onsumesn Decision Mak bioce

UNIT 3

Meaning of Consunmer Decision Making

Consumer Decision Making refers to the process under which consumers gothrough in
deciding what to purchase, including problem recOgnition, information searching,
ev aluation of alternatives, making the decision and post-purchaseevaluation

Reasons behind Consumer Decisions:

In the present world, a consumer has a lot of options while taking any decision. But
basically the consumer has five decision dimensions.

These are as follows:

1. What to buy?
2. How much to buy?
3. Where to buy?
4. When to buy?
5. How to buy?
1. What to buy?
The decision to buy any product is the most important task. Until and unless if a
decision is made a consumer cannot buy anything. The consumer has also to make the
choice of the product available in the market. After taking any decision consumers buy a
product. Then the consumer takes a decision about which brand to buy. This can be
attached with the price and features of the product.

2. How much to buy?

The next decision the consumer has to make is to how much of the produet to be
purchased. It depends on the type of the product to be purchased and then the
purchases can be made. The quantity to be purchased by the consumer depends on the
availability and frequeney of use of the product.

3. Where to buy?
Another decision the consumer has to make is where the produet should be bought.
Consumers usually will go to a place where the services offered are excellent. Also the
other factors like prices and outlets are being decided by the consumers. The consumer
expects a discount on the product. So, consumers usually go to such places where
availability of the product quantity and quality can be decided by just looking at the
other brands of the same product to be purchased. Many products have different
features and therefore after thoroughly examining the purchase is made.

4. When to buy?
The consumer also has to decide the time when the purchase has to be made. This also is
iniluenced by the availability of the products. Usually the purchase made by a consumer
is very high during the festive season, due to large volume of discount. This not only
ensures the consumer that they can get a product at a discount price. It is also
influenced by opening times, sale and clearance period, transportation etc., for the
goods purchased.

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 5. How to
buy?
COnsumer has to decide whether to pay
pects the goods purchased to be cash by credit Pay
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Every ay we are involved in taking decisions related to the various

TTe
uch aspects of ourorves.
decisions are taken automatically without the involvement any
particular decision making
nstance say a housewife process.
goes to purchase a mid-priced range of her decision
n g merely involves making a selection from the various brandstea, of tea like "Taj
ahal, Tata Tea, Red label, Yellow Label and so on. The process by which a person is
Tequired to make a choice from various alternative options is referred to as deciSIOn
making.
emarketing environment has been evolving, become competitive and more of a
er s market, with each marketer trying to adopt unique strategies which can result in
positive decision making from the consumer's side.
while the customer gains from having to decide and select from a wide array of choices,
the marketer will benefit from a substantial increase in sales when the consumer decides
to purchase their brands.
The role of men and women in the decision making process, as discovered by Hindustan
Lever's Prakash Tandon makes interesting
reading
CONSUMER DECISION MAKING PROCESS
Consumer behavior is the way in which individuals and organizations make decisions to spend
their available resources, such as time or money. Consumer behavior relates to two major types
of marketing - business- to-consumer and business-to-business. We will begin by focusing on
the role of consumer behavior in business- to-consumer marketing (B2C), which involves selling
goods and services to end-user customers
Examples of B2C businesses include restaurants, car dealerships, and barber shops, each of
which market to individual consumers like you who might use their products.
Whether you are deciding where to eat or what cel phone plan to purchase, most consumers
targeted by B2C marketers go through a common decision-making process.

The process has five stages whieh are as follows:

Stage 1-Problem Recognition:

The buying process begins when eonsumers recoyniz: they have a need to satisfy. This is called
the problem recognition stage. Imagine leaving class to find that high winds had blown one of
the oldest trees on campus directly onto your car. You need your car to get to school, work, and
social events with your friends and family.
Because your current car is destroyed. you would immediately recognize that you need a new
type of transportation. In this case, due to a lack of public transportation and the distance you
must travel to meet your day-to-day obligations, you need to purchase a new car.
 From a marketing
perspective, it's important to keep in mind the following two tant
issues related to problem impor
I. Marketers must recognition:
understand all aspects of consumers those that
obvious, to create problems, are e
even
products that improve or enhance consumers' lives. For
example, iT
professionals don't know what problem, bevond the need for transportation, you want o mark
purchasing a new car, they are not likely to develop strategies that will resonate with you
Are you looking for added
prestige or do vou want to spend
less money on monthly paym
ents?
Marketers also must
recognize that consumers might be buying the same car to so1V
different problems.
Marketers must remember that if the consumer is not aware of a problem or does not
recognize a need, he or she is unlikely to engage in any of the subsequent steps ofthe buying
process. Marketing professionals working in the Dolitical world confront this challenge eacn
election cycle. Incumbent politicians of both major political parties running for the United stales

Congress are re-elected at an average rate of over 90 percent.

