The document outlines the consumer decision-making process in four main stages: problem recognition, information search, evaluation of alternatives, and product choice. It categorizes consumer decisions into nominal, limited, and extended problem solving, which range from low involvement purchases to high risk and complex decisions. Various factors, including situational influences and personal motives, affect how consumers engage in shopping and ultimately make purchase decisions.

1. Consumer Decision Making
Process
Unit 3

2. Stages in Consumer Decision-Making

3. Case of Daniel
• Daniel’s case is the perceived need for a new TV
• His situation is similar to that encountered by
consumers virtually every day of their lives.
• He realizes that he wants to make a purchase,
and he goes through a series of steps in order
to make it. These steps can be described as:
(1) problem recognition
(2) information search,
(3) evaluation of alternatives, and
(4) product choice.

6. Types of consumer decisions

7. Types of Consumer Decisions
1. Nominal Decision Making/Habitual Decision
Making
• Nominal decisions occur when there is
very low involvement with the purchase
Information search is low (limited internal)
Risk is low
• These are products which are brought with greater
frequency like a toothpaste, shaving cream, blades,
cosmetics etc
• There is no dissonance and very limited evaluation

8. Limited Decision Making
• This is for the products which have a higher time,
risk and money involvement
• In this information search (internal and limited
external) takes place and the buyer wants to find
out a number of features, attributes and aspects
of the product before finally making a decision to
purchase
• The purchase is for products like – TV, computer,
machine, motor cycle etc
• In this there can be limited dissonance if the
product does not perform upto expectations

9. Extended Problem Solving
• In this category the risk involved is high, the
money involvement is much more
• The goods are not purchased frequently
• These involve a lot of information search and
greater physical activity for finding out about
the attributes of the products
• These items include a house, a motor car,
jewellery or something which is valued most

10. • Extended problem solving is carried out in the
following cases:
High priced products
Medical products associated with risk
Automobiles associated with functions
Complex products (computers)
Products associated with one’s ego or
emotions (clothing, cosmetics etc)
Product is of great interest to the consumer

11. Consumer Decision Making Process
There are five stages in consumer decision making process:
1.Problem Recognition: the consumer recognizes a problem
that needs to be solved /consumer recognises a need to
buy a product
2. Information Search: Attempt is made to gain knowledge
about the product
3. Evaluation and Alternatives: The products which can fulfil
the needs are evaluated in terms of plus and minus points
4. Purchase Action: The actual purchase is made from a
store after consideration of a number of factors
5. Post-purchase behaviour: This is how a consumer feels
after using the product that is satisfaction or
dissatisfaction

12. Problem Recognition
• A need or problem recognition could result when:
a) The Actual State changes (AS type):
• The product is failing, or the consumer is running
short of it;
• There is a problem that exists.
• Consumers who react in such situations are called AS
Types.
Example: A product stops functioning and the
customer needs a replacement;
e.g. A refrigerator; Samsung One door: Standard;

13. b) The Desired State changing (DS type):
• there is an imbalance between the actual state and the
desired state
• another product seems better and superior to the one
that is being currently used;
• Consumers who react in such situations are called DS
Types.
Example: The product is functioning properly; but the
consumer wants to buy an upgraded model;
e.g., the refrigerator is functioning properly; however, the
customer wants to buy another one which has more
features and is more modern;
Samsung Two doors: Deluxe: Frost free;

14. Problem Recognition
Importance of Problem Recognition
• Problem recognition explains:
1. Why a buyer buys
2. Gives definite direction to subsequent
purchase behaviour
3. Help the marketer exert his influence, so that
the need be recognised

15. • The consumer decision process generally begins
when the consumer identifies a consumption
problem that needs to be solved
• For example- I need a new camera or I would like
some new clothes.
• Problem recognition is the perceived difference
between an ideal (desired) and an actual state.
• Without recognition of a problem, there is no need
for a decision
• When there is a discrepancy between a consumer
desire and the perceived actual state, recognition of a
problem occurs
• This is a critical stage in the decision process because
it motivates the consumer to action.

