CONSUMER DECISION MAKING PROCESS

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CONSUMER DECISION MAKING PROCESS
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Learning Objectives

• Understand the three problem solving variations
  and when consumers use them.
• Thoroughly understand each stage of the consumer
  decision making process.
• Be familiar with low effort decision making
  tactics.
• Understand how situational influences affect the
  decision making process.

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Problem Solving Variations

• Extended Problem Solving
• High perceived risk
• Typically expensive, infrequently purchased
  products
• Routine Problem Solving
• Low perceived risk
• Purchases made out of habit or brand loyalty
• Typically inexpensive, frequently purchased
  product
• Limited Problem Solving
• Moderate perceived risk
• Consumer has limited time or energy

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Stages in the Consumer Decision Making Process

• Problem recognition
• Information search
• Alternative evaluation
• Decision
• Post decision evaluation

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Problem Recognition

• Occurs when the consumer sees a significant
  difference between his or her actual and ideal
  state.
• Where do we get our notion of what is ideal?
• personal expectations
• personal aspirations
• culture
• reference group
• marketing

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Internal Search

• Recalling information, experiences, and feelings
  concerning products and brands.
• How much do we engage in internal search?
• What kind of information is recalled?
• 1. Brands
• evoked set
• brand familiarity and retrieval cues increase
  chances of being in the evoked set
• 2. Attributes
• 3. Evaluations
• 4. Experiences
• Is internal search always accurate?
• Confirmation bias

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External Search

• Consumers acquire information from outside
  sources.
• Engage in pre-purchase and ongoing search
• External Sources
• 1. Retailer search
• 2. Media search
• 3. Interpersonal search
• 4. Independent search
• 5. Internet source
• effects of information overload
• Is external search always accurate?

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How Much do We Engage in External Search?

• Motivation to Process Information
• Ability to Process Information
• Opportunity to Process Information

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Evaluation of Alternatives

• Identifying Alternatives
• evoked set and consideration set
• Identifying Evaluative Criteria
• information search suggests criteria and
  identifies brands
• Evaluative criteria includes those criteria that
  are important to the consumer when rating product
  alternatives
• Firms try to identify evaluative criteria through
  market research.

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Decision

• Consumers select and purchase the product
  alternative that best meets his or her evaluative
  criteria.
• Noncompensatory decision rules
• Compensatory decision rules

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Post Decision Evaluation

• Process where consumer reevaluates the product as
  he uses it.
• Product performance is compared with consumer
  expectations.
• Satisfied customers
• Dissatisfied customers
• Cognitive dissonance

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Low Effort Decision Making

• Heuristics
• Market Beliefs
• Brand Loyalty
• Habit
• Impulse Purchases
• Variety Seeking

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Situational Influences

• Consumer behavior is influenced by the
  circumstances surrounding the purchase of a
  product.
• Social surroundings
• Physical surroundings
• Temporal effects
• Purchase task