Consumer Behavior and Decision Making Notes

Learning Objectives

  • Understand Consumer Decision-Making Process:

  • Comprehend the series of activities involved in consumer decision making.

  • Decision-Making Research Perspectives:

  • Describe three major decision-making research perspectives.

  • Types of Decision-Making Approaches:

  • Explain three types of decision-making approaches.

  • Consideration Set:

  • Understand the importance of the consideration set in decision-making.

  • Factors Influencing Search:

  • Identify factors that influence the type and amount of search performed by consumers.

Consumer Decision-Making Process

  • Core Concept: Consumers consistently make decisions to solve problems, involving:

  • Need Recognition: Identification of a problem or need.

  • Information Search: Gathering data to address the need.

  • Evaluation of Alternatives: Comparing possible solutions.

  • Choice: Making a selection of a product or service.

  • Post-Choice Evaluation: Reflecting on the decision after the purchase.

  • Decision Making and Choice:

  • Consumer Choice: Not limited to brand selection; it can also involve the decision to purchase or not.

  • Value Consideration: Decisions often revolve around perceived value, influenced by both utilitarian (functional) and hedonic (emotional) values.

Decision-Making and Motivation

  • Motivation: Internal driving forces influencing consumer actions.
  • Nearly all consumer decisions stem from motivations to fulfill needs.
  • Emotional Influences:
  • The decision-making process can evoke various emotions such as frustration or enjoyment, particularly in different shopping contexts.

Decision-Making Perspectives

  • Rational Decision-Making Perspective:

  • Assumes consumers make informed, logical decisions based on detailed information gathering. Example: Evaluating attributes of apartment complexes.

  • Experiential Decision-Making Perspective:

  • Focuses on feelings and experiences associated with consumption. Example: Choosing activities for enjoyment rather than practical outcomes.

  • Behavioral Influence Decision-Making Perspective:

  • Decisions are responses to external environmental cues, such as promotional displays. Example: Purchasing snacks from a catchy display.

Decision-Making Approaches

  • Depends on:
  • Involvement & Risk Level: Higher risk and involvement necessitate a more thorough decision-making process, characterized by:
    • Extended Decision Making: Careful problem analysis and information gathering. Often occurs with high risk and significant emotional investment.
    • Limited Decision Making: Brief information search based on existing knowledge; typically involves lower-risk products.
    • Habitual Decision Making: Decisions based on habit, often without prominent information search; characterized by brand loyalty or inertia.

Need Recognition and Search Behavior

  • Need Recognition: Occurs when there is a perceived gap between current and desired states, triggering the decision-making process.

  • Search Behavior: Engaging in information-gathering aimed at resolving identified needs. Types of searches:

  • Ongoing Search: General interest and information gathering not tied to a specific purchase.

  • Prepurchase Search: Focused on gathering information specifically to make an upcoming decision.

  • Consideration Set:

  • Comprised of alternatives deemed acceptable, includes types of sets:

    • Universal Set: All possible solutions.
    • Awareness Set: Known alternatives.
    • Consideration Set: Viable options for further evaluation.
    • Inept/Inert Sets: Alternatives deemed unacceptable or apathetic, respectively.

External Search Process

  • External Search: Gathering new information from outside sources when internal knowledge is insufficient (friends, online reviews, advertisements).
  • Factors Affecting Search:
  • Price and Quality: Evaluative criteria utilized by consumers in assessing products.
  • Technology Impact: Internet and mobile technologies enhance information access and streamline decision-making.
  • Consumer Involvement: Higher involvement increases search activity; inversely, less experience often leads to limited search efforts.

Risks and Emotional Response in Decision-Making

  • Perceived Risks: Include financial, social, performance, physical, and time-related risks that can alter the search effort.
  • Decision Journey Concept: Represents a non-linear decision-making process, suggesting that consumers can revisit stages based on emotional experiences or changes in perceived needs.

Summary of Key Concepts

  • Consumers navigate a complex decision-making landscape shaped by needs, search behaviors, personal motivations, external influences, and emotional responses, striving for balance between rationality and satisfaction of inherent desires.