16. • The ideal/desired state is the way that
consumers would like a situation to be (having
an excellent camera or wearing attractive
clothing).
• The actual state is the real situation as
consumers perceive it now.
• Problem recognition occurs if consumers
become aware of a discrepancy between the
actual state and the ideal state (“My camera is
too old” or “My clothing is out of date”)

17. • The level of one’s desire to resolve a particular
problem depends on two factors:
(1) the magnitude of the discrepancy between
the desired and actual states, and
(2) the relative importance of the problem

18. Types of Consumer Decision
1. Nominal Decision Making/Habitual Decision Making
In this type of decision making –
• the consumer already has some experience of buying
and using the product.
• Usually, this kind of behaviour is adopted for the
purchase of low cost, frequently used items.
• In such cases the buyers do not give much thought, or
search and also do not take a lot of time to make the
purchase.
• Most of the time the buyer is familiar with the various
brands available and the attributes of each and has a
well-established criteria for selecting their own brand

19. • The buyers are well aware of the product class, know the
brands and also have a clear preference among the
brands
• The degree of involvement in buying such products is low.
• These are products which are brought with greater
frequency like a toothpaste, shaving cream, blades,
cosmetics etc
• In such a case, the marketer has to ensure two tasks:
(a) The marketer must continue to provide satisfaction to
the existing customers by maintaining quality, service and
value.
(b) He must try to attract new customers by making use of
sales promotion techniques like points of purchase
displays, off-price offers, etc., and also introduce new
features to the products.

20. 2.Limited Decision Making
In this case –
• The consumer is familiar with the product and
various brands available, but has no established
brand preference.
• Here the buyer is more complex as compared
to routine buying behavior because the
consumer is confronted with an unfamiliar
brand in a familiar product class.
• The consumer would like to gather additional
information about the brands to arrive at his
brand decision.

21. For instance,
• A housewife buys refined vegetable oils for her
cooking and she may be familiar with the concept
of vegetable oil, vanaspati and ghee.
• She may also know that Dhara, Dalda and Sundrop
are some of the leading brands available.
• But to establish her choice of brand, she would like
to check with her friends and regular store about
the attributes of each.
• This buying behavior as described limited problem
solving because the buyers are in a situation where
they are fully aware of the product class but not
familiar with all the brands and their features

22. • Limited problem solving also takes place when a
consumer encounters an unfamiliar or new brand
in a known product category.
• The housewife, who buys refined vegetable oil, on
her next visit to the market, sees a new brand of
oil, Saffola.
• Apart from buying a new brand, this brand of oil
also claims the unique attribute of being low in
cholesterol
• To arrive at a decision, whether or not to buy this
brand, the housewife needs to gather information
about the new brand, which will allow her to
compare it with the known brands

23. • Here the marketer’s job is to design a
communication programme, which will help
the buyer to gather more information,
increase his brand comprehension and gain
confidence in the brand

24. 3.Extended Problem Solving
• This buying is referred to as a complex buying behavior because
the consumer is in an unfamiliar product class and is not clear
about what criteria to consider for buying.
• Extensive problem solving occurs when the consumer is
encountering a new product category.
• He needs information on both the product category as well as the
various brands available in it.
• This kind of decision is the most complex type.
For instance,
• you may become interested in purchasing a Color Television set to
replace the existing black and white one.
• You may have heard of the various brand names like BPL, Akai, etc.
but lack clear brand concepts.
• You do not know what product attributes or features to consider
while choosing a good television set. So yours is an extensive
problem solving

25. • The marketing strategy for such buying behavior
must be such that it facilitates the consumer’s
information gathering and learning process
about the product category and his own brand.
• The marketer must be able to provide his
consumer with a very specific and unique set of
positive attributes regarding his own brand, so
that the purchase decision is made in his favor.
• The marketing communications should be
aimed at supplying information and help the
consumer to evaluate and feel good about
his/her brand choice

26. Types of Problem Recognition
1. Immediacy of problem solution
• In this type it is relevant factor in determining
the decision time horizon
• That is how soon a problem solution is
needed, will affect the length of decision
process and intensity of decision effort
2. Expectancy of the problem
• It can affect such facets as the sources of
information used in the decision process

