his decision-making process and his Consumer Purchasing Decision Process, the

consumer will pay more attention to his internal information and the information from

friends, family or other consumers. It will be judged more “objective” than these from

advertising, a seller’s speech or a commercial brochure of the product.

III. Alternative evaluation: Once the information collected, the consumer will be able to

evaluate the different alternatives that offer to him, evaluate the most suitable to his needs

and choose the one he thinks it is best for him. In order to do so, he will evaluate their

attributes on two aspects. Each consumer does not attribute the same importance to each

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 Purchase Decision Making - An Overview

attribute for his decision and his consumer purchasing decision process and it varies from

one shopper to another.

IV. Purchase decision: Now that the consumer has evaluated the different solutions and

products available for respond to his need, he will be able to choose the product or brand

that seems most appropriate to his needs. Then proceed to the actual purchase itself. His

decision will depend on the information and the selection made in the previous step based

on the perceived value, product’s features and capabilities that are important to him. But

his consumer purchasing decision process and his decision process may also depend or be

affected by such things as the quality of his shopping experience or of the store (or online

shopping website), the availability of a promotion, a return policy or good terms and

conditions for the sale. For example, a consumer committed to the idea of purchasing a

stereo of a well-known brand could change his decision if he has an unpleasant

experience with sellers in the store. While a promotion in a supermarket for a yogurt

brand could tip the scale for this brand in the consumer’s mind who was hesitating

between three brands of his “evoked set”.

V. Post-purchase behaviour: Once the product is purchased and used, the consumer will

evaluate the adequacy with his original needs (those who caused the purchasing

behaviour) and whether he has made the right choice in purchasing this product or not. He

will feel either a sense of satisfaction for the product (and the choice). On the contrary a

disappointment if the product has fallen far short of expectations, an opinion that will

influence his future decisions and purchasing behaviour. If the product has brought

satisfaction to the consumer, he will then minimise stages of information search and

alternative evaluation for his next purchases in order to buy the same brand, which will

produce customer loyalty.

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 Purchase Decision Making - An Overview

On the other hand, if the experience with the product was average or

disappointing, the consumer is going to repeat the 5 stages of the Consumer Purchasing

Decision Process during his next purchase but by excluding the brand from his “evoked

set”. The post-purchase evaluation may have important consequences for a brand. A

satisfied customer is very likely to become a loyal and regular customer. Especially for

everyday purchases with low level of involvement – such as FMCG or CPG. A loyalty

which is a major source of revenue for the brand when you combine all purchases made

by customer throughout his entire life (called “lifetime customer value”).

Positive or negative, consumers will also be able to share their opinion on the

brand. Whether in their family or by word-of-mouth on a much broader scale now with

social networks or on consumer product review websites a tendency not to be overlooked

because now with the Internet an unhappy customer can have a strong power to harm a

brand. That’s why that’s important for companies to have awareness of that matter. In

addition to optimising the customer experience, a guarantee (for example, for a washing

machine), an efficient customer service and a specific call center are some of the assets

that can be developed to improve post-purchase behaviour if there is any trouble with the

product.

3.2.b Consumer Purchasing Decision Process: Nothing like a real example to better

understand the five stages of the consumer purchasing decision process7.

Stage 1 – Need recognition: It’s Sunday night - You’re hungry (internal physiological

stimuli) and there is nothing in the fridge. You will order food (statement of need).

Stage 2 – Information search: You already have ordered to the Indian restaurant in your

street last month (internal information). A friend recommended a pizza in your

7
Udo Mildenberger and Ashuman Khare (2000) “Planning for an environment –friendly
car”,Technovation 20

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 Purchase Decision Making - An Overview

neighbourhood (external information from environment). And this morning you’ve found

a flyer for a sushi restaurant in your mailbox (external information from advertising).

Stage 3 – Alternative evaluation: You have a bad opinion of the Indian restaurant since

you’ve been sick the last time (inept set). The pizzeria is both recommended by your

friend and also happens to be a well-known brand (positive perception – evoked set). As

for the sushi restaurant, it got good reviews on Trip advisor (positive perception – evoked

set).

Stage 4 – Purchase decision: After evaluating the possibilities, you’ve decided to choose

the well-known pizza delivery chain. In addition, a new episode of your favourite TV

show is broadcasted tonight on TV.

Stage 5 – Post-purchase behaviour: The pizza was good (positive review). But you

know there were too many calories and you regret a little bit (mixed feelings about

yourself). The next time you will choose the sushi restaurant. There is less fat in sushi

than pizza (next purchase behaviour)

Chart 1
Simple Process of purchase decision8

8
http://en.wikipedia.org/wiki/Buyer_decision_processes

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 Purchase Decision Making - An Overview

3.3 PURCHASE DECISION-MAKING THEORIES

3.3.a Purchase Decision-Making Theories9

Utility Theory: Early economists, led by Nicholas Bernoulli, John von Neumann, and

Oskar Morgenstern, puzzled over this question. Beginning about 300 years ago, Bernoulli

developed the first formal explanation of consumer decision-making. It was later

extended by von Neumann and Morgenstern and called the Utility Theory. This theory

proposed that consumers make decisions based on the expected outcomes of their

decisions.

