Consumer decision making

process
 There are different decision taken by
Consumers in order to get final purchase
of what to buy,how to buy,how much to
buy and when to buy.


 The consumer decision process model

represents a road map of consumers minds
that marketers can use for product
mix,communication and sale strategies

Assumptions underlying consumer decision


process-


 Consumer involvement is necessary to

make a choice from two or more
alternatives


 Consumer uses evaluative criteria to

determine the chosen alternative


 External information is used for

evaluation procedure
 Stage 1-Problem recognition-
 Problem recognition is caused by difference
between consumers ideal and actual stage

 It occurs when the consumer perceives a need
and becomes motivated to solve the
problem

 These causes may be external or internal
factors like out of stocks,disatisfction,new
needs or wants etc

 Consumer buy products when they believe a
products ability to solve a problem is worth
more than the cost of the product.
 Types of problem recognition-


 Routine problems-difference between actual

and desired sales and immediate solution
required


 Emergency problems-problem arises

suddenly and solution has to be found
immediately eg:ATM cash service
 Planning problem-problem is expected,but an
immediate solution is not necessary
 Evolving problem-problem may occur
unannounced,yet it needs no immediate
solution
 Stage 2 –Search for
 Information
 The information search may be external or
internal search often consists of an
attempt to scan information stored in
memory to recall past experience or
purchase alternatives


 To determine how must external information

used depends on factors like culture,social
class,personality etc
 After searching information they get in to
information processing including such steps
 Exposure-Once exposure occurs,one or more
of the senses are activated and preliminary
processing begins
 Attention-it will depend on the relevance of
information
 Comprehensive-Once attention is made,the
message is further analysed and stored in
memory
 Acceptance-Message is accepted or dismissed
 Retention-Finally the info is accepted and
stored for future reference
Stage-3-Pre purchase evaluation of
alternatives


 In this stage compares from different

alternatives and seek answers for what is
best for them
 Consumer uses new or both existing and old
evaluations to select a product or service
 Different evlauation criteria for comparison
between different products and brands
 Other attributes also affect the consumer
behaviour ie Quantity,quality,size and
prices
 Stage -4-Purchase
 People usually do shopping in order to
purchase something


 Once the consumer decides for purchasing,

consumers move through 2 processes


1.The extent to which consumer develop repeat



purchasing patterns


2.The extent to which purchase are unplanned




 Brand loyalty-is positively related to
perceived risk and market structure
variable such as market share of the
dominant brand


 In unplanned purchasing,purchasing is not

specifically planned.several
products,marketing and consumer
charecteristics tend to relate to
unplanned purchasing

  Unplanned purchasing is positively related to


 1,Size of the grocery bills

 2,No.of products purchased
 3,Major shopping trips
 4,Frequency of products purchase


 The choice of a store is very much influenced

by sales person,product displays and POP
advertising
 Step-5-Consumption
 Consumer purchases a product after going
through decision-making process


 Consumer takes possession of goods and

consumption is ready to occur


 Consumption may occur immediately or

delayed depending on the need of
consumption
 Stage-6-Post consumption
evaluation
 Consumer is not always fully aware of the
quality of the product at the time of
purchase


 So he engages in an evaluation of the

purchase decision and rethinks this decision
in the post purchase stage
 This stage consumer experience satisfaction
or dissatisfaction depending on
expectations and actual performance
 If consumers do not use products
properly,then too dissatisfaction occurs
 Concept of customer complaint
behaviour
 The first negative outcome is voice
expressions ie the consumers tell about their
problems regarding the product


 Second is private responses where customers

tell others about the problem which may
cause unfavourable word of mouth
communication


 Thirdly its third party responses ie action for

the consumer is to complain

 Stage-7-Divestment

 This is the last stage in Consumer decision

process model


 In this stage the consumer has several options

like disposal of the
product,recycling,remarketing etc


 Daily routine usable products can be easily

disposed off because it is not of much
amount


 The financial status and environmental factors

play an important role in consumers
 Types of Consumer decisions-


 Nominal decision making- Nominal or

habitual decisions occur when there is low
involvement with the purchase


 Nominal decision does not even include

consideration of the “do not purchase”
alternative


 Generally at a store you scan the shelf for a

product and pick up a brand without even
considering other brands,its price and
potentially relevant factors
 Limited decision making-It involves internal
and limited external search in few
alternatives,simple decision rules on a few
attributes and very little post purchase
evaluation


 Eg:You go for purchase of a new brand

because you are bored using the existing
brand.
 Extended decision making-It involves
extensive internal and external search for
information followed by a complex
evaluation of multiple alternatives


 There is a significant post purchase

evaluation and high degree of consumer
involvement for purchase.
 Role of family in Consumer
behaviour
 Two or more persons related blood,marriage
or adoption reside together


 The members of the most basic social group



 A family is differentiated from household



 Three types of families-married

couple,nuclear family and extended family

 Functions of the family:
 1, Economic well being-Economic security to
the family members


 The head of the family or senior male

members of the family support
economically
 The wife and other female senior members
are homemakers and support children
 The recent trend when more no of wives are
working,home responsibilities are shared
 Children from poor families assist their
parents and grand parents in their trade
  2, Emotional support- Another important
function; to provide emotional and
therapeutic support to its members