27. 3. Routine Problems
• It is those in which the difference between actual and
desired state is expected to occur and an immediate
solution is required
• Typically, convenience goods are associated with this
type of problem-recognition, such as most grocery
purchases are made by consumers
4. Emergency Problems
• It is those that are unexpected in which immediate
solutions are necessary
For example-a consumer who is involved in an
automobile accident and totals his car may need a
quick solution to his transportation problem

28. 5. Planning problems
• It occurs when the problem occurrence is expected but
an immediate solution is not necessary
• For example- a consumer who expects that his car will
only last one additional year may begin in window
shopping for autos, have discussed with friends about
various brands and pay closer attention to automotive
ads
6.Unexpected problem
• It is those when the problem is unexpected but no
immediate solution is required
• The fashion-adoption occurs over a lengthy period of
time for many consumers

29. Utilizing Problem Recognition Information
• Utilizing problem recognition information helps
the marketers as follows:
1) Marketing strategy and problem recognition
• Marketers are concerned with the following:
What problems consumers facing
What market mix to develop to solve the problem
Want the consumers to recognize the problem
Sometimes managers suppress problem
recognition

30. 2) Improvement of Product
• Managers get to know the problem by
intention and determine what improvements
can be made
• The problem identified by managers may be of
low importance to the consumer
• The problem is found by survey, focus group
interviews, product analysis, problem analysis,
activity analysis, human factor research,
emotion research

31. Activity Analysis
• It focuses on a particular activity, for example-
maintain a lawn, preparing dinner, lighting the
fire place
• It deals with the use of product, for example
lawn mower, microwave oven
Problem Analysis
• It states the problems and asks respondents to
associate a product brand or activity with it
• Packages are hard to open, does not pour well,
packages do not fit in the Frigidaire, packages of
particular product, waste too many resources

32. Human factor Research
• It attempts to determine human capabilities in
area of vision, strength, response time, fatigue
Emotions Research
• Marketers find the role of emotions in
decision making, that is emotions with certain
products or brands
3) Developing Marketing Mix

33. Search and Evaluation
• After a need is recognized, the consumer goes
for an information search, so as to be able to
make the right purchase decision.
• He gathers information about the:
(i) Product category and the variations
(ii) Various alternatives
(iii) Various brands.
• The amount of information a consumer will
gather depends on the following:

34. i) The consumer: demographics (age, gender,
education), psychographics (learning,
attitudes, involvement, personality type)
ii) Product category: differentiation and
alternative brands available, risk, price, social
visibility and acceptance of the product.
iii) Situation: time available at hand, first time
purchase, quantity of information required,
availability of information

35. Types of Search Activity
• The information search activity may be of various
types, viz, specific, ongoing and incidental.
(i) Specific
• This type of search activity is specific to the
problem and/ immediate purchase;
• It is spurred as the need arises, and the
consumer actively seeks information.
Example: student enters college and needs to buy a
laptop so that he can work on his assignments

36. (ii) Ongoing
• Here the search activity is a gradual process
that could span over time.
• Example: the same student has been thinking
of purchasing the laptop since the past five
years, and over these past 5-6 years, he has
been gathering information specific to the
laptop as a product category and also about
the various brands available

37. (iii) Incidental
• This is a by-product of another search activity
or experiences.
• Consumers absorb information from their day
to day routine activities and experiences.
Example:
• the student goes to a mall;
• he has gone there to help his mother buy a
microwave oven;
• there in the store, he attends a demonstration
of a new laptop that is being launched

38. Sources of Information Search
I) Internal Sources
Memory of past searches, personal experiences, and
low-involvement learning
II) External Sources
• Personal sources -such as friends, family, and others.
• Independent sources -such as magazines, consumer
groups, and government agencies.
• Marketing sources -such as sales personnel, Web
sites, and advertising.
• Experiential sources, -such as inspection or product
trial.