In this model consumers were viewed as rational actors who were able to estimate

the probabilistic outcomes of uncertain decisions and select the outcome which

maximised their well-being. However, as one might expect, consumers are typically not

completely rational, nor consistent, nor even aware of the various elements that enter into

their decision-making. In addition, though consumers are good at estimating relative

frequencies of events, they typically have difficulty translating these frequencies into

probabilities. This Utility model, even though it had been viewed as the dominant

decision-making paradigm, had serious shortcomings that could not be explained by the

model.

Satisficing theory: Nobel Laureate Herbert Simon proposed an alternative, simpler

model in the mid-1950s. This model was called Satisficing, in which consumers got

approximately where they wanted to go and then stopped the decision-making process.

An example of this would be in the search for a new apartment. Under the Utility Theory,

consumers would evaluate every apartment in a market form a linear equation based on

all the pertinent variables, and then select the apartment that had the highest overall

Utility Score. With Satisficing, however, consumers might just evaluate apartments

9
Leif E. Hem && Nina M. I., (2004), How to Develop a Destination Brand Logo: A Qualitative and
Quantitative Approach- theories of purchase decision making, Scandinavian Journal of Hospitality and
Tourism, Vol. 4, No. 2, pp.86-99

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 Purchase Decision Making - An Overview

within a certain distance to their desired location, stopping when they found one that was

“good enough.” This theory, though robust enough to encompass many of the

shortcomings of Utility Theory, still left significant room for improvement in the area of

prediction. After all, if a marketing executive couldn’t predict consumer behaviour, then

what use would a decision-making paradigm be? Simon and others have extended this

area in the investigation of the field of bounded rationality.

Prospect Theory: Following Simon, additional efforts were made to develop better

understandings of consumer decision-making, extending beyond the mathematical

optimisation of Utility Theory and somewhat unsatisfying Satisficing Theory. In the late

1970s, two leading psychologists, Daniel Kahneman and Amos Tversky, developed the

Prospect Theory, which expanded upon both the Utility Theory and Satisficing Theory to

develop a new theory that encompassed the best aspects of each, while solving many of

the problems that each presented.

Two major elements that were added by Kahneman and Tversky were the

concepts of value (replacing the utility found in Utility Theory) and endowment, in which

an item is more precious if one owns it than if someone else, owns it. Value provided a

reference point and evaluated both gains and losses from that reference point.

Additionally, gains and losses had a marginally decreasing increase from the reference

point. For example, there was a much greater value for the first incremental gain from the

reference point than for subsequent gains.

Behavioural theory for consumer purchasing behaviour10: The main consumer

purchasing behaviours in western countries have its advantages. Based on above research,

we can conclude both the advantages and disadvantages and clearly know that the

consumer purchasing behaviour is affected by personal factor, cultural factor, social

10
Su C, Fern EF, and Ye K. (2003). A temporal dynamic model of spousal family purchase-decision
behaviour. Journal of Marketing Research, 40 (3), 268-281.

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 Purchase Decision Making - An Overview

factor, and marketing factor. Consumers have recognitions and understandings and then

form the purchasing willingness. Afterwards, they positively collect information and

carry out evaluation plan to ignite purchasing behaviour. In addition, their experience is

told to other consumers which can be regarded as references.

∑ Personal factors: Personal factors include characteristics, attitudes, life style, and

education level. Characteristics refers to the summation of their psychological

characteristics which are presented frequently and stably, mainly including interests and

hobbies, temperament, personality and ability etc. Personal characteristic is based on

genetic factor, which is also formed and developed by social practice. Personal

characteristics have significant influences on consumers in terms of product recognition,

product information collection, product preferences, product selection, and product

purchasing efficiency. These characteristics can stimulate consumers’ purchasing

requirement and motives which will also create great impact on the consumer loyalty and

utilisation rate with permanent influences.

∑ Cultural factors. Cultural factors refer to the culture, subculture and consumer custom

etc. In general, culture refers to the summation of material wealth and spiritual wealth in

the social development course including material culture, system culture, and behaviour

culture. Subculture refers to the culture owned by the secondary group such as religious

culture, national culture and regional culture. The means and approaches of consumers

collect information are determined by culture and subculture and meanwhile culture

determines the selection of consumer subjective consumer behaviour which directly

affects the consumer experience. Even though, there are different consumption habits and

approaches under different environment the emergence and realisation of consumer

behaviour is same. In each stage, the consumption philosophy and consumption approach

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 Purchase Decision Making - An Overview

of consumers shall create great impact on the purchasing behaviour which can slow down

the change speed of consumer mind and behaviour.

∑ Social factors. Political economy, as the superstructure of society is about the right

activity of national management. Besides, the political and economic forms will influence

the consumption quantity, approach and product acquisition access which can also

directly encourage or limit the consumption behaviour and consumer desire. The

development level of economy directly affects the purchasing ability of people as well as

the consumption level and environment. Meanwhile, the economic structure affects the

consumption level and quality. The social class is a group which is made up of people

who have similar social status which is determined by the education, occupation and

income. The different social class leads to different payment means, accepting and

processing methods as well as purchasing approaches. Even though, some people present

similarity in terms of values, life style and consumption habits, there are different

consumption behaviours caused by different economic income, preferences and education

background.

