Consumer decision making involves multiple stages and is influenced by both internal and external factors. The stages typically include problem recognition, information search, evaluation of alternatives, and product choice. Consumers draw on their beliefs, personality, attitudes, memories, and experiences during the decision making process. External influences like friends, salespeople, and media can also impact decisions and introduce uncertainty. While some argue consumers make choices randomly, there is evidence people generally follow a decision making process influenced by cognitive, behavioral, and social perspectives.

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Decision Making
By Christian Dy

2. +
Introduction
 (Q20) Some analysts argue that consumers really do not
pursue any kind of decision process but make their selections
more or less randomly without any apparent reasoning. What is
your position on this issue? Give examples.

3. +
Contents
 Stages In Consumer Decision Making
 Perspectives of Consumer Making
 Biases Accounting: Biases in the Decision-Making Process
 Conclusion

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Problem
Recognition
Information
Search
Evaluation Of
Alternatives
Product
Choice
Beliefs, Personality,
Attitudes,
Memory,
Experiences
DMU
• Decision
Making Unit
DMP
• Decision
Making Process
DMD
• Decision
Making Difficulty
Uncertainty
External
Influences
Friends
Sales
People
Media
And tell OthersComplainBad -SatisfactionGood-
Consumer Behaviour, Ray
Wright, tenth edition, Page
30, Figure 1.5

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Stages in Consumer Decision
Making Process
Problem
Recognition
Information
Search
Evaluation Of
Alternatives
Product
Choice
A need has to be filled or a
problem has arisen
Do market research on
relevant information
towards your problem
Consumers compare and
contrast products on the
market
Consumer chooses one
which sits above the rest
Consumer Hyperchoice
“Condition in which the large
number of available options forces
us to make repeated choices that
may drain psychological energy
while it saps our abilities to make
smart decisions.” (Solomon, Tenth
Edition)
DMP
•Decision Making
Process
Overview

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Decision Making Unit (DMU)
 The concept that one, two or more people may be involved in
the purchase of a product or service, and that the customer
might be different from the consumer
 Usually the more complex the purchase the more people will be
involved in the buying process.
DMU
•Decision Making
Unit

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Example of DMU,
• Suggester
• Father And MotherS
• Purchaser
• UncleP
• Advisor
• Sales Advisor,A
• Decision-Maker
• Father, Mother and Grand fatherD
• End-User
• GrandfatherE
Table 1.1 (Consumer Behaviour, Ray Wright,
Chapter 1, Page 26)
Example of DMU in
terms of
purchasing for a
family's grandfather

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Decision-Making Difficulty (DMD)
 Extensive Problem Solving (High Levels)
- When consumers have no established criteria for evaluation a product
category or specific brands in that category or have not narrowed the
number of brands they will consider to a manageable subset.
- Occurs when the decision we have to make relates to our self concept.
- Collect as much information as possible from both our internal search and
external search.
- Occurs when buying products that are expensive or we do not buy on a
regular basis
- E.G. investing into a business, trading shares, buying a house, buying a
car.
DMD
•Decision Making
Difficulty

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 Limited Problem Solving (Medium Levels)
-Consumers have already established the basic criteria for
evaluating product category and various brands in the category.
- Have not fully established preferences concerning a select group
of brands
-Customer/Consumer may have a set of guidelines or decision rules
in place rater than having to start a search all over again.
-This level of problem solving occurs when we are deciding whether
to buy an updated version of a product we already have or replacing
old items we have purchased before
-Buying an updated phone, TV, games console, lamp
Decision-Making Difficulty (DMD)
DMD
•Decision Making
Difficulty

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 Routinised response behavior/Habitual Decision Making (Small levels)
- Consumers have experience with the product category and have a well-
established set of criteria with which to evaluate the brands they are
considering.
- Consumers make choices with little or no conscious effort.
- As they are routinised we process our decision making habits
automatically.
May be seen as dangerous it does make sense as our habitual, repetitive
behavior minimises time and energy spent on mundane purchase decisions.
-E.g. Grocery Shopping, Filing up Car, Buying Drugs if we have a long-
lasting illness.
Decision-Making Difficulty (DMD)
DMD
•Decision Making
Difficulty

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Unfamiliar Product Class
and Brands
Familiar Product Class and
Brands
Continuum of Buying Decision
Behavior
Routine
Response
Behaviour
Limited
Problem
Solving
Extensive
Problem
Solving
Infrequent PurchasingFrequent Purchasing
Low-Cost Products More Expensive Products
Low Consumer
Involvement
High Consumer
Involvment
Little Thought, Search or
Time given to Purchase
Extensive Thought, Search and Time given to
purchase
Figure 8.2 (Solomon, tenth edition, Section 3,
Chapter 8, Page 322)