39. Sources of Information Search
• The information sources are of two types:
i) Internal sources
• This includes the consumer and his self.
• He recalls information that is stored in his
memory (comprising information gathered and
stored, as well as his experiences, direct and
indirect).
• Internal sources seem sufficient when:
It is a routine purchase
The product is of low involvement

40. ii) External sources
• Here the consumer seeks information from the external
environment.
• External sources are resorted to in cases where:
 Past knowledge and experience is insufficient.
 The product is of high involvement and the risk of making a
wrong decision is high
• External sources of information include:
 Interpersonal communication (family, friends, work peers,
opinion leaders etc.)
 Marketing communication or commercial information
(advertisements, salespeople, company websites, magazines
etc.)
 Other public sources (editorials, trade magazines and reports,
consumer awareness programmes on TV, Internet etc.)

41. Situational Influence on Purchasing Decisions
• Situational influence is defined as all those
factors particular to a time and place that do
not follow from a knowledge of the stable
attributes of the consumer and the stimulus
and that have an effect on current behavior
• The five key dimensions or characteristics are
physical surroundings, social surroundings,
temporal perspectives, task definition, and
antecedent states

42. Physical surroundings
• When a consumer enters a shop with the intention of purchase,
the most important things that he observes is the door, style,
cleanliness etc of the shop
• These are known as physical surroundings
• It include:
1. Location of the store
2. The sound (music and other noises present in the store)
3. Aromas (smell of place)
4. Lighting – how well lit are the products, how well lit is the store
and the show windows
5. The décor (decoration is done with great fineness and displays
are eye catching)
6. The colour (the colour of the store and of the walls and the
railings or any other show cases etc)
7. The merchandise itself (a merchandise of high value, quality, high
in demand etc)

43. Social Surroundings
• Social surroundings are the other individuals
present in the particular situation .
• People’s actions are frequently influenced by those
around them
For example-
Friends, relatives or salespeople
Conditions during the shopping environment (e.g.,
an overcrowded store may cause the buyer to
terminate the buying decision process
• Consumers accompanied by children buy about 40%
more items than consumers shopping by themselves

44. Temporal perspectives
• Temporal perspectives are situational characteristics
that deal with the effect of time on consumer
behavior .
• Time as a situational factor can manifest itself in a
number of ways
• The amount of time available for the purchase has a
substantial impact on the consumer decision process.
• In general, the less time there is available (i.e.,
increased time pressure), the shorter will be the
information search, the less available information will
be used, and the more suboptimal purchases will be
made

45. Task Definition
• By task definition is meant, the buying
intention or motive
• Why is the purchase being made-is it for self
consumption, or is it for a gift or is it for a
special occasion like a marriage gift and so on
• The task or the purpose and intentions must
be known to the marketer to make his job
easys

46. Antecedent States
• Features of the individual person that are not
lasting characteristics, such as momentary
moods or conditions, are called antecedent
states.
• For example, most people experience states of
depression or excitement from time to time
that are not normally part of their individual
makeup.

47. Purchasing Process
Why do people shop?
• Personal and social motives influence
consumer shopping activities
1.Personal Motives
a)Role Playing
• Shopping activities are learned behaviour and
are accepted as part of one’s position or role,
such as mother or housewife

48. b) Diversion
Shopping can offer a diversification from the routine
of daily life and is a form of recreation
c) Self-gratification
• Shopping may be motivated by the utility of the
buying process
• Emotional states or moods may explain why and
when someone goes shopping
d)Learning about new trends
• Shopping provides consumers with information
about trends and movements and product symbols
reflecting attitudes and lifestyles

49. e) Physical activity
• Shopping can provide a considerable amount
of exercise
f) Sensory stimulation
• Shopping can provide sensory benefits such as
looking at the handling merchandise, listening
to the sounds (noise, silence and soft
background music) and smelling the cents

50. 2. Social Motives
a) Social experience outside the home
• Shopping can provide opportunities for
seeking new acquaintances, encounters with
friends or just people watching
b) Communication with others having a similar
interest
• Shopping can provide an opportunity to
interact with customers or salespeople
having similar interests