∑ Market mixing factor. In each stage of consumption, the consumption behaviour is

affected by marketing factors. The marketing mix is the basic concept of marketing

management among which, product, price, place and promotion are core elements.

Product purchasing is inevitably related to product price. Price is one of the factors which

directly affect the consumption behaviour. While choosing products, they will compare

the quality, performance, brand, package etc so as to make the purchasing behaviour.

Purchasing channels mainly refer to the place, location and acquisition approach and the

general approaches are super markets, direct marketing and sales promotion etc. The

selection of purchasing channel is the main approach to acquire products which has

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greatly influence on the purchasing satisfaction and cost and sometimes it will also affect

the product selection.

3.3.b Purchase Decision Making- Marketing Theories11

∑ Consideration: The first marketing theory is called Consideration. In this theory,

consumers form a subset of brands from which the decision-making strategies are

applied. For example, if asked to enumerate all the restaurants that one could recall, the

list might be quite extensive for most consumers. However, when a consumer first

addresses the question of where to dine that evening, a short list of restaurants that are

actively considered is utilised for the decision-making process. Multistage decision-

making models were summarised by Allan Shocker, in which the increasing

complexity of a decision produces more steps in the decision process. In essence, more

cognitive effort would be expended in evaluating members of the consideration set and

reducing that number to an eventual choice.

∑ Involvement: The second marketing theory is called Involvement, in which the

amount of cognitive effort applied to the decision-making process is directly related to

the level of importance that the consumer places on acquisition of the specific product.

For example, there is rarely a significant amount of decision-making applied to the

selection of a pack of chewing gum at the grocery store checkout counter, but there is a

much greater amount of decision-making effort applied to the purchase of a new cell

phone. This degree of involvement is not necessarily a function of the price, but is

more related to the perceived impact on the quality of life of the consumer. The quality

of life can come directly from the benefits supplied by the product, or can come

indirectly from the social accolades or sanctions provided by members of the peer

group .

11
Wut TM, Chou TJ. (2012). Do family members agree on family purchase decision - theories? An
empirical study among families in Hong Kong. International Journal of Consumer Studies. DOI:
10.1111/j.1470-6431.2012.01129.x.

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3.4 PURCHASE DECISION-MAKING STRATEGIES

3.4.a Purchase Decision-Making Strategies12

For each product, marketers needed to understand the specific decision-making

strategy utilised by each consumer segment acquiring that product. If this were done,

marketers could position their product in such a manner that the decision-making strategy

would lead consumers to select their product.

Compensatory strategies: The first two strategies are called compensatory strategies, In

these strategies, consumers allow a higher value of one attribute to compensate for a

lesser value of another attribute. For example, if a consumer is looking at automobiles, a

high value in gas mileage might compensate for a lower value in seating space. The

attributes might have equal weight EWS (Equal Weight Strategy) or have different

weights for the attributes WAS (Weighted Additive Strategy). An example of the latter

might be to place twice as much importance on gas mileage than seating space.

Non-Compensatory strategies: The next three strategies are called non-compensatory

strategies, In these strategies, each attribute of a specific product is evaluated without

respect to the other attributes, and even though a product may have a very high value on

one attribute, if it fails another attribute, it is eliminated from consideration. From Simon,

the first of these is satisfying, in which the first product evaluated to meet cut off values

for all attributes is chosen, even if it is not the best. The second of these strategies,

Elimination by Aspects, sets a cut off value for the most important attribute, and allows

all competing products that meet that cut off value to go to the next attribute and its cut

off value. The third strategy, Lexi-graphic, evaluates the most important attribute, and if a

product is clearly superior to others, stops the decision process and selects that product;

otherwise, it continues to the next most important attribute.

12
Quiston, D. H. Mc (2004). Successful branding of a Commodity Product – purchase strategies: The Case
of RAEX LASER Steel, Industrial Marketing Management Vol 33, p.345-357

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Partially compensatory strategies13: The next two strategies are called partially

compensatory strategies, in that strategies are evaluated against each other in serial

fashion and higher values for attributes are considered. The first of these strategies is

called Majority of Conforming Dimensions, in which the first two competing products are

evaluated across all attributes, and the one that has higher values across more dimensions,

or attributes, is retained. This winner is then evaluated against the next competitor, and

the one that has higher values across more dimensions is again retained. The second

partially compensatory strategy is called Frequency of Good and Bad Features, in which

all products are simultaneously compared to the cut off values for each of their relevant

attributes, and the product that has the most “good” features that exceed the cut off values

is the winner. There are other expansions upon these seven basic consumer decision-

making strategies, but they are generally captured as shown above. However, two major

areas of marketing theory also help to provide additional explanatory power to these

strategies.

3.4.b Influence Strategies in a Family for Purchase Decision making14

Reasoning: trying to get the other person(s) to accept one’s view through logical

argumentation. Note that even when this is done with a sincere intent, its potential is

limited by legitimate differences in values illustrated above. Also note that individuals

may simply try to "wear down" the other party by endless talking in the guise of

reasoning (this is a case of negative reinforcement as we will see subsequently).

