Concise Summary of Consumer Decision Making

Learning Objectives
  • Understand what a consumer decision is and the levels of decision making.
  • Explore various views or models of consumer decision making.
  • Recognize the significance of consuming, possessing, and relationship marketing in consumer behavior.
Consumer Decision Definition
  • Decision: Selection of an action from two or more alternatives.
  • A no-choice situation (e.g., prescribed medications) isn't considered a decision.
Levels of Consumer Decision Making
  1. Extensive Problem Solving:
    • No established criteria for evaluation.
    • Requires significant information (e.g., first-time expensive purchase).
  2. Limited Problem Solving:
    • Basic criteria are established.
    • Additional information needed for a specific decision (e.g., upgrading a known product).
  3. Routinised-Response Behavior:
    • Familiarity with the product category.
    • Decisions made with minimal thought (e.g., habitual purchases).
Consumer Decision-Making Models
  1. Economic Model: Rational consumer, aware of all alternatives. (Realistically unrealistic)
  2. Passive Model: Consumers manipulated by marketing efforts; seen as impulsive.
  3. Cognitive Model: Consumers actively seek information; consider brand evaluations.
  4. Emotional Model: Emotional connections influence purchases; consumers can act irrationally but satisfy emotional needs.
Four Main Components of Consumer Decision Making
  1. Input: Marketing and sociocultural influences.
  2. Process: Psychological influences on the recognition of needs, information search, evaluation of alternatives.
  3. Output: Purchase behavior, satisfaction, and post-purchase evaluation.
    • Trial: First purchase to gauge satisfaction.
    • Repeat Purchase: Indicates satisfaction and brand loyalty.
Risks in Decision Making
  • Types of Risks: Functional, physical, financial, social, psychological, time risk.
  • Higher perceived risks lead to more extensive searches and evaluations.
Gifting Behavior
  • Gifting symbolizes relationships and can affect interpersonal dynamics.
  • Five categories: intergroup, intercategory, intragroup, interpersonal, and intrapersonal gifting.
Importance of Consuming and Possessing
  • Consumer behavior includes satisfaction derived from using products, the memories associated with possessions, and the emotional connection to items.
    • Items can be symbols of identity and connection to the past.
Relationship Marketing
  • An essential strategy to foster consumer loyalty amid increasing competition.
  • Success factors: Trust, communication, and sustained customer engagement.
  • Programs aim to retain existing customers and enhance long-term relationships.