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Internal Influence
 Memory
 Experiences
 Beliefs
 Attitudes
 Personality
Beliefs, Personality,
Attitudes,
Memory,
Experiences

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External Influences
 Friends
 Sales People
 Media
 External Influences can cause uncertainty
External
Influences
Friends
Sales
People
Media

14. + Good- Satisfaction
And tell OthersComplainBad -
Satisfaction
 Good
-Repeat Purchase
-Word of Mouth
-Perceptions will be positive
 Bad
-Complain
-Perceptions will be negative
-No repeat purchase

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Problem
Recognition
Information
Search
Evaluation Of
Alternatives
Product
Choice
Beliefs, Personality,
Attitudes,
Memory,
Experiences
DMU
•Decision Making
Unit
DMP
•Decision Making
Process
DMD
•Decision Making
Difficulty
Uncertainty
External
Influences
Friends
Sales
People
Media
And tell OthersComplainBad -SatisfactionGood-
Consumer Behaviour, Ray
Wright, tenth edition, Page
30, Figure 1.5

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Perspectives
On Decision
Making
Cognitive
Behavioral
RationalPurchase
Momentum

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Perspectives on Decision Making
 Cognitive processing style- a predisposition to process
information. Some of us tend to have a rational system of
cognition that processes information analytically and
sequentially using roles of logic, while others rely on an
experiential system of cognition that processes more holistically
and in parallel.
 Behavioral influence perspective- The view that consumer
decisions are learned responses to environmental cues.

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Perspectives on Decision Making
 Rational Perspective- A view of the consumer as a careful,
analytical decision maker who tries to maximize utility in
purchase decisions.
 Purchase Momentum- Initial impulses to buy in order to satisfy
our needs increase the likelihood that we will buy even more.
 Experimental perspective- an approach stressing the Gestalt or
totality of the product or service experience, focusing on
consumer’s affective responses in the marketplace

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Biases Accounting: Biases in the
Decision-Making Process
 Mental Accounting- Principle that states that decisions are
influenced by the way a problem is posed (Framing) i.e. in
terms of gains or losses influences our decisions.
 Behavioral Economics- The study of the behavioral
determinants of economic decisions.
-Kahneman gave an example of one type of framing called
anchoring. Refers to the fact that when people are given a
number, they tend to use that number as the standard for future
judgments.

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Hyperopia
 Hyperopia- The medical term for people who have farsighted
vision, describes people who are so obsessed with preparing
for the future they can’t enjoy the present.
- College students participated in a study in which they reported
that they regretted not working, studying, or saving money during
their winter breaks.
- When asked about how they will feel about this break a year
from now, their biggest regrets were that they didn’t have enough
fun or travel enough.

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Prospect Theory
 Prospect Theory- A descriptive model of how people make
choices.
 Option 1- You’re given £30 and a chance to flip a coin: Heads
you win £9, tails you lose £9
 Option 2- You get £30 outright or you accept a coin flip that will
win you either £39 or £21

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 70 per cent of those who got option 1 chose to gamble,
compared to only 43 per cent who got option 2
 We are more willing to play with other peoples resources than
our own and value money differently depending on its source
 Another example could be when people get large sums of
bonuses. More likely to spend bonus rather than initial savings
or salary/wages.

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Conclusion
 There is a buying process which consumers use and there is
research which gives us understanding to how consumers
decide on products in which they want to buy.
 Rather than some analysts that believe that there isn't any
decision making when buying a product/service there are
mental processes in which people do on a daily basis which
help them understand what they need.
 As discussed there are a variety of theories in which it helps
marketers understand how consumers process there decisions.
Personally I believe that the perspective which consumers are
most dependent on are the social factor and economic factor in
todays society.

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References
 Michael R. Solomon,2013, Consumer Behaviour, Tenth Edition, Other
Edition, Pearson, Section 3, Chapter 9
 Leon G. Schiffman, Leslie Lazar Kanuk and Havard Hansen,2012,
Consumer Behaviour, Second Edition, Other Edition, Pearson,
Chapter 4
 Ray Wright,2006, Consumer Behaviour, First Edition, Thomson,
Chapter 1
 Consumer Decision making process. - YouTube. 2013. Consumer
Decision making process. - YouTube. [ONLINE] Available at:
http://www.youtube.com/watch?v=ud00Xa3tth4. [Accessed 20
November 2013].
 Paul A. Pellémans, 1971, European Journal Of Marketing, Research
Paper, 14, Vol. 5, ISSN: 0309-0566

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Thank You For listening