Authority: It involves asserting one’s "right" to make a decision (as the "man of the

house," the mother of the children, or the one who makes the most money).

13
Schiffman K. (2005) Purchase Decision-Making Strategies, Eight Edition Prentice Hall of India, New
Delhi.
14
Leslie, D. C., Malcom, M., (1992). Creating powerful Brands- The decision making strategic root to
success in consumer, industrial and service markets, Oxford, Butterworth Heinemann, p 140-160

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Experience: Using experience and knowledge as a source of information that will

influence the outcome of the decision.

Legitimate: Emphasising a role stereotype in order to obtain influence. For example, a

mother may assume or point out that she is the one who deals with the provision of food

and therefore should dominate this decision.

Coalition: Two or more members of the family decision-making unit collude in order to

obtain a particular outcome.

Emotion: A member of the decision-making unit tries to persuade others by using

emotive appeals, crying, pouting and other non-verbal techniques in order to achieve

influence. Emotion involves making an emotional display to get one’s way (e.g., a man

cries if his wife will not let him buy a new rap album).

Bargaining: Giving in on this occasion in return for getting their way on some other

occasion. Bargaining—one member will give up something in return for someone else.

For example, the wife says that her husband can take an expensive course in gourmet

cooking if she can buy a new pickup truck. Alternatively, a child may promise to walk it

every day if he or she can have a hippopotamus.

3.5 PURCHASE DECISION MAKING MODELS

Purchase Decision making plays an important role in each stage and the decisions

of consumers are reflected by models, which is worth exploring. At present, widely used

models include Howard-Sheth Model, Nicosia Model, EBK model and Philip Kotler

model15.

v Howard-Sheth Model: Howard and Sheth put forward this model in 1963 which

considers consumer purchasing behaviour from four aspects, which are stimulation or

input factor, external factor, internal factor, reaction or output factor. This model mainly

15
Shi Yongdong, Hu Shuhua. Purchasing Behaviour Model and Evaluation on Cars [J]. Auto Industry
Research, 2003, (02)

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explains the brand selection behaviour. Among which, input factor and external factor can

stimulate consumers’ purchasing behaviour and affect the internal factor, which is equal

to psychological activity. Consumers buy things based on the purchasing experience and

certain stimulations as well as the function of various factors. The purchasing behaviour

v Nicosia Model: Nicosia Model is issued by Nicosia in 1996 which is made up of four

parts: the first part is that entrepreneurs and dealers convey information to consumers via

various channels and consumers will form an attitude; the second part means that

consumers adopt certain approach to collect information and get evaluation and decision

making factors to form purchasing motives; the third part refers to the condition that

consumers are driven by consumer motives who finally take actions based on external

stimulation; the fourth part is about the evaluation after purchasing and information

feedback. After the purchasing, consumers will tell others the experience in the course of

using so as to accumulate experience for others and themselves in terms of purchasing in

the future.

v Stimulus-response model16: Philip Kotler puts forward this model based on the

psychological model of recognition-stimulation-reaction to reveal the decision making

process. This model reflects the condition that consumers make the choice based on the

marketing stimulation and micro environment which is the key of this model and that is to

analyse the complete process of decision making and various factors that will influence

the decision making process.

16
Hong Bo. Analysis on the Consumer Decision Making Model [J]. Journal of Yunnan University of
Finance and Economics: Social Science Edition, 2006 (05).

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3.6 DIFFERENT TYPES OF PURCHASE DECISION-MAKING

All consumer-purchasing decisions are not alike and amount of effort put into the

decision making process differs. When the decision-making process is almost automatic,

snap judgment can be made with little information search. This kind of routinely made

purchasing decision involves little risk and low involvement. Other times the decision-

making process requires a lot of time and information search. The products that are

bought rarely involve high risk and extensive problem solving17. Figure below shows four

types of purchase decision making based on the degree of consumer involvement.

Table 3.1
Four types of purchase decision making

High involvement Low involvement

Significant differences Complex purchasing Variety-seeking purchasing

between brands Behaviour Behaviour
Few differences Dissonance-reducing Habitual purchasing
between brands purchasing behaviour Behaviour

Complex purchasing behaviour can be initiated by a motive that is central to an

individual’s self-concept. The products that are bought seldom like a house or a car

require considerable amount of consideration before the purchase decision. The consumer

is highly involved because the product is expensive, risky and reflects the consumer itself.

Many brands can be evaluated separately to see which brand responds best to the set of

desired characteristics.

Dissonance-reducing purchasing behaviour consumers are highly involved,

because the product can be expensive, self-expressive and bought infrequently. However,

consumers see little or no difference among the brands. It is a straight forward and simple

activity to choose a product among alternatives even if the consumer may shop around.

17
(Kardes et al. 2011, p. 71.)

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Habitual decision-making choices are usually made routinely with little or no

conscious effort. This is almost opposite to extended decision-making where information

is searched. Many decisions are made so routinely that the consumer does not even realise

them before seeing products in the shopping cart. It is almost like consumer works

automatically without conscious control, this kind of activity can be seen dangerous or

stupid, but at the same time efficient.

