Consumer Decision Making Notes

Learning Objectives

  • Understand activities involved in consumer decision-making process
  • Describe three major decision-making research perspectives
  • Explain three major types of decision-making approaches
  • Understand importance of the consideration set in decision-making process
  • Understand factors influencing type and amount of search performed by consumers

Consumer Decision Making

  • Consumers continuously make decisions to solve problems:
    • Activities in decision-making:
    1. Need recognition
    2. Search for information
    3. Evaluation of alternatives
    4. Choice
    5. Post-choice evaluation
  • Decision-making leads to consumer choice both in type of product and purchase consideration.
  • Decisions often involve utilitarian or hedonic value, affecting how choices are made.
  • Motivation and emotion significantly influence the decision-making process, which can affect consumer satisfaction or frustration.

Decision-Making Perspectives

  • Three perspectives on consumer decision-making:
    1. Rational Perspective: Consumers gather and analyze information logically before making decisions.
    2. Experiential Perspective: Decisions are influenced by feelings and past experiences with products.
    3. Behavioral Influence Perspective: Choices are shaped by environmental factors such as marketing strategies.

Decision-Making Approaches

  • Decision-making approaches depend on involvement and perceived risk:
    • Extended Decision Making: Involves thorough search and high involvement.
    • Limited Decision Making: Involves little search, relying on prior beliefs.
    • Habitual Decision Making: Minimal information search, based on habit.
  • Types of Risk: Financial, social, performance, physical, and time risks affect decision-making processes.

Need Recognition, Internal Search, and Consideration Set

  • Need Recognition: Occurs when there is a discrepancy between actual and desired states; can trigger the decision-making process.
  • Search Behavior: Consumers engage in internal (memory retrieval) and external (external information) searches for solutions.
    • Consideration Set: Alternatives acceptable for further consideration after search.
    • Universal set: Total options
    • Awareness set: Known options
    • Consideration set: Chosen acceptable options
    • Inept/inert set: Unacceptable/indifferent options

External Search

  • External Search: Involves gathering information from sources outside personal memory.
  • Factors influencing external search include information reliability, ease of access, and trustworthiness.
  • New technologies like smartphones and apps enhance ease of searching for product information quickly and effectively.
  • Emotional responses can follow the search process, leading to potential search regret if expectations are unmet.

Final Insights

  • Consumer decision-making often follows a non-linear pattern, recognized as a consumer journey rather than a fixed series of steps.