Consumer Decision Making Process

Consumer Decision Making Process

Consumer decision making process and consumption process of products or services always take place in the context of some specific situation. From a marketers point of view it is extremely important to understand how situations and internal and external sources of influence affect the purchase decision process. Depending on the set of circumstances, consumers’ behaviour may take any number of directions.

The model takes into account some variables that affect the purchase decision.

• Psychological factors
• Sociological factor
• Lifestyles factor
• Norm factor
• Value factor
• Reference group
• Family influences

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Model of Consumer Decision Making

1. Decision Making Inputs
2. Consumer Decision Making Process
3. Decision Making Output

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Decision Making Inputs

The input component of consumer decision-making model draws upon external influences that serve as sources of information about a particular product and influences a consumer’s product related value and behavior.

Marketers need to know where consumer spend his/her time and select appropriate communication channel to target the consumer and deliver the related information.

1. Marketing inputs
2. Socio-cultural inputs
3. Communication inputs

Marketing inputs

The firm’s marketing activities constitute a direct attempt to reach, inform and persuade consumers to buy and use its products. This input to the consumer’s decision-making process takes the form of specific marketing-mix strategies which consist of the product itself (including its package, size and guarantees), promotion, mass media advertising, personal selling and other promotional efforts, pricing policy and the selection of distribution channels to move the product from the manufacturers to the consumers.

Socio-cultural inputs

The socio-cultural environment inputs consist of a wide range of non-commercial influences e.g. the comments of friends, an editorial in the newspaper/ paper, usage by a family member or an article on consumer reports.

The influences of social class, culture and subculture, though, less tangible are important input factors that are internalized and affect how consumers evaluate and ultimately adopt (or reject) products.

Communication inputs

These are a mechanism that delivers the marketing mix and socio culture influence to consumer. It includes word of mouth, advertising, Buzzing agents, customized messages, advice, recommendations, and social media (owned, self-generated or paid).

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Consumer Decision Making Process

The process component of the model is concerned with how consumers make decision. To understand this process, the influence of the learning, personality and attitudes must be considered.

The psychological field represents the internal influences that affect the consumer’s decision-making process, (what they need or what, their awareness of various product choices, their information gathering activities, and their evaluations of alternatives)

The act of making a consumer decision consists of three stages which are:

• Need recognition
• Pre-purchase search
• Evaluation of alternatives

Need recognition

The recognition of a need is likely to occur when a consumer is faced with a problem. For example, consider a customer who is looking for a motorbike. He thinks that he may be benefited by purchasing a high mileage and low maintenance bike that would incur him low running cost. This customer has recognized his need and knows the possible response.

There are two types of need recognition: actual state types and desired state type.

In former one consumer recognize need may be due to failure of existing product (touch screen of mobile is not responding promptly) or in a later case, a consumer has the desire to have a particular product and this may trigger the decision process (consumer want to purchase Apple i-phone).

Pre-purchase search

The Pre-purchase search begins when a consumer perceives a need that might be satisfied by the purchase and consumption of a product. The consumer usually searches his or her memory (the psychological field) before seeking out external sources of information regarding a given consumption related needs.

Past experience is considered an internal source of information. The greater his or her relevant past experience, the less external information the consumer is likely to need in order to reach a decision. Many consumers’ decisions are based on combinations of past experience (internal source), marketing and non commercial information (external sources).

Evaluation of alternatives

When evaluating potential alternatives, consumers tend to employ two different types of information.

• A list of brands, from which they plan to make their selection (evoked set).
• The criteria they will use to evaluate each brand. The evoked set is only a part or subset of all the brands of which the consumer is aware of making a selection from; a sample of all possible brands is a human characteristic that helps simplify the decision making process.

The criteria that consumers employ in evaluating the brands that constitute the evoked are usually expressed in terms of product attributes that are important to them.

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Decision Making Output

The output portion of the model is concerned with two closely associated kinds of post decision activity. They are:

• Purchase behavior
• Post-purchase evaluation.

