Consumer Decision Making
Learning Objectives
1. To Understand What a Consumer Decision Is.
2. To Understand the Three Levels of Consumer
Decision Making.
3. To Understand Four Different Views or Models of
Consumer Decision Making.
4. To Understand the Need for Relationship Marketing.
What Would a Pet Owner Need to Know in Order to
Make a Decision About Buying Pet Insurance?
Do I Need It? How Do I Get More
Information?
Levels of Consumer Decision Making
• Extensive Problem Solving
– A lot of information needed
– Must establish a set of criteria for evaluation
• Limited Problem Solving
– Criteria for evaluation established
– Fine tuning with additional information
• Routinized Response Behavior
– Usually review what they already know
Types of Purchase or Consumption
Decision- Basic Purchase/ Consumption
Alternative 1 Alternative 2
• To purchase or consume a • Not to purchase or consume
product product
• To purchase or consume a • To purchase or consume a
specific brand another brand
• To purchase or consume a • To purchase or consume a
basic model luxury or status model
• To purchase or consume a • To purchase or consume
standard quantity more or less than a
• To purchase or consume an standard quantity
on sale brand • To purchase or consume a
non sale brand
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Types of Purchase or Consumption
Decision- Channel Purchase Decision
Alternative 1 Alternative 2
• To purchase from a specific • To purchase some other
type of store (Department type of store (Discount
Store) Store)
• To purchase in home (by • To purchase in store
phone, catalogs, internet) merchandise
• To purchase from a local • To purchase from a store
store requiring some travel
(outshopping)
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Types of Purchase or Consumption
Decision- Payment Purchase Decision
Alternative 1 Alternative 2
• To pay for the purchase with • To pay for the purchase with
cash credit card
• To pay the bill in full when it • To pay for the purchase in
arrives installments
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Models of Consumers: Four Views of Consumer
Decision Making
• An Economic View
• A Passive View
• A Cognitive View
• An Emotional View
An Economic View
• The consumer has often been characterized as
making rational decisions
• There is perfect competition and the
consumer makes rational decisions
• They are aware of all choices, can rank their
benefits, and can choose the best alternative
• Unfortunately for many, the perfect consumer
does not exist
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A Passive View
• The opposite of the economic view is the view
of the consumer as basically submissive to the
self-serving interests and promotional efforts
of marketers
• Consumers are perceived as impulsive and
irrational purchasers, ready to yield to the
arms and aims of marketers
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A Cognitive View
• This view portrays the consumer as a thinking
problem solver.
• The cognitive model focuses on the processes by
which consumers seek and evaluate information
about selected brands and retail outlets.
• Consumers are viewed as information processors,
and this leads to the formulation of preferences, and
ultimately, purchase intentions.
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An Emotional View
• Emotions are at the center in this model of
consumer decision making
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Consumer
Decision Making
Model
Process - Need Recognition
• Usually occurs when consumer has a
“problem”
• Need recognition styles
– Actual state: Consumers who perceive that they
have a problem when a product fails to perform
satisfactorily
– Desired state: The desire for something new may
trigger the decision process
Prepurchase Search
• Begins with internal search and then moves to
external search
• The impact of the Internet
• There are many factors that increase search
– Product factor
– Situational factors
– Consumer factors
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Search Regret
• Post search dissonance that result from an
unsuccessful pre purchase search
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Evaluation of Alternatives
• Evoked set
• Criteria used for evaluating brands
• Consumer decision rules
• Decisions by functionally illiterate population
• Going online for decision-making assistance
• Lifestyles as a consumer decision strategy
• Incomplete information
• Applying decision rules
• Series of decisions
• Decision rules and marketing strategy
Evoked Set
• Evoked Set refers to the specific brands the
consumer considers in making a purchase in a
particular product category
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The Evoked Set
Inept Set
• The Inept Set consists of brands the consumer
excludes from purchase consideration as
unacceptable.
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Inert Set
• The Inert Set is those brands to which the
consumer is indifferent because they are
perceived as having no advantage
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Issues in Alternative Evaluation
• Evoked Set
• Criteria used for evaluating brands
• Consumer decision rules and their application
• Decisions by functionally illiterate population
• Going online for decision-making assistance
• Lifestyles as a consumer decision strategy
• Incomplete information
• Applying Decision Rules
• Series of decisions
• Decision rules and marketing strategy
Consumer Decision Rules
• Consumer decision rules are referred to as
heuristics, decision strategies, and
information-processing strategies, and are
procedures used by consumers to facilitate
brand choices.
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Consumer Decision Rules
• Compensatory Decision Rules
– evaluates each brand in terms of each relevant
attribute and then selects the brand with the highest
weighted score.
• Noncompensatory Decision Rules
– positive evaluation of a brand attribute does not
compensate for a negative evaluation of the same
brand on some other attribute
– Conjunctive, disjunctive, or lexicographic
Compensatory
• These rules are also referred to as heuristics,
decision strategies, and information-
processing strategies.
• If they are compensatory, the consumer will
evaluate each attribute and add them up for
the brand.
• The belief is that the consumer will choose the
brand with the highest rating.
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Noncompensatory Decision
• The consumer does not balance positive
attributes against negative, but every attribute
must reach a minimum level or it will be
disqualified.
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Conjunctive
• The consumer will establish a minimally
acceptable cutoff point for each attribute
evaluated. Brands that fall below the cutoff
point on any one attribute are eliminated from
further consideration
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Disjunctive
• The consumer will establish a minimally
acceptable cutoff point for each relevant
product attribute
• In this case if a brand alternative meets or
exceeds the cutoff established for any one
attribute, however, it is accepted.
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Lexicographic
• The consumer first ranks the attributes in terms of
perceived relevance or importance
• The consumer then compares the various brand
alternatives in terms of the single attribute that is
considered most important.
• If one brand scores sufficiently high on this top-
ranked attribute, it is selected, and the process ends.
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Issues in Alternative Evaluation
• Evoked Set
• Criteria used for evaluating brands
• Consumer decision rules and their application
• Decisions by functionally illiterate population
• Going online for decision-making assistance
• Lifestyles as a consumer decision strategy
• Incomplete information
• Applying Decision Rules
• Series of decisions
• Decision rules and marketing strategy
Functionally Illiterate Consumer
• Functionally illiterate Consumer do make
decision differently
• The purchase decision based on single piece
of information
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Issues in Alternative Evaluation
• Evoked Set
• Criteria used for evaluating brands
• Consumer decision rules and their application
• Decisions by functionally illiterate population
• Going online for decision-making assistance
• Lifestyles as a consumer decision strategy
• Incomplete information
• Applying Decision Rules
• Series of decisions
• Decision rules and marketing strategy
Coping with Missing/Incomplete
Information
• Delay decision until missing information is
obtained
• Ignore missing information and use available
information
Issues in Alternative Evaluation
• Evoked set
• Criteria used for evaluating brands
• Consumer decision rules and their application
• Decisions by functionally illiterate population
• Going online for decision making assistance
• Lifestyles as a consumer decision strategy
• Incomplete information
• Applying Decision Rules
• Series of decisions
• Decision rules and marketing strategy
Output of Consumer Decision Making
• Purchase behavior
– Trial purchases
– Repeat purchases
– Long-term commitment
• Postpurchase
evaluation
Postpurchase Evaluation
• Actual Performance Matches Expectations
– Neutral Feeling
• Actual Performance Exceeds Expectations
– Positive Disconfirmation of Expectations
• Performance Is Below Expectations
– Negative Disconfirmation of Expectations
