Prepared By- Mathew Lawrence

Why study Consumer Decision Making What is consumer mind (Black Box) Concepts - consumer decision, purchase involvement and product involvemt Types of consumer decisions Roles of Consumer in C.D.M Consumer Decision Making process
Need Recognition process Information search process Evaluation process Purchase Post-purchase

Factors influencing C.D.M

Opening Case on Aarey Milk Diary. So firms that choose not to understand their consumers purchasing behaviour often lose out of the market. An excellent engineered product may fail just because the customer does not identify himself or herself with it. (share examples) The firm must understand the buyers purchasing behaviour. Specially how the buyer decides, what motivates him and who influences him. The marketer needs to focus on how and why of the total experience consumers have with products and service. (share examples)

Buyers continues to be an Enigma- sometimes responding the why the marketer wants and on other hand occasions just refusing to buy the product from the same marketer.- Black Box The marketers provide stimuli but he is uncertain of the buyers response. This stimuli is a combination of product price etc.
Stimulus
Company controlled
Product Price Advertising Sales Promotion Display Distribution

Buy

Response
Consumer mind(Black Box)

Social
Word of mouth Reference Group

No Buy

A decision is a set of an options from two or more alternatives choices. So consumer decision produces an image of an individual carefully evaluating the alternatives of a set of products, brand or services and rationally selecting the one that solves a clearly recognized need for the least cost.

Purchase involvement is the level of concern for, or interest in the purchase process triggered by the need to consider a particular purchase.
Product involvement is the level of concern for a particular brand or a product category. Examples: Juice (purchase involvement ) Slice, Mirinda, Thums up etc. (product involvement)

Nominal decision making

Problem recognition

Limited decision making

Problem recognition

Extended decision making

Problem recognition

Information search Internal Limited external

Information search Internal External

Information search Limited internal

Alternative evaluation Few attributes Simple decision making Few alternatives

Alternative evaluation Many attributes Complex decision making Many alternatives

Purchase

Initiator Influencer Decider

Buyer
User

Consumer decision processes are the decision making processes undertaken by consumers in regard to a potential market transaction before, during, and after the purchase of a product or service. The focus of this process, forms an integral part of consumer behaviour on how consumers spend their available resources (such as time and money) on personal and household products and services so as to satisfy their needs.

The decision-making processes that consumers use when making purchases vary, particularly with regard to the time and effort that they take to reach a decision.

Problem recognition is the first stage in C.D.M process. Problem recognition is the result of a discrepancy between a desired state and a actual state that is sufficient to arouse and activate the decision process. Eg: Feeling Bored- actual state. Listening music/Call friend desired state. Types of Consumer Problem Consumer problem may be either active problem or inactive problem. Active problems only require the marketers to convince consumers that its brand is the superior solution. Inactive problems require the marketer to convince consumers that they have the problem and the marketers brand is a superior solution to the problem which is more difficult task.

Marketing Strategy used problem recognition Discover Consumers problem

Activity analysis Product analysis Problem analysis

Responding to Consumer problem Helping Consumer recognize problem Suppressing problem recognition

Once problem is recognized relevant information from long-term memory is used to determine if a satisfactory solution is known, what are the characteristics of potential solution are, what are appropriate ways to compare solutions and so forth- This is called Internal search. If a resolution is not reached through internal search, then external search is focused. It is important to note that even in extended decision making with extensive external search, the initial internal search generally produces a set of guides or decision constraints that limit and guide external search. Examples of External search: web, books, articles newspaper, friends etc.

Types of Information Evaluative Criteria: The desired characteristics are the consumers evaluative criteria. Ex: Laptop or Computer

Appropriate Alternative: Here the consumer seeks for different companies or brand Ex: Dell, HP Asus, Toshiba, , Apple, Fuji.
Evoked Set Dell HP These are the brands which are know very well Inert Set Asus Toshiba Apple Which are known but not the performance Inept Set Fuji

Which are not known

Alternative Characteristics: Here the consumer compares the different features of the selected evoked set Ex: price, memory, processor etc.

When potential consumers have all the necessary internal and external information on alternatives, they have to evaluate the alternatives in order to make a purchase. Information will lead to an evoked set(familiar brands) of alternative products from which a choice will then have to be made. Theory of Evoked Set- By Howard and Sheths
Awareness Set (brands aware off) Consideration Set (brands considered) Decision Set (brands decided)

Total Set (all brands)

Purchase Set

Consumers use several attributes when they are evaluating alternative products and they are more interested in a specific attribute that brings the sought benefits. Example: Price, Quality, availability, service, performance etc The number of criteria used in decision making are relatively limited, usually less than six. Also, not all criteria are equally important. The criteria used to make a decision change depends on the consumer, the product, and the situation.

Consumers generally make three types of purchase: trial purchase, repeat purchase and long term commitment purchase. Trial purchase would be in smaller in quantity and it would be also termed as Exploratory phase. Repeat purchase is very closely related to brand loyalty, which firms try to encourage because it contributes to greater stability in the market share.

The purchasing process does not end when a consumer buys a product . After the purchase consumers tend to evaluate their experience to decide if they are satisfied or dissatisfied. The information will be used in future decision-making. The performance of the product or service will be compared with consumers expectations. There are three possible outcomes of these evaluations:
Perceived performance meeting expectations Perceived performance exceeding expectations Perceived performance being lower than expectations

When a consumer thinks of the unique, positive qualities of the brand not selected, it is known as cognitive dissonance. When cognitive dissonance occurs Marketing can minimize through: Effective Communication after a purchase, it is called Follow-up post purchase dissonance. Guarantees
Warranties

External Influence Firms Marketing Efforts 1. Product 2. Promotion 3. Price 4. Channel of distribution Socio cultural Environment 1. Family 2. Informal sources 3. Other non commercial sources 4. Social class 5. Sub culture and culture I N P U T

Consumer Decision Making Need Recognition Information Search Evaluation of Alternatives Purchase Post-purchase Psychological Field 1.Motivation 2.Perception 3.Learning 4. Personality 5. Attitude Experience
Purchase 1. Trial 2. Repeat purchase

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