51. c) Peer group attraction
• Certain stores provide a meeting place where
members of a peer group may gather
d) Status and authority
• Shopping may provide an opportunity to
attain a feeling of status and power by being
waited on
e) Pleasures of bargaining
• Shopping may offer the enjoyment of gaining
a lower price through bargaining or visiting
special sales

52. Store-Purchasing Process
1.Choosing a store
• The consumer has certain evaluative store criteria
established in his/her mind and compares these
with his/her perception of a store’s characteristics
• As a result of this process stores are categorized
as either acceptable or unacceptable
• If the resulting shopping experience is favourable
then store choice will become largely routinised
over a period of time

53. 2. Factors determining store choice
• There are several important factors that influence
consumer store choice behaviour
• They are as follows:
a) Store location
• Closer the consumers are to a store, the greater
their likelihood to purchase from that store
• The further away are consumers are from a
store, lower the likelihood to patronize that store
• Intercity, intra-city and intra-store may be the
choices for the store location

54. b) Store design and physical facilities
• The design characteristics of a store visibility
reflect its image and can dramatically influence
patronage
• Many consumers appear to size up a store based
on its outward appearance of architecture and
signs
c) Merchandise
• Consumer prefer stores that offer either a wide
variety of product lines, brands and prices or
substantial depth to their assortment such as
sizes, colors and styles

55. d) Advertising and sales Promotion
• Advertising can be highly influential in
cultivating a store image in consumers mind
• It fulfills the three goals such as:
(i) To inform consumers such as for a new store
opening
(ii) To persuade consumers that they should
patronize a certain store or buy a particular
brand
(iii)To remind customers of the store that they
are appreciated

56. e) Personnel
• Employees of a retailer influence the store’s image
• Consumers generally desire to shop where store
personnel are perceived as helpful, friendly and
courteous
f) Customer service
• Retail stores may offer number of services in order to
attract customers:
 Credit
 Delivery, parking
 Gift wrapping, product returns
 Telephone ordering
 Complaint offices etc

57. g) Clientele
• Consumer will tend to patronize those stores
where persons similar to them are perceived
to be shopping
• Store choices depends on social-class
membership
• There is matching process occurs between the
consumer’s self-image and the store image

58. 3. In store purchasing behaviour
• Once the consumer have selected the stores, a
number of factors influence consumer’s
behaviour within the store environment
Merchandising techniques
a) Store layout and Traffic Patterns
• A store’s interior is organized in such a manner
as to accomplish the firms merchandising
strategy
• Traffic patterns are popular to determine where
good or bad sales areas are within the store

59. b) Point-of-Purchase Media
• An effective combination of good store layout and
attractive displays can change a retail environment into
exciting and also more sales
c) Product shelving
• Height of shelves at which products are displayed and
the number of rows presented in the shelves can
influence sales of products
d) Pricing strategy
• Price awareness, promotional prices and couponing are
important
e) Packaging
• It include-graphics, product information contained on
the package, and the physical package

60. Non-Store Purchasing Process
• In non-store buying, a shopper does not want to go
to a store
• Shopper avoids the difficulty of finding parking space
• Shopper wants to avoid long queues for payment or
does not have time to drive down to a store several
miles away
• Non-store buying or direct marketing is one in which
products and services are offered to a prospective
customer by telephone, mail or other accesses

61. • It includes door to door selling, direct mail etc
• There are number of ways to non-store buying and
the buyer can buy in a number of ways
• Known buyer is one who places the order from the
home by telephone, catalogue, brochure or mail
• The consumer can avoid an extra trip to the
market
• A consumer gives the order over the telephone to
his supplier, who notes down the order and
supplies it by reaching the goods to the desired
destinations

62. Significance of Non-store Purchasing
1. Self Identity of Consumer
• An increased emphasis on consumers self identify
with individually expressed through goods and
services which leads to a desire to consider more
items than a store can display
2. Save in time for working women’s
• A higher proportion of working women who have
less time to shop
• Increased leisure time pursuits of self
development and creative expression, which
allow less time to shop from store to store

