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Cb unit-vii (consumer decision making process)
This document contains lecture slides from a course on consumer behavior taught at IILM Graduate School of Management. The slides cover various topics related to consumer decision making process including: - The different factors (cultural, social, individual, psychological) that influence consumer behavior and decision making. - Stages of consumer decision making process - need recognition, information search, evaluation of alternatives, purchase decision, and post-purchase behavior. - Concepts like evoked set, cognitive dissonance, and their impact on consumer decision making. - Differences in decision making for products with varying levels of consumer involvement. - Ways marketers can address post-purchase thoughts and behaviors like dissatisfaction or
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Cb unit-vii (consumer decision making process)
- 1. 07/04/15 1 By : Prof.Amit Kumar
- 2. 07/04/15 2 Course: ConsumerBehavior Unit-1 Consumer in the Marketplace Unit-2 Models of Consumer Behavior Unit-3 Cultural Influences on Consumer Decision making Unit-4 Sociological Influences on Consumer Decision making Unit-5 Personal / Individual Influences on Decision making Unit-6 Psychological Influences on Decision making Unit-7 Consumer Decision Making Process Unit-8 Consumer Influence & Diffusion of Innovation Consumer Behavior IILM-Graduate School of Management
- 3. 07/04/15 3 Consumer BehaviorConsumer Decision Making Process IILM-Graduate School of Management
- 4. 07/04/15 4 • Thinkof a recent important purchase– briefly draw a flowchart of the steps you recall moving through from the awareness of need to post purchase • What influenced you at each step? Consumer Behavior Consumer Decision Making Process IILM-Graduate School of Management
- 5. 07/04/15 5 Consumer Decision-MakingProcess Postpurchase Behavior Postpurchase Behavior PurchasePurchase Evaluation of Alternatives Evaluation of Alternatives Information SearchInformation Search Need RecognitionNeed Recognition Cultural, Social,Cultural, Social, Individual andIndividual and PsychologicalPsychological FactorsFactors affectaffect all stepsall steps Cultural, Social,Cultural, Social, Individual andIndividual and PsychologicalPsychological FactorsFactors affectaffect all stepsall steps Consumer Behavior Consumer Decision Making Process IILM-Graduate School of Management
- 6. 07/04/15 6 Complete modelof consumer behavior Stimuli (marketer dominated, other) External search Memory Internal search Exposure Attention Comprehension Acceptance Retention Search Need recognition Alternative evaluation Purchase Outcomes Dissatisfaction Satisfaction Individual differences • resources • motivation & involvement • knowledge • attitudes • personality, values, lifestyle Influences • culture • social class • family • situation Start Consumer Behavior Consumer Decision Making Process
- 7. 07/04/15 7 • Howdo you know when to shop? What are the triggers that initiate an awareness & search? • What are the internal & external sources of these triggers? Consumer Behavior Consumer Decision Making Process IILM-Graduate School of Management
- 8. 07/04/15 8 Consumer BehaviorConsumer Decision Making Process IILM-Graduate School of Management
- 9. 07/04/15 9 Need Recognition PreferredState Marketing helps consumers recognize (or create) an imbalance between present status and preferred state • When a current product isn’t performing properly • When the consumer is running out of an product • When another product seems superior to the one currently used Consumer Behavior Consumer Decision Making Process IILM-Graduate School of Management
- 10. 07/04/15 10 Information Search Aninternal search involves the scanning of one's memory to recall previous experiences or knowledge concerning solutions to the problem-- often sufficient for frequently purchased products. An external search may be necessary when past experience or knowledge is insufficient, the risk of making a wrong purchase decision is high, and/or the cost of gathering information is low. Personal sources (friends and family) Public sources (rating services like Consumer Reports) Marketer-dominated sources (advertising or sales people) The evoked set: a group of brands from which the buyer can choose Consumer Behavior Consumer Decision Making Process IILM-Graduate School of Management
- 11. 07/04/15 11 Information Search Asuccessful information search leaves a buyer with possible alternatives, the evoked set (A group of brands that a consumer is both aware of and willing to consider as a solution to a purchase) Consumer Behavior Consumer Decision Making Process IILM-Graduate School of Management