The consumer can minimise the time used selecting products and energy spends

on decisions. This habit becomes a problem for marketers when they want to change the

consumer’s old habits by introducing a new product. The products that are purchased

frequently, like coffee in this case, can be categorised to the habitual decision-making

mode. Selecting a coffee brand does not need high consideration or information search; it

can be just picked up from the shelf and bought. The involvement level is low in this case

and consumers are likely to stay with one brand for a long time.

Variety seeking purchasing behaviour, as the name already reveals, consumers

are interested to change the brand for the sake of variety rather than dissatisfaction.

Consumers can make purchasing decisions without evaluation and evaluate the brand

during consumption. However, next time the consumer might pick up a different brand

simply to try another brand. This kind of decisions is usually made with the products that

are bought everyday like cookies or coffee. Marketers can encourage consumers to

variety seeking by offering low prices, free samples, or special deals.

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3.7 ROLES IN THE FAMILY DECISION-MAKING PROCESS

3.7.a Roles in the family decision-making process18

The roles in the family decision-making process include: a) influencers-family

member(s) who provide information to other members about a product or service. b)

gatekeepers-family member(s) who control the flow of information about a product or

service into the family. c) deciders-family member(s) with the power to determine

unilaterally or jointly whether to shop for, purchase, use, consume, or dispose of a

specific product or service. d) buyers-family member(s) who make the actual purchase of

a particular product or service. e) preparers-family member(s) who transform the product

into a form suitable for consumption by other family members. f) users-family member(s)

who use or consume a particular product or service. g) maintainers-family member(s)

who service or repair the product so that it will provide continued satisfaction, h)

disposers—family member(s) who initiate or carry out the disposal or discontinuation of a

particular product or service.

As a consumption unit, the family or household functions like any other group

with problems to solve and decisions to make. “Household Decisions and Sources of

Power in Household Marketplace Decisions” gives an overview of the various approaches

to marketplace decision making within the family and how power is shared or

concentrated within any family or household setting. Each member plays a role, some

more active than others. To varying degrees, all family members, including children, are

involved. The husband-wife relationship is, however, of key importance to marketers.

It is important to consider “husband” and “wife” in a context beyond the

traditional view. That is, in any family or household setting, whether traditional (e.g.,

heterosexual couples (spouse), legally married, common-law married) or nontraditional

18
Riley, J. 2012. Buyer behaviour - The decision-making process,
http://tutor2u.net/business/marketing/buying_decision_process.asp Accessed on 7 January 2015

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 Purchase Decision Making - An Overview

(e.g., homosexual couples, unrelated same or mixed gender group, etc.), individuals may

choose or be given the role of “wife” or “husband.” As they play this role out, their

marketplace behaviour is as though they were such a person, regardless of gender, legal

standing, or household situation. For purposes of illustration, we will use wife and

husband to mean whichever household person takes that traditional role. To target their

messages effectively, marketers must identify the primary source(s) of influence and the

decision maker(s) in each purchase decision the husband-wife team makes.

Roles played by family members during purchase decision making were also

named as, the initiator, the influencer, the decider, the buyer and the user. The young,

well-educated women in the family emerged significantly as initiators of the purchasing

decision and students and children among the influencers, and the purchase decision

process was relatively democratic at the initial stages, subsequently it seemed to become

much more unilateral in terms of the role played by the decider-member. The husband

was found to play the highly significant roles of coordinator, decider and buyer.

3.7.b Categories of purchase decisions making in the family19

¸ Husband-dominant family decision making

¸ Wife-dominant family decision making

¸ Autonomic family decision making (husband and wife independently make the

same decision, each doing it about one-half the time; for example, one picks the

movie rental this week and the other picks next week).

¸ Syncratic family decision making (both husband and wife share in the decision)

19
Perreau, F. 2014. The Consumer Factor. The Consumer Buying Decision Process.
http://theconsumerfactor.com/en/5-stages-consumer-buying-decisionprocess/ Accessed on 29 December
2014.

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3.8 FAMILY DECISION MAKING – A VIEW

3.8.a Family Decision Making20

Individual members of families often serve different roles in decisions that

ultimately draw on shared family resources. Some individuals are information

gatherers/holders, who seek out information about products of relevance. These

individuals often have a great deal of power because they may selectively pass on

information that favors their chosen alternatives. Influencers do not ultimately have the

power decide between alternatives, but they may make their wishes known by asking for

specific products or causing embarrassing situations if their demands are not met. The

decision maker(s) have the power to determine issues such as:

∑ Whether to buy;

∑ Which product to buy (pick-up or passenger car);

∑ Which brand to buy;

∑ Where to buy it; and

∑ When to buy.

Note, however, that the role of the decision maker is separate from that of the

purchaser. From the point of view of the marketer, this introduces some problems since

the purchaser can be targeted by point-of-purchase (POP) marketing efforts that cannot be

aimed at the decision maker. Also note that the distinction between the purchaser and

decision maker may be somewhat blurred:

∑ The decision maker may specify what kind of product to buy, but not which

brand;

∑ The purchaser may have to make a substitution if the desired brand is not in stock;

∑ The purchaser may disregard instructions (by error or deliberately).