63. 3. Rapid Acceptance of new technology
• There is a rapid acceptance of new technology such as
home computers, automated bank teller machines
• More consumers are becoming technologically
competent for new merchandising approaches
4. Mode of paying easy
• Increased popularity of non store innovations as pay
by phone, mail order catalogs and Tv direct marketing
resulting in consumers who are becoming
psychologically prepared for new shopping forms
5. Demand for specialty product
• Greater demand for specialty products and services
that are difficult to get in most shopping centers

64. Purchasing Pattern
• Consumers make following types of
purchases:
1. Trial purchase
2. Repeat purchase
3. Impulse purchase

65. Trial Purchase
• A purchase would be considered as a trial-
when a consumer purchases a product for the
first time and buys a smaller quantity than
usual
• Trial is the exploratory phase of purchase
behaviour in which consumers attempt to
evaluate the product through direct use
• Consumers may also be encouraged to try
new product through tactics such as free
coupons, samples

66. 2.Repeat Purchase
• When a new brand in an established product
category (toothpaste, detergent powder, cold
drinks) is found by trial and found to be better
than other brands then consumers are likely
to repeat the purchase
• Repeat purchase is closely associated with the
concept of brand loyalty

67. 3. Impulse purchasing
• It is also called as unplanned purchasing
• Impulse purchasing occurs when consumers
suddenly decide to purchase something they had
not planned on buying
• Pure impulse break normal buying pattern
• Suggestive impulse having no previous knowledge
of a product
• Reminder impulse may be recall advertising
• Planned impulse where a shopper enters the store
with the intention of making some purchases on
the basis of price, coupons

68. Post Purchase Evaluation and Behaviour
• After making a purchase, the consumer uses the
product and then evaluates the experience to
determine whether it was satisfactory or
unsatisfactory
• After purchasing a product, a customer is satisfied or
dissatisfied
• Customer’s satisfaction or dissatisfaction depends on
his expectation and difference between the
performance
• Expectation gives the degree of customer’s
satisfaction/dissatisfaction with the product

69. Post-purchase Behaviour
Purchase
Usage
Evaluation
Satisfaction
Committed
customers
Repeat
purchases
Increased
use
Brand
switching
Discontinued
use

70. Customers experience with prior product
Dissatisfaction Expectancy Confirmation Satisfaction
Performance is performance almost performance is
below expectation as expected-not is better than
different expected
Expectation of the performance
of the product/brand
Actual performance of the
product as evaluated by the
consumer
Discrepancy between the
expected and actual
performance

71. Consumer satisfaction
• If the performance of the product/brand is
better than expectations of the customer then
the customer is satisfied
• Satisfaction is the feeling that results when
consumers make a positive evaluation or feel
happy with their decision.

72. Post Purchase Dissonance
• This is a feeling of tension and anxiety that a
consumer experiences after the purchase of a
product.
• The consumer begins to have a feeling of uncertainty
with respect the performance of the product and
begins to doubt his purchase decision “whether the
decision was the right one?
• He begins to ask himself the following questions:
a) Have I made the right choice?
b) Have I purchased the right brand?
c) Have I got value for money?

73. • Post purchase dissonance generally occurs in
cases where:
(i) The decision making and purchase relates to a
high involvement product;
(ii) The purchase activity is irrevocable;
(iii) The consumer cannot return the product;
(iv) The various alternatives have desirable
features and are all comparable;
(v) The alternatives are also unique in some way
or the other.

74. • Consumers try to reduce this dissonance by:
(i) Gaining more product information;
(ii) Discussing with other satisfied customers who have
bought the same product/brand;
(iii) Going back to the dealer and asking for reassurances.
• Other methods that consumers employ to reduce
cognitive dissonance are by:
Rationalizing that the choice that they have made is
the right one.
Refer to data (printed/audio visual) that supports and
recommends the chosen product/brand.
Make others buy the same product/brand to reassure
their choice.

75. • Marketers also employ strategies to reduce
this dissonance by
providing guarantees and warranties,
membership to company consumer forums
and
 communication and follow up with the
customers