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Consumer Decision Making Process
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- 2. Contents • Introduction • FiveFactors Influencing Decision • Levels of Consumer Decision Making • Types of Consumer Buying Decisions • Consumer Decision-Making Process
- 3. Introduction • The purchaseis only the visible part of a more complex decision process created by the consumer for each buying decision he makes • But what happens before and after this purchase? • What are the factors influencing the choice of product purchased by the consumer? • Let’s focus on the Consumer Buying Decision Process and the stages that lead to purchase a new product
- 4. Five factors influencing decision 1.Level of consumer involvement 2. Length of time to make decision 3. Cost of good or service 4. Degree of information search 5. Number of alternatives considered
- 5. Levels of ConsumerDecision Making • Not all consumer decisions receive or require the same amount of effort in the information search • Researchers have identified three specific levels of consumer decision making • Extensive Problem Solving; • Limited Problem Solving; and • Routinized Response Behavior
- 6. Types of ConsumerBuying Decisions Routine Response Behavior Limited Decision Making Extensive Decision Making Less Involvement More Involvement
- 7. Extensive Problem Solving •When consumers have no established criteria for evaluating a product, or have not narrowed their choices, then they are in extensive problem solving. • 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. • Example: used while buying expensive, important, or technically complicated product or services
- 8. Limited Problem Solving •At this level, consumers have already established the basic criteria for evaluating the product category but haven’t established preferred categories. • Their search for additional information is more like *fine-tuning*; they must gather additional brand information to discriminate among the various brands. • Example: Usually used when purchasing a new, updated version of something. Replacing something old with something new.
- 9. Routinized Response Behavior • Atthis level, consumers have some experience with the product category and a well-established set of criteria with which to evaluate the brands they are considering. • They may search for a small amount of additional information. • Routinized response behavior implies little need for additional information. • Example: Day to day decisions.
- 10. Consumer Decision-Making Process Need Recognition InformationSearch Evaluation of Alternatives Purchase Post-purchase Behavior Cultural, Social, Individual, and Psychologica l Factors affect all steps
- 11. Consumer Profile • Middleaged man • Lives in Delhi • Expected monthly income 35000 • Been Driving Tata Indigo Diesel for 4 years • Daily drives at least 25 km. • Faces parking problem at workplace.
- 12. Need Recognition • Recognitionof a need occurs when a consumer is faced with a problem. • Among consumers there seem to be two different problem recognition styles. • Actual state types —consumers who perceive that they have a problem when a product fails to perform satisfactorily. • Desired state types —the desire for something new may trigger the decision process.
- 13. Need Recognition • FuelEfficient • Less maintenance • Good After Sales Service • More Space Internally • Price range 4,00,000-5,00,000 • Convenience for servicing • Safety • Comfort
- 14. Pre-purchase Information Search •Internal InformationSearch • Recall information in memory •External Information search • Seek information in outside environment • Non-marketing controlled • Marketing controlled
- 15. Sources of Information •Marketer Dominated • Advertising • Salespeople • Infomercials • Websites • Point-of-sales Materials • Non-Marketer Dominated Stimuli • Friends • Family • Opinion Leaders • Media
- 16. Factors the arelikely to increase pre-purchase search 1. Product factors 2. Situational factors • Experience • Social acceptability • Value-related considerations 3. Consumer factors • Demographic characteristics • Personality
- 17. Information Search • Internal: Memory and Experience • Friends and Family, • Magazines and Media • Respective Company sites • Zig wheels • Carwale.com • Autos. Max about.com • Auto Car India.com • Test Drives
- 18. Evaluating Alternatives •Determine criteriato be used for evaluation of products •Assess the relative importance of the each criteria •Evaluate each alternative based on the identified criteria
- 19. Evaluation of Alternatives •Evaluationof Products •Analyze product attributes •Use cut-off criteria •Rank attributes by importance
- 20. Evaluation of Alternatives •When evaluating potential alternatives, consumers tend to use two types of information: • A “list” of brands (the evoked set). • The criteria they will use to evaluate each brand. • The evoked set refers to the specific brands the consumer considers in making a purchase in a particular product category. • The inept set consists of brands the consumer excludes from purchase consideration as unacceptable. • The inert set is those brands to which the consumer is indifferent because they are perceived as having no advantage.
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- 22. Evaluation of Alternatives •Based on different parameters, many cars were evaluated some are: • Ford Figo • Chevrolet Beat • Maruti A-Star, Ritz, Swift, Wagon-R • Fiat Punto • Hyundai i 10
- 23. Purchase To buy ornot to buy