CONSUMER DECISION MAKING PROCESS

1. Consumer Decision
Making process
EVALUATION OF ALTERNATIVES

2. What Is Evaluation of alternatives?
 The process through which we compare and contrast
different solutions to the same marketplace problem.
 It is the third step in the consumer decision-making process.
 Let's say a consumer is evaluating the attributes of a groups of
computers. They have identified four attributes: performance, design,
price, and value. During the evaluation the consumer will place
different levels of importance with each attribute based of what is
most important to them.
 During this stage consumers usually compare products based on
their various feature and benefits using the information from
pervious stage

3.  The consumer will "evaluate" each brand and form beliefs on
how each brand rates on each attribute. The consumer may
turn to friends and family, consult consumer reviews, or discuss
their situation with sales people during the Information Search.
 During this stage consumers usually compare products based
on their various feature and benefits using the information
from pervious stage.
 there are several processes at work inside the consumer's mind,
forming beliefs and attitudes about all of the products to
choose from.

4. Consumer evaluation sets
 The brands you thought of as potential solutions for a problem
are known as the awareness set.
 The alternatives actively considered during a consumer’s choice
process are his or her evoked set or consideration set. The
evoked set comprises those products already in memory (the
retrieval set), plus those prominent in the retail environment
 An evoked set is those brands or products one will evaluate
for the solution of a particular consumer problem. It is
important to note that the evoked set or consideration set will
vary depending on the usage situation

5. Consumer evaluation sets
 The brand you found completely unworthy of further
consideration is a member of what is called the inept set.
Brands in the inept set are actively disliked or avoided by the
consumer. Positive information about these brands is not likely
to be processed even if it is readily available.
 Brands of which you were aware but were basically indifferent
toward are composed of what is known as an inert set.
Consumers will generally accept favorable information about
brands in the inert set, although they do not seek out such
information.

6. Alternative Characteristics
To choose among the brands in the evoked set, the
consumer compares them on the relevant evaluative
criteria. This process requires the consumer to
gather information about each brand on each
pertinent evaluative criterion.
Consumers engage in internal and external search for
(1) appropriate evaluative criteria, (2) the existence of
potential solutions, and (3) the characteristics of
potential solutions

7. Evaluative criteria
 Evaluative criteria are the dimensions used to judge
the merits of competing options. In comparing
alternative products using any number of criteria,
ranging from very functional attributes to
experiential ones.
 Typically, consumers use from four to six criteria.
 The more important the purchase and/or the greater
experience a consumer has with the product class,
the greater the number of criteria used.
 Criteria may be used in combination.

8. Evaluative criteria
 Another important point is that criteria on which products differ from
one another carry more weight in the decision process than do those
where the alternatives are similar.
 The attributes actually used to differentiate among choices are
determinant attributes.
 The decision about which attributes to use is the result of procedural
learning, in which a person undergoes a series of cognitive steps before
making a choice. These steps include identifying important attributes,
remembering whether competing brands differ on those attributes, and so
on. In order for a marketer to recommend a new decision criterion
effectively, his or her communication should convey three pieces of
information:

9. Evaluative criteria
 It should point out that there are significant differences among
brands on the attribute.
 It should supply the consumer with a decision-making rule,
such as if (deciding among competing brands), then ... (use the
attribute as a criterion).
 It should convey a rule that can be easily integrated with how
the person has made this decision in the past. Otherwise, the
recommendation is likely to be ignored because it requires too
much mental work

10. Country of Origin, Price, and
Brand, as Evaluative Criteria
 Country of origin is used to signal product quality. Ex
Peoples May have negative perception about china
products than the Germans products.
 Use of price as criterion varies across product categories:
ex Peoples may have a perception that as products with
low price with low quality.
 Brand reputation
 Brand may be viewed as an indicator of quality and/or
consistency of satisfaction - lessening risk. Like adidas shoe Nike
and so on

11. Choosing familiar brand names: loyalty
or habit?
 Branding is a marketing strategy that often functions as a heuristic.
People form preferences for a favorite brand, and then they literally may
never change their minds in the course of a lifetime
 Consumer inertia: the tendency to buy a brand out of habit merely
because it requires less effort: examples..
Customer is too busy to check out your shop
Customer may visit the store but find no suitable customer service
She wants to buy online but website is too badly designed and
takes a lot of time to load.
 Brand loyalty: repeat purchasing behavior that reflects a conscious
decision to continue buying the same brand

12. Decision Heuristics
 Mental rules of thumb or shortcuts that help consumers reach decisions quickly and
efficiently.
 Especially where limited problem-solving occurs prior to making a choice, consumers
often fall back on heuristics, or mental rules-of-thumb that lead to a speedy decision.
 Examples:
 Price: “the higher the price the better the quality”
 Brand reputation: if it’s brand X, it must be good (or bad)
 Key product features: if a used car has a clean interior, a buyer may also infer a mechanically
sound vehicle.

13. Decision rules
 How consumers evaluate and choose products and services in
different buying situations.
 Rules are used consciously or unconsciously
 Cognitive decision-making models describe how consumers
systematically use information about attributes to reach a
decision. Researchers also recognize that consumers may make
decisions on the basis of feelings or emotions, using affective
decision-making models. Therefore, marketers need to know
how consumers make choices when the decision is either
cognitive or more emotional in nature.

