Consumer Decision Making Notes

Consumer Decision Making

Consumer decision-making involves evaluating product attributes and selecting the option that best solves a recognized need at the lowest cost. It's a multifaceted process that marketers aim to understand to ensure their strategies are effective.

What Is A Decision?

A decision is selecting one option from multiple alternatives. Consumer decisions include what, when, from whom, and how to purchase. These decisions are influenced by emotions and the environment, not just product attributes.

Consumer roles:

• User
• Payer
• Buyer

Levels of Consumer Decision-Making

1. Habitual (Routinized) Response:

   • Consumers have experience with the product category.
   • Brand loyalty: high involvement, emotional attachment.
   • Repeat purchase: brands are perceived as the same.

2. Limited Problem Solving:

   • Intermediate decision-making.
   • Basic criteria are established but needs more information on brands.

3. Extensive Problems Solving:

   • No established criteria.
   • Requires much effort and information gathering.

Types of Consumer Decisions

1. Budget Allocation: How to spend or save within financial constraints.
2. Product Purchase Or Not: Choosing between competing products.
3. Store Patronage: Deciding where to obtain the product.
4. Brand and Style Decisions: Selecting specific items/brands.

Consumer Decision Making Process

1. Problem Recognition:

   • Customer identifies a need or problem.
   • Internal stimuli: physical or psychological discomfort.
   • External stimuli: marketplace information.

2. Information Search:

   • Consumers seek knowledge about products or stores.
   • Marketer sources: advertising, salespersons.
   • Non-marketer sources: personal opinions, past experiences.
   • Incidental learning
   • Directed Search and Evaluation
   • Systematic Search
   • Heuristics

3. Alternative Evaluation:

   • Consumers evaluate available brands or alternatives.
   • Evaluative criteria: product features or attributes.

Consumer Decision Rules

Decision rules are strategies that consumers use to facilitate brand selection. Classified into:

1. Compensatory Rule:

   • Evaluates brand options by considering all relevant attributes.
   • $Rb= \sum WiBib$ where Rb = Overall rating of brand b. Wi = Importance weight attached to evaluative criteria i. Bib = Evaluation of brand b on evaluative criterion i.

2. Non-Compensatory Rule:

   • Does not allow balancing positive against negative evaluations.
   • Conjunctive Rule: Minimum standard for each attribute; brand must meet all cutoffs.
   • Disjunctive Rule: Establishes a minimum cutoff for each attribute; acceptable if it meets one.
   • Lexicographic Rule: Ranks attributes by importance; selects brand performing best on the most important.
   • Elimination by Aspects (EBA): Rates attributes in order of importance and defines cut-off values.

Comparative Evaluation of Choice Models:

• Conjunctive: processes one brand at a time
• Lexicographic and EBA models: process the entire brands simultaneously one attribute at a time
• Compensatory model: considers several dimensions or attributes at the same time, this is used sparingly and only for important decisions

Purchase Process

1. Identify preferred alternative.
2. Develop purchase intention.
3. Implement the purchase.

Post Purchase Process

Includes:

• Decision confirmation
• Consumption experience evaluation
• Satisfaction or dissatisfaction
• Possible future response (exit, voice, loyalty).

Post-purchase dissonance is influenced by:

• Commitment
• Importance of the decision
• Difficulty of choosing
• Tendency to experience anxiety

How Do Consumer Respond To Dissatisfaction?

Options:

• Do nothing
• Avoid the seller or a brand in the future
• Negative word of mouth to friends
• Seek redress of problem from seller
• Complain to outside agency