- 12. 07/04/15 12 • goback to your past purchase– what were the specific internal and external sources of information that influenced your decision? • how do you determine (and rate) the credibility of these sources? • what specific information influenced you? Consumer Behavior Consumer Decision Making Process IILM-Graduate School of Management
- 13. 07/04/15 13 Determinants ofExternal Search Consumer Behavior Consumer Decision Making Process IILM-Graduate School of Management
- 14. 07/04/15 14 Consumer Decision-MakingProcess Postpurchase Behavior Postpurchase Behavior PurchasePurchase Evaluation of Alternatives Evaluation of Alternatives Information SearchInformation Search Need RecognitionNeed Recognition Cultural, Social,Cultural, Social, Individual andIndividual and PsychologicalPsychological FactorsFactors affectaffect all stepsall steps Cultural, Social,Cultural, Social, Individual andIndividual and PsychologicalPsychological FactorsFactors affectaffect all stepsall steps Consumer Behavior Consumer Decision Making Process IILM-Graduate School of Management
- 15. 07/04/15 15 What NewCar Buyers Consider Important Consumer Behavior Consumer in Marketplace IILM-Graduate School of Management
- 16. 07/04/15 16 Evaluation ofalternatives 1. Consumer sees each product as a bundle of attributes with varying abilities for delivering the benefits. 2. Rank/weight attributes for each alternative. Assign percentage of importance. 3. Calculate Customer Values (CV) for each alternative. 4. If not satisfied with your choice then return to the search phase. Evaluation of Alternatives--need to establish criteria for evaluation. Expectancy-value model Consumer Behavior Consumer Decision Making Process IILM-Graduate School of Management
- 17. 07/04/15 17 Purchase Decision Purchasedecision--Choose buying alternative, includes product, Brand, Dealer, Purchasing amount, Timing, Method of Purchase etc. Product Choice Brand Choice Dealer Choice Purchase Amount Purchase Timing PURCHASE DECISION Payment Method Consumer Behavior Consumer Decision Making Process IILM-Graduate School of Management
- 18. 07/04/15 18 Consumer decisionmaking varies with the level of involvement in the purchasing decision • Extensive: problem solving occurs when buyers purchase more expensive, less frequently purchased products in an unfamiliar product category requiring information search & evaluation; may experience cognitive dissonance. • Limited: problem solving occurs when buyers are confronted with an unfamiliar brand in a familiar product category • Routine: response behavior occurs when buyers purchase low cost, low risk, brand loyal, frequently purchased, low personal identification or relevance, items with which they are familiar. Increase in Consumer evaluation processes Consumer Behavior Consumer Decision Making Process IILM-Graduate School of Management
- 19. 07/04/15 19 • quicklylist 10 items you have purchased in the past month • reexamine how long it took you to make a decision on each • why did such a difference in decision occur? Consumer Behavior Consumer Decision Making Process IILM-Graduate School of Management
- 20. 07/04/15 20 Factors affecting Consumerinvolvement • Previous experience: low level involvement • Interest: high involvement • Perceived risk of negative consequences: high involvement • Situation: low to high due to risk • Social visibility: involvement increases with product visibility • Offer extensive information on high involvement products • In-store promotion & placement is important for low involvement products • Linking low-involvement product to high-involvement issue can increase sales So… Consumer Behavior Consumer Decision Making Process IILM-Graduate School of Management
- 21. 07/04/15 21 Types ofconsumer involvement and decision making Routine Limited Extensive Involvement Short Low to moderate High Time Low Short to moderate Long Cost Short Low to moderate High Information Search Internal only Mostly internal Internal & external Number of alternatives one few many Consumer Behavior Consumer Decision Making Process IILM-Graduate School of Management
- 22. 07/04/15 22 • thinkof an important purchasing decision you have made • what are some of the thoughts you have had following your purchase? Any regrets? • what has influenced those thoughts? • how have you dealt with the discomfort? • how has the company anticipated or dealt with your discomfort? Consumer Behavior Consumer Decision Making Process IILM-Graduate School of Management
- 23. 07/04/15 23 Postpurchase Behavior Canminimize through: Effective Communication Follow-up Guarantees Warranties Underpromise & overdeliver Cognitive DissonanceCognitive Dissonance ?Did I make a good decision?Did I make a good decision? Did I buy the right product?Did I buy the right product? Did I get a good value?Did I get a good value? Consumer Behavior Consumer Decision Making Process IILM-Graduate School of Management