14. Cognitive models describe the processes by
which consumers combine information about
attributes to reach a decision in a rational,
systematic manner. Two types of cognitive
models are (1) compensatory versus no
compensatory and (2) brand versus attribute

15. Compensatory model
 It is a mental cost-benefit analysis model in which
negative features can be compensated for by positive
ones.
 With a compensatory model, consumers evaluate how
good each of the attributes of the brands in their
consideration set is (i.e., they make judgments about
goodness and badness) and weight them in terms of
how important the attributes are to their decisions

16. Types of compensatory rules
 Simple additive: total scores on all evaluative criteria for each alternative
and the highest score wins (assumes all criteria of equal importance
 Weighted additive: assign relative weight to each criterion based on
perceived importance and then multiply the score by the relative weight to
arrive at a weighted score, sum scores, highest weighted score wins

17. No compensatory model
 Is simple decision model in which negative information leads to
rejection of the option
 With a no compensatory model, consumers use negative
information to evaluate brands and immediately eliminate from
the consideration set those that are inadequate on any one or
more important attributes
 No compensatory models require less cognitive effort than
compensatory models do because consumers set up cutoff
levels for each attribute and reject any brand with attribute
rankings below the cutoff.

18. Types of non compensatory model
 Conjunctive model - A non-compensatory model that sets minimum
cutoffs to reject “bad” options
 Disjunctive model - A non compensatory model that sets acceptable
cutoffs to find options that are “good.” Meet minimum “in” do not “out
 Lexicographic: rank each of the evaluative criteria in order of importance;
compare alternatives on most important with highest score winning; if tie
for high score those tied evaluated on second most important criterion,
etc., until “winner” is found

19. Types of Cognitive
Choice Models

20. Decisions Based on Brands
 In making a decision, consumers may evaluate one
brand at a time. Brand processing is evaluating one
brand at a time.
 Much research has focused on brand-based
compensatory models, also called multi attribute
expectancy-value models
 Note that when considering multiple attributes,
consumers tend to give more weight to those that are
compatible with their goals. Conjunctive model and
Disjunctive model

21. Decisions Based on Product Attributes
 Attribute processing occurs when consumers compare across brands one
attribute at a time, such as comparing each brand on price
 Additive difference model - Compensatory model in which brands are
compared by attribute, two brands at a time.
 Lexicographic model - A non-compensatory model that compares brands
by attributes, one at a time in order of importance.
 Elimination-by-aspects model - Similar to the lexicographic model but
adds the notion of acceptable cutoffs.
 Consumers first order attributes in terms of importance and then compare
options on the most important attribute.

22. Decisions Based on Gains and Losses
 Research shows that the decisions consumers
make also depend on whether the consumer is
motivated to seek gains or to avoid losses.
According to prospect theory, losses loom
larger than gains for consumers even when the
two outcomes are of the same magnitude
 This has been called the endowment effect
because ownership increases the value (and
loss) associated with an item

23. High Effort Affective Decisions
 With affective decision making, consumers make a decision
because the choice feels right rather than because they have
made a detailed, systematic evaluation of offerings
 Appraisals and Feelings
 Appraisal theory examines how our emotions are
determined by the way that we think about or
“appraise” the situation. This theory also explains
how and why certain emotions can affect future
judgments and choices. People who are fearful tend
to see more risk in new situations than do people
who are angry,

24.  Affective Forecasts and Choices -Consumers’
predictions of what they will feel in the future
affective forecasting—can influence the
choices they make today
 Affective forecasting occurs when consumers
try to predict how they will feel in a future
consumption situation. Specifically, they try to
predict what feelings they will have, how
strongly these feelings will be, and how long
the feelings will last.

25.  Imagery
 Imagery plays a key role in emotional decision
making. Consumers can attempt to imagine
themselves consuming the product or service and
can use any emotions they experience as input for
the decision
 Adding information actually makes imagery
processing easier because more information makes it
easier for consumers to form an accurate image
(whereas it may lead to information overload under
cognitive processing)

26. What affects high effort decisions?
 Consumer Characteristics
 Characteristics associated with consumers—such as
their expertise, mood, extremeness aversion, time
pressure, and metacognitive experiences—can affect
the decisions they make.
 Extremeness aversion -Options that are extreme on
some attributes are less attractive than those with a
moderate level of those attributes.

27. Compromise effect - When a brand gains
share it is seen as an intermediate or
compromise rather than an extreme
option.
Attribute balancing -Picking a brand
because it scores equally well on certain
attributes rather than faring unequally on
these attributes.
Metacognitive experiences - How the
information is processed beyond the
content of the decision

28.  Characteristics of the Decision
 In addition to consumer characteristics,
decision characteristics can affect how
consumers make their choices. Two decision
characteristics of particular note are the
availability of information on which to base a
decision and the presence of trivial attributes.

29.  Group Context
 Finally, consumers’ decisions can be affected by the
presence of a group, such as when a group of people
is dining out and each member is deciding what to
order.
 As each group member makes a decision in turn, he
or she attempts to balance two sets of goals: (1)
goals that are attained by the individual’s action
alone (individual alone) and (2) goals that are
achieved depending on the actions of both the
individual and the group (individual group).

30.  In a group, consumers face three types of individual-group
goals,
 Self-presentation. Consumers seek to convey a certain image
through the decisions they make in a group context.
 Minimizing regret. Consumers who are risk averse and want
to minimize regret will tend to make choices that are similar to
those made by the rest of the group, leading to uniformity at
the group level
 Information gathering. Consumers can learn more about the
different choices each has made through interaction with
other group members.

31. GOAL
INDIVIDUAL
ALONE
NO
GROUP
EFFECT
INDIVIDUAL
GRUOP
SELF
PRESENTATION
GROUP
VARITY &
UNIFORMITY
MINIMIZE
REGERET
UNIFORMI
TY
INFORMATION
GATHERING
GROUP
VARIETY

32. Post Purchase Decisions