 Support from the family for personal and

social problems and contributes an initial
training


 In the contrary in western countries because

such support is not available they turn to
educationalists and psychologists



 Suitable lifestyles-Establishment of suitable
life styles based on life priorities


 Spouses determine the importance placed on

career, education, reading habits, food,
habits, entertainment and recreation


 Life style commitments including the

allocation of time influence consumption
patterns
 Child hood socialisation-The socialisation of
family members especially young children
is the central function of family


 The family imparts training for children how

to behave with others and to maintain
dress sense food habits and grooming


 Habits are developed directly by instructions

and indirectly by observing
 Decision making of different family members-


 A family is patriarchal in which case the father

or husband is the dominant member who
takes the purchase decision


 In matriarchal family mother or wife is the

dominant member of the family


 In equalitarian family,husband and wife both

share some what equally in decision
making
  Dynamics of husband/wife in decision
making-


 Because the married couple is the basic

decision making unit its important for
marketers to understand the relative
strengths of husband and wife influence on
family purchase decisions


 Studies found that the influence of husband

and wife in family is quite fluid and likely to
shift,depending on specific product or
service

  All the factors are also mediated by changing
lifestyles, particularly the increasing the
number of working wives


 Now most of the decisions are taken jointly by

husband and wife


i,Product and service variation-The



purchasing decisions depends on the products

or service to be purchased for eg:Purchase of
an automobile is husband dominated while food
and financial decisions is wife dominated
 ii,Variation by family role structure orientation-


 Studies reveal that the family orientation

regarding spouses role play a key factor in
family consumption decisions

 In modern families decisions are equally
distributed between spouses and there is
increased interaction for decisions

 Family role in financial management is a function
related to the members attitude and education

 Studies say in developing economies the decisions
are husband driven where as in developed it’s a
joint decision
iii,Variation by stage in decision making


process-


 The role of husband and wife differs in different

stages of decision making process

 In the three stages of decision making model
wives play a major role in purchasing products

 However the husband participates in all stages of
decision making if product is high priced and
technically complex

 For eg:purchase of a washing machine,the need
generation and information is by wives but final
decision is joint
 iv,Variation by product features-


 Marketers need to examine husband/wife

decision making in terms of product
attributes

 Determination of brands in automobile and
television is husband dominated whereas
washing machine is wife dominated and
others are jointly decided

 Its unwise to generalise relative influences of
spouses from one product to another



2,Decision by children-


 Children exert influence on their families in

terms of family's purchase decisions


 Older chlidren participate more actively in

each stages of purchasing activity


 The parent child realationship should be

viewed as influence vs yield
 Children and television viewing-

 Children with more media exposure tend to
recall more advertisements

 Parents with good socio-economic status are
concerned about the food and nutritional
habits whereas poor people are bothered
about family conflicts

 Teenagers influence family decision making
in a big way
 Family life cycle

 The concept of FLC has proven valuable for

marketers especially for segmentation

 Behavioral scientists particularly family
sociologists have utilised the concept of FLC

 The intention is to classify family units in to
significant grouping

 The FLC refers to the progression of stages
through which individuals and families
proceed over time

 Bachelorhood-is the first stage of FLC is
bachelor hood where a single male or
female establishes their house hold apart
from parents


 Many people in this group may be working

and others students


 The income of the member is relatively less

but still they have good disposable income
to lead a lavish lifestyle
 Marketers who are engaged in travel and deal
with housing development,health clubs etc
find this FLC stage as a lucrative market for
their products and services


 Its easy to reach this market segment through

some special interest publications
 Many individuals after completing there
college start search for a career or job
training
 As soon as He or she is engaged for marriage it
throws out a different market opportunity for
bridal dresses,jewlerry and honey moon
packages
 Honeymooners-This stage starts immediately
after marriage vows are taken and
continues till the arrival of the first child


 This group is financially well off as both

spouses are earning


 Because they have combined income to

spend,they often carry a pleasure seeking
lifestyle similar to singles

 In addition to pleasure seeking jointly honey
mooners have considerable start up
expenses in establishing a new home


 They are a very good target market for home

appliances and other furnishings and
durables


 These types of families have the highest

scope of marketers and are having the
highest purchase rate.
 Parenthood-The honey moon stage is over as
soon as the first child takes birth


 This stage is called parenthood stage and is

extended for over 20 years


 Because of its long duration its sensible to

divide it in to shorter phases like pre-school
phase,elementary school phase,high school
phase and the college phase

 The lifestyle of the young couple also
change,money spent on furnishing,dining
and vacations now center on babys needs


 An increase in the number of births also

increases the responsibilities of the young
couple


 The parents are interested in new products

and susceptible to things they see
advertised
 Post parenthood-In post parenthood stage
children leave their parents and old spouses
now live together


 For the female spouse its time furthering her

education or reentering in to job or to seek
new interests


 For male spouse its time to indulge in new

hobbies,its time for travel and entertainment
for both and also refurnishing their homes


 Their purchasing power tends to increase at

this stage due to high disposable income
 Dissolution-This stage starts with the death
of one spouse,if the surviving spouse is
financially well off the purchasing power
is high


 They tend to spend more on

travel,recreation and health oriented
items


 Marketers find a rewarding segment to

target constituting trips,insurance and
social activities