20
Webster C. (1995). Determinants of marital power(family) in decision making. Advances in Consumer
Research, 22, 717-722.

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 Purchase Decision Making - An Overview

It should be noted that family decisions are often subject to a great deal of

conflict. The reality is that few families are wealthy enough to avoid a strong tension

between demands on the family’s resources. Conflicting pressures are especially likely in

families with children and/or when only a spouse works outside the home. Note that

many decisions inherently come down to values, and that there is frequently no

"objective" way to arbitrate differences. One spouse may believe that it is important to

save for the children’s future; the other may value spending now (on private schools and

computer equipment) to help the children for the future. Who is right? There is no clear

answer here. The situation becomes even more complex when more parties—such as

children or other relatives—are involved.

3.8.b The Family Life Cycle. Individuals and families tend to go through a "life cycle:"

The family life cycle plays an important role in purchase decision making and some of

the life cycles are stated below21.

The simple life cycle:

Chart 2
The simple life cycle – model I

For purposes of this discussion, a "couple" may either be married or merely

involve22 living together. The breakup of a non-marital relationship involving

21
Plummer, J. 2004. The Concept and Application of family Life cycle Segmentation. Journal of Marketing.
Volume 38. American Marketing Association.
22
Foxman, E. R., Tansuhaj, P.S., & Ekstrom, K. M. (2009). “Adolescents' influence in family purchase
decisions: a socialisation perspective”. Joumal of Business Research, 18, 159-172.

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 Purchase Decision Making - An Overview

cohabitation is similarly considered equivalent to a divorce. In real life, this situation is,

of course more complicated. For example, many couples undergo divorce. Then we have

one of the scenarios:

Chart 3
The simple life cycle – model II

Single parenthood can result either from divorce or from the death of one parent.

Divorce usually entails a significant change in the relative wealth of spouses. In some

cases, the non-custodial parent (usually the father) will not pay the required child support,

and even if he or she does, that still may not leave the custodial parent and children as

well off as they were during the marriage. On the other hand, in some cases, some non-

custodial parents will be called on to pay a large part of their income for child support.

This is particularly a problem when the non-custodial parent remarries and has additional

children through second marriage.

Another variation involves

Chart 4
The simple life cycle – model III

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 Purchase Decision Making - An Overview

Here, the single parent who assumes responsibility for one or more children may

not form a relationship with the other parent of the child. Integrating all the possibilities

discussed, we get the following depiction of the Family Life Cycle:

Chart 5
The simple life cycle – model IV

Generally, there are two main themes in the Family Life Cycle, subject to significant

exceptions:

∑ As a person gets older, he or she tends to advance in his or her career and tends to

get greater income (exceptions: maternity leave, divorce, retirement).

∑ Unfortunately, obligations also tend to increase with time (at least until one’s

mortgage has been paid off).

3.8.c Approaches of husband-wife interaction in family decision making

Husband-wife interaction in family decision making is an area of consumer

behaviour that is of growing interest. In recent years, consumer researchers have focused

husband-wife research on the following questions: (1) what is the relative power of each

spouse over the other? (2) Does relative power vary by product, stages in the family life

cycle, and decision style? and (3) what is the influence of marital roles in the decision

making process? Most of the researches on husband-wife decision making has focused on

outcomes, rather than process. A great deal of potential information is lost concerning the

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decision process by using input-output static models23.

Two approaches have dominated the study of husband-wife interaction in family

decision making: (1) power allocation in the marriage and (2) role differentiation24.

Power Allocation: Blood and Wolfe (1960), in their classic work, found the power

position to be the most important aspect of family structure; where power was defined as

the potential ability of one partner to influence the other's behaviour. Blood and Wolfe

found that the partner who contributes the greater amount of resources to the marriage

(where a resource is defined as anything that can be transmitted to the other to help the

latter satisfy his/her needs or attain her/his goals), the greater the power of that individual

over the other. These authors found the relative power of one spouse over the other varied

as a function of product type (e.g., husbands were more influential in decisions related to

the car and career whereas wives were more influential in decisions related to food

budgeting). These findings have been criticised by Herr (1963), however, for examining

power at a global, rather than a specific level, as well as by Safilios-Rothschild (1970).

Power in family decision making has also been related to social class

(Komarovsky 1961), self-concept of power (Woodside 1972) and the impact of children

(Filiatrault and Ritchie 1980) on the distribution of power. In addition, Schaninger and

Allen (1981) examined the relation between the wife's occupational status and her power

in the family. A consistent theme throughout previous research on power allocation is the

focus on static, outcome oriented variables (e.g., the wife or husband estimating their

relative influence over the other with regard to some decision). The empirical research we

will discuss in this paper may be used as an alternative strategy for assessing power,

based on the patterns of interaction, rather than post-hoc self-report estimates.

23
Marken G.A, (2003), Emotional Branding, How Successful Brands the Irrational Edge, Public Relations
Quarterly, Vol. 48, Issue2, p.12-25.
24
Quiston, D. H. Mc (2004), Successful branding of a Commodity Product: The Case of RAEX LASER
Steel, Industrial Marketing Management Vol 33, p.345-357.