Purchase behavior

Consumers make two types of purchase; Trial purchase and Repeat purchase

When consumer buys any product first time , it is called as Trial. Consumers try to evaluate the new brand and future repeat purchase would depend on perception of the consumer after using the product.

Trial purchase

A consumer purchases a product for the first time, and buys a smaller quantity than usual; such a purchase would be considered a trails. Thus, trial is exploratory phase of purchasing behavior in which consumers attempt to evaluate a product through direct use.

When consumers purchase a new brand about which they may be uncertain, they tend to purchase smaller quantities than they would if it were a familiar brand. When new brand in an established product category is found by trial to be much more satisfactorily better than other brands, consumers are likely to repeat the purchase.

Repeat purchase

Behavior is closely related to the concept of brand loyalty unlike trial in which the consumer uses the product on a small scale; a repeat purchase usually signifies that the product meets with the consumer’s approval and that the consumer is willing to use it again and in large qualities. Repeat purchase represents the brand loyalty.

Post-purchase evaluation

As consumer uses a product, particularly, during a trial purchase, they evaluate its performance in the light of their own expectations. For this reason, it is difficult to separate the trial of a product from its post purchase as the two go hand in hand.

An important component of post-purchase evaluation is the reduction of uncertainty or doubt that the consumer might have about the selection. Consumers, as part of their post-purchase analysis, try to reassure themselves that their choice was a wise one i.e. they attempt to reduce post-purchase cognitive dissonance.

The degree of post-purchase analysis that consumers undertake is likely to depend on the importance of the product decision and the experience acquired in using the product. If the product lives up to expectations they will buy again.

When consumer’s expectation matches the product performance then consumer feels neutral.

• Positive disconfirmation occurs when product performance exceeds the consumer expectation and consumer is satisfied.
• Negative disconfirmation occurs when consumer expectation exceeds the product performance and consumer is dissatisfied.

Cognitive dissonance occurs when consumer holds conflicting thoughts about a belief or an attitude. When cognitive dissonance occurs after the purchase, it is called post purchase dissonance. In this, consumer tries to reassure themselves that they have taken a wise decision.

In doing so, consumer may seek advertisement that support their choice and avoid those of competing brands. Consumer may try to persuade his/her peers to buy the same product or may meet with other satisfied consumers.

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Levels of Consumer Decision Making Process

The choices we make as consumers all have some kind of consequence, and some will say that when making a decision we are actually choosing between consequences, or outcomes. As such outcomes differ in their level of importance, not all consumer decision-making situations receive (or require) the same degree of information search.

As a rule of thumb, decisions can be grouped into these categories depending on the importance of the outcome, and thus the importance of not choosing the wrong alternative.

1. Extensive Problem Solving
2. Limited Problem Solving
3. Routinised Response Behaviour

Extensive Problem Solving

When consumers have no established criteria for evaluating a product category or specifi c brands in that category or have not narrowed the number of brands they will consider to a small, manageable subset, their decision-making efforts can be classified as extensive problem-solving.

At this level, the consumer needs a great deal of information to establish a set of criteria on which to judge specifi c brands and a correspondingly large amount of information concerning each of the brands to be considered.

Extensive problem-solving usually occurs when buying products that are expensive, important and technically complicated, and implies long time commitments (e.g. a car, an apartment, a high-definition television).

Limited Problem Solving

At the limited problem-solving level, consumers have already established the basic criteria for evaluating the product category and the various brands in the category. However, they have not fully established preferences concerning a select group of brands.

Their search for additional information is more like ‘fine-tuning’; they must gather additional brand information to discriminate among the various brands. This level of problem-solving commonly occurs when purchasing an updated version of a product the consumer has bought before, such as replacing a mobile phone with a new one, buying a food processor or replacing an old laptop with a new one

Routinised Response Behaviour

At this level, consumers have experience with the product category and a well-established set of criteria with which to evaluate the brands they are considering. In some situations, they may search for a small amount of additional information; in others, they simply review what they already know.

Buying a refill of laundry detergent, toothpaste or hand soap are all examples of products consumers purchase more or less based on routine.