Presentation of material on Consumer Decision-Making, this presentation is suitable for students and lecturers majoring in production management and marketing, industrial engineering etc

1. Consumer
Decision-Making
JERI OKTARI

2. WHAT IS A
DECISION?
Every day, each of us makes numerous
decisions concerning every aspect of our daily
lives.

3. Example:
When a person has a choice between making a purchase and not making a
purchase, a choice between brand X and brand Y, or a choice of spending time
doing A or B, that person is in a position to make a decision.
In the most general terms, a decision is the selection of an option from two or
more alternative choices.

4. Experimental research reveals that providing consumers with a choice when there
was originally none can be a very good business strategy, one that can
substantially increase sales.
Example:
when a direct-mail electrical appliance catalogue displayed two coffee-makers
instead of just one, the addition of the second coffee-maker for comparison seemed
to stimulate consumer evaluation that significantly increased the sales of the
original coffee maker.

5. Extensive
Problem-Solving
1 2 3
LEVEL OF CONSUMER DECISION-MAKING
Limited
Problem-Solving
Routinised
Response Behaviour

6. LEVEL OF
CONSUMER
DECISION-
MAKING
01 Extensive Problem-Solving
 When consumers have no established criteria for
evaluating a product category or specific brands.
 At This Level
 The consumer needs a great deal of information to
establish a set of criteria on which to judge
specific 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.
 Example: buy a car, an apartment

7. LEVEL OF
CONSUMER
DECISION-
MAKING
02 Limited problem-solving
 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.
 At This Level
 Their search for additional information is more
like ‘fi ne-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.
 Example: Replacing a mobile phone with a new
one, Replacing an old laptop with a new one.

8. LEVEL OF
CONSUMER
DECISION-
MAKING
03 Routinised response behaviour
 Consumers have experience with the product
category and a well-established set of criteria with
which to evaluate the brands they are considering.
 At This Level
 They may search for a small amount of additional
information; in others, they simply review what
they already know.
 Example: Buying a refill of laundry detergent,
toothpaste or hand soap are all examples of
products consumers purchase more or less based
on routine

9. Economic view
1 2 3
MODELS OF CONSUMERS: FOUR VIEWS OF
CONSUMER DECISION-MAKING
Passive view Emotional view
4
Cognitive view

10. ECONOMI VIEW
An economic view In the field of theoretical economics, which portrays a world of
perfect competition, the consumer has often been characterised as making rational
decisions.
This Model, To behave rationally in the economic sense, a consumer would have to :
1. be aware of all available product alternatives,
2. be capable of correctly ranking each alternative in terms of its benefits and
disadvantages, and
3. be able to identify the one best alternative.

11. PASSIVE VIEW
• economic view of consumers is the passive view that depicts the consumer as
basically submissive to the self-serving interests and promotional efforts of
marketers. In the passive view, consumers are perceived as impulsive and
irrational purchasers, ready to yield to the aims and into the arms of marketers.
• The principal limitation of the passive model is that it fails to recognize that the
consumer plays an equal, if not dominant, role in many buying situations –
sometimes by seeking information about product alternatives and selecting the
product that appears to offer the greatest satisfaction and at other times by
impulsively selecting a product that satisfies the mood or emotion of the moment.

12. EMOTIONAL VIEW
• The emotional or impulsive model of consumer decision-making, marketers
frequently prefer to think of consumers in terms of either economic or passive
models.
• Some emotional decisions are expressions like ‘you deserve it’ or ‘treat yourself ’.
For instance, many consumers buy designer-label clothing, not because they look
any better in it, but because status labels make them feel better.

13. COGNITIVE VIEW
• The cognitive, or problem-solving, view describes a consumer who falls
somewhere between the extremes of the economic and passive views, who does
not (or cannot) have total knowledge about available product alternatives and,
therefore, cannot make perfect decisions, but who nonetheless actively seeks
information and attempts to make satisfactory decisions.
• Consistent with the problem-solving view is the notion that a great deal of
consumer behaviour is goal directed. For example, a consumer might purchase a
computer in order to manage finances or look for a laundry detergent that will be
gentle on fabrics.

15. A MODEL OF
CONSUMER
DECISION-MAKING

16. CONSUMER GIFTING BEHAVIOUR
• In terms of both the amount of money spent each year and how they make givers
and receivers feel, gifts are a particularly interesting part of consumer behaviour.
Products and services chosen as gifts represent more than ordinary ‘everyday’
purchases. Because of their symbolic meaning, they are associated with such
important events as Mother’s Day, births and birthdays, engagements, weddings,
graduations and many other accomplishments and milestones.
• The model reveals the following five gifting subdivisions:
1. intergroup gifting,
2. intercategory gifting,
3. intragroup gifting,
4. interpersonal gifting, and
5. intrapersonal gifting.

18. BEYOND THE DECISION: CONSUMING
AND POSSESSING
• The experience of using products and services, as well as the sense of pleasure
derived from possessing, collecting or consuming ‘things’ and ‘experiences’
(mechanical watches, old fountain pens or a stamp collection) contribute to
consumer satisfaction and overall quality of life
• These consumption outcomes or experiences, in turn, affect consumers’ future
decision processes