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 Purchase Decision Making - An Overview

Role Differentiation: The second major approach towards the study of husband-wife

decision making is the identification of the roles and their relation to the decision process.

Past work in this area has focused on role structure (i.e., husband-dominant, wife-

dominant, etc.) as well as the extent of role specialisation (see Engel and Blackwell 1983;

Schiffman and Kanuk 1983 for a more detailed discussion)25.

Recent work however, has focused on traditional vs. modern sex roles. Traditional

sex roles have been found to be sharply different and rigid, and tent to make family

decision making quite simple; that is, the expected behaviours of the husband-wife are

quite clear. In the more modern sex role, the behaviours expected of each spouse are

becoming less predictable because of the increased flexibility and freedom associated

with the role. Consequently, the decision process for those couples has become more

complex. In a study of changing ferule roles on family purchase patterns, Green and

Cunningham (1975) found that husbands of modern wives tend to make fever purchase

decision than husbands of traditional wives. A more detailed review of the literature on

role differentiation may be found in Schwenk (1983).

3.9 DECISION-MAKING REGARDING CARS

3.9.a Decision-Making Regarding Cars

When households initiate a car purchase, it is assumed that it faces a choice; either

buy one particular type of car from the finite set of car varieties available in the market or

make no purchase at all. In making that choice it is supposed that households assess the

benefit that they would gain from purchasing each different car model. It is assumed that

this choice involves weighing the advantages resulting from the purchase of a vehicle

with a certain set of attributes against a different purchase and running costs. Just like

25
Wolgast, Elizabeth H. 1958. Do husbands or wives make the purchasing decisions? The Journal of
Marketing 23 (2): pp. 151-158.

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 Purchase Decision Making - An Overview

individuals, households use a utility function to give a score to each option, attributing a

higher score to options that provide a greater surplus of advantages over costs26.

Households are assumed to purchase the particular vehicle type those scores

highest, provided that the utility from that option exceeds the option of not buying a car at

all. Arguments of the utility function are the physical and the cost attributes of the car as

well as the characteristics of the household. Characteristics of the household are financial

capabilities and attitudes from both spouses and their interests. According to Baterman

(2008) households evaluate and assign utilities to two types of automobile attributes –

physical and financial. Physical and financial attributes can be expressed in numerical

values and can be subjected to quantitative research. There is also third aspect that cannot

be measured – body type and design27.

3.9.b Application of the previously reviewed theories to car decision making

From a gender role point of view car purchase is seen as male dominant in many

countries, especially in those where a more patriarchal society is predominant. Therefore

marketers can start with assessing where a state stands on a continuum with equalitarian

societies (Denmark, Sweden) on one end and patriarchal societies (India, Saudi Arabia)

on the other. From the relative investment theory’s perspective men might be more

motivated to exert influence in the car purchase decision as they in general have much

higher interest in cars, motoring, technical matters and car racing than women. If we look

at comparative resources theory, males also have potential to exert higher influence in

family car purchase as they contribute more to family budget28.

26
Su, Chenting, Edward F. Fern, and Keying Ye. 2003. A temporal dynamic model of spousal family
purchase-decision behaviour. Journal of Marketing Research 40 (3): pp. 268-281.
27
United States department of labor. Changes in men’s and women’s labor force participation rates.
Washington, January 10, 2007 [cited 04/21 2012]. Available from
http://www.bls.gov/opub/ted/2007/jan/wk2/art03.htm.
28
Putman, M., and W. R. Davidson. 1987. Family roles by product category, columbus, OH. In Family
purchasing behaviour II. Columbus, OH: Management Horizons.

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 Purchase Decision Making - An Overview

In 2009 women earned on average 17% less gross hourly than men in the

European Union (Eurostat,2012). Since car purchase entails major costs, initial and

upkeep, families with low income will be most probably less represented within

customers. Higher income stem from higher education and as discussed previously higher

education and double-earner families have more equalitarian decision-making patterns.

Therefore more joint car purchase decision-making can be predicted. Many factors that

fall into sub-section “other” can differentiate car purchase from purchase of other

products. Buying an automobile is a major decision in most families and can be perceived

of high importance; consequently it will involve more joint-decision making.

Car purchase implies great costs for families and also the perceived risk is high,

therefore one spouse will seek support and agreement from the other. As the

consequences of buying a car might be greater than those arising from, for example,

buying soap. Consumer will devote great amount of effort, searching large amounts of

information, soliciting advice, and agonising over difficult trade-offs.

3.9.c Previous research on family car purchase

Previous researches, when looking at family car purchase, differ in their approach.

Mainly three types of data presentation exist in previous studies. First type is measuring

how autonomous (husband/wife dominated) or joint are decisions - “what/where/when to

buy” and “how much to pay”. Second type of reporting results regarding car purchase is

using three main decision-making stages – problem recognition, information search,

purchase decision. In both types five different labels were usually assigned –“autonomous

by wife”, “wife dominated”, “joint”, “husband dominated” or “autonomous by husband”.

Besides these five labels, in cases where husband’s and wife’s answers were different,

individual answers were reported. Author tried to standardise results reported even though

researchers have used different presentation methods.