- 24. 07/04/15 24 Post purchaseBehavior Post-Purchase Evaluation Post purchase: Satisfaction or Dissatisfaction Post purchase Action: CRM programs designed to build long- term brand loyalty. Post purchase use & disposal: Marketer should also monitor how buyers use and dispose of the product. Cognitive Dissonance Is the anxiety that occurs when a customer has second thoughts immediately following a purchase. Can lead to customer complaints, brand switching, or discontinuing Can reduced by: Guarantees and trial, Customer follow-ups, Confirming information from other users. Consumer Behavior Consumer Decision Making Process IILM-Graduate School of Management
- 25. 07/04/15 25 Sour Grapes– astory of cognitive dissonance …after being unable to reach the grapes the fox said, “these grapes are probably sour, and if I had them I would not eat them.” --Aesop Consumer Behavior Consumer Decision Making Process IILM-Graduate School of Management
- 26. 07/04/15 26 Cognitive Dissonance •psychological discomfort caused by inconsistencies among a person’s beliefs, attitudes, and actions • varies in intensity based on importance of issue and degree of inconsistency • induces a “drive state” to avoid or reduce dissonance by changing beliefs, attitudes, or behaviors and thereby restore consistency Tendency to avoid information can be countered by eliciting interest, norm of fairness, or perceive usefulness of information Post-decision “buyer’s remorse” may be increased by importance or difficulty or irreversibility of decision Counter-attitudinal action, freely chosen with little incentive or justification, leads to attitude change (e.g., new product at special low price) Applications: Consumer Behavior Consumer Decision Making Process IILM-Graduate School of Management
- 27. 07/04/15 27 • thinkof an innovation in your field • describe different groups of employees in your organization who would respond early and favorably, as well as later and unfavorably • what are the differences between these groups? • how could you use this information to market the innovation to them more effectively? Consumer Behavior Consumer Decision Making Process IILM-Graduate School of Management
Editor's Notes
- #10 1st point..like I have inject printer…slow speed..lower quality..look for laser printer 2nd …like remote slide mover..as a lecturer..i found difficulty many of times while delivering lectures in the class.. 3rd… air conditioners gives better cooling than the cooler than the fans
- #12 Consumer rating org or similarly marketing research firm… Evoked set and considerations sets are same.. Consumer rating org..are the org which prevent custiomer from the fraud..they will rate the consumer electonices product, insurance product, helath care product and provide ranking. http://www.nfrc.org/ The largest consumer rating organization is the National Fenestration Rating Council (NFRC). fen·es·tra·tion (f n -str sh n). n. 1. The design and placement of windows in a building. 2. An opening in the surface of a structure, as in a membrane. ... Its aim is to protect consumers from fraud in window claims by the numerous different brands around. They do so by doing their own ratings on stuff such as the energy performance of the window and the solar heat gain co-efficient. Through this council, architects, builders and home consumers alike can compare between windows fairly. Mass media denotes a section of the media specifically designed to reach a large audience. The term was coined in the 1920s with the advent of nationwide radio networks, mass-circulation newspapers and magazines. However, some forms of mass media such as books and manuscripts had already been in use for centuries. Commercial software, a software that is licensed for a fee Commercial vehicle, a type of vehicle used for carrying goods or passengers Advertising is the act of delivering message for profit Advertising is a form of communication intended to persuade an audience (viewers, readers or listeners) to take some action. It includes the name of a product or service and how that product or service could benefit the consumer, to persuade potential customers to purchase or to consume that particular brand. Modern advertising developed with the rise of mass production in the late 19th and early 20th centuries
- #16 This survey done in indian market by McKinsely in 2007-08.. Just a guess…suppose
- #17 Find the attributes for the different products and services..in 4 member in a group…laptop..moblie…Ac cooler…house like duplex…credit cards…insurance product….holidays package….motor bike….water purifier…microwave……….