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 Purchase Decision Making - An Overview

Unfortunately two main problems exist with analysing and comparing previous

studies. The first one is that some studies like Green et al. (1983) do not elaborate on

decision-making stages or sub-decisions. The second issue is the way the extent of

joint/autonomous decision-making is presented. Studies like Yang et al. (2006) describe

results with words by reporting one of five possible answers (discrete data) instead of a

more precise option used by Webster (1994) where numbers are used (continuous data)29.

Walsh (2010) says that the transition from being perceived as secondary to male

purchasers and being interested primarily in the decorative features of vehicles to

becoming buyers in their own right and persons who understood the mechanical functions

of their cars were related to fundamental changes in women’s position in American

economy and society. As more women gained their driving licenses and as a new

generation of females acquired driver education as part of their upbringing, women came

to demand more from either the family vehicle or their personal one as more households

bought two automobiles30.

3.10 CONCLUSION

Every day, people form impressions of brands from touch points such as

advertisements, news reports, conversations with family and friends, and product

experiences. Unless consumers are actively shopping, much of that exposure appears

wasted. But what happens when something triggers the impulse to buy? Those

accumulated impressions then become crucial because they shape the initial-consideration

set: the small number of brands consumers regard at the outset as potential purchasing

options31. The funnel analogy suggests that consumers systematically narrow the initial-

29
Henthorne, Tony L., Michael S. LaTour , and Tim W. Hudson. 1997. Japanese couples’ marital roles in
stages of product purchase decision making. International Marketing Review 14 (1): pp. 39-58.
30
Fodness, Dale. 1992. The impact of family life cycle on the vacation decision-making process. Journal of
Travel Research: pp. 8-13.
31
Lee, C.K.C., & Beatty, S.E. (2002). “Family Structure and Influence in Family Decision Making”.
Journal of Consumer Marketing, 19 (1), 24-41.

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consideration set as they weigh options, make decisions, and buy products. Then, the post

sale phase becomes a trial period determining consumer loyalty to brands and the

likelihood of purchasing their products again. Marketers have been taught to “push”

marketing toward consumers at each stage of the funnel process to influence their

behaviour. But our qualitative and quantitative research in the automobile, insurance,

consumer electronics, and mobile-telecom industries shows that something quite different

now occurs32.

Actually, the decision-making process is a more circular journey, with four

primary phases representing potential battlegrounds where marketers can win or lose:

initial consideration; active evaluation, or the process of researching potential purchases;

closure, when consumers buy brands; and post purchase, when consumers experience

them. The funnel metaphor does help a good deal—for example, by providing a way to

understand the strength of a brand compared with its competitors at different stages,

highlighting the bottlenecks that stall adoption, and making it possible to focus on

different aspects of the marketing challenge. Nonetheless, we found that in three areas

profound changes in the way consumers make purchasing decisions called for a new

approach33.

Knowledge about buyer behaviour is necessary for the development of effective

marketing strategies. The members of a family influence the decision-making process in

the purchase of different products; therefore the real target for the marketer is not an

individual member but the family as a whole. While there have been several studies on

family dynamics in decision-making, very few pertain particularly to the Indian context,

where the traditional family is different from its Western counterpart in that the `empty

32
Wilks J., “The Relative Importance of Parents and Friends in Adolescent Decision Making,” Journal of
Youth and Adolescence, vol. 15, no. 4, pp. 323-334, 2006.
33
Szybillo G.J. and Sosanie A., “Family Decision-Making: Husband, Wife and Children”,
Advances in Consumer Research, vol. 4, pp. 46-49, 2007.

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nest` stage of the family life cycle is not very common. A large number of Indian families

still have three generations staying together.

A marketer has to compete not only with other brands in his product category but

also with different product categories. This becomes even more significant when the

family is considered as a unit where the needs of several members have to be met from

the limited funds. It is then important for the marketer to understand the intra-family

dynamics and inter-personal relationships at play in the purchase of a consumer durable

product in order to decide the optimal marketing-mix. The nature of the purchase

influence may specify husband-wife roles.

The most important classification by purchase influence defines instrumental

versus expressive roles in family purchasing. Instrumental roles are related to performing

tasks that help the group make the final purchasing decision. Decisions on budgets,

timing, and product specifications are instrumental. Expressive roles facilitate expression

of group norms and provide the group with social and emotional support. Decisions about

colour, style, and design are expressive roles since they reflect group norms34.

Historically, the husband has been associated with the instrumental roles and the wife

with the expressive roles. However it is found that as more wives enter the work force,

husbands are more likely to assume household roles and wives budgetary and planning

roles. As a result, instrumental and expressive roles are becoming more intermingled

between husband and wife.35.

34
Davis, Harry I., and Rigaux, Benny P, ―Perception of Marital Roles in Decision Processes. J.
Consumer Res. 1, pp. 51-62, June 2004
35
Cunningham, William H and Green, Robert T., ―Marketing 48 (2004): 9-10. Davis, Harry L.,
Measurement of Husband-Wife Influence in Consumer Purchase Decisions Marketing Res. 8, pp. 305-312,
August 1

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