If voters, the consumers in this example, do not recognize a problem with their current e c
marketers can
official, they most likely will vote to keep that person in office. Before political
number of voters
promote an alternative candidate, they must make sure that a sufficient
consider the incumbent a problem and are open to potential alternatives.

Stage 2-Information Search:

the best
seek information
problem, they that will help them make
Once consumers recognize a
the problem. Consumers
decision about whether or not to purchase a product to address
possible the purchase.
how important they consider
will expend effort searching for information based on of information
a great deal
like buying a house or a new car. often require
Larger purchases, or new car speakers, may
also
gift for a boyfriend
gathering. Smaller purchases, such as - a new
Information
of their importance to the
consumer.
because
involve extensive information searches
external and internal.
searches fall into two main categories-
1. External Information Search: to support
seek infornmation beyond their personal knowledge and experience
When consumers Marketers can
are engaging in an
external information search.
them in their buying decision, they advertisements and product
websites. The
fill in their knowledge gaps through consumers with on
help c o n s u m e r s tool because it provides
beconme increasingly powerful
much or as litule detail as they prefer.
Internet has an

information in a format that offers them as

demand product external information search.
For example,
firms use social media to empower consumers information and
Many Flickr, and Scribd to communicate
Ford usesFacebook, Twitter, YouTube,

deepen relationships with

customers.
video about the
by placing a sponsored
Facebook
paid advertising and
content on
Ford combined million people viewed the
video in just one
Facebook logout page. Over I
Ford Mustang on the to a large audience of
external information about the Mustang
day, allowing Ford to provide
consumers.
the most important sources of external
The consumer's friends
and family serve as perhaps life might say
car and what those in your
information. Think about the example of buying a new the salespeople and
of vehicles. You might be impressed by
about different brands or types or riends tell you about
a bad
of car, but if your parents
commercials for a certain type
their opinions probably carry
more weight.
experience they had with it,

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 The
power of these
estadiish good personal external information
experience mightrelationships with all customers. It's sources highiigns must
2. Internal influence the impoible to predict how e consumer's
Information Search:buving decision and information of another potenuaone
o a purchases require consumers
to search for
Pldsea items
shampoo or toothpaste. internalinformation
such as -

externally. Or
O r making a decision. In an internal information ofien prOvides a sui
ICes with items from the same brand or information search, consumers use their past expoi
Oucan easily remember your favouriteproduct
soft
class as sources of information.
drink or vacation destination, which will liKely
niluence what you drink with lunch today or where
you go for spring break nCx
u Car example, your past experience with automobiles year.
Car
purchase. If you have had a plays a significant role in your new
great experience driving a Forl Escape or Toyota Camry,
Cxample, you may decide to buy a newer model of that same car. Alternatively, if you have hadfora
bad
experience with a specific car, brand, or
automobiles from contention. dealership, you may quickly eliminate those

Stage 3- Evaluating
Once consumers have
Alternatives:
acquired information, they can use it to evaluate different alternatives,
typically with focus on identifying the benefits associated with each
a
evaluative criteria consist of attributes that product. Consumers
they consider important about a certain product.
For example, you would
probably consider certain characteristics of a car, such as the price,
warranty, safety features, or fuel economy, more important than others when evaluating which
one tobuy. Car marketers work very hard to convince you that the benefits of their car, truck, or
SUV reflect the criteria that matter to
you
Marketing professionals must not only emphasize the benefits of their good or service but also
use strategies to ensure
potential buyers view those benelits us important. A company marketing
an extremely fuel efficient car
might explain that you can use the several thousand dollars a year
you will save on gas to pay off eredit card debt or fund a family vacation.
In contrast, a company
marketing a giant SUV with poor fuel elficiency might tell you about the
vehicle's safety features and how it can protect your
family, or the flexibility it will give you to
take more family members on trips.
You should also keep in mind the
importance of this stage of the decision-making process as you
interview for potential jobs. Employers are likely to evaluate
various attributes, such
otheragainst
you job applicants on
as -

college major, GPA, work experience, skill sets, and potential for
development within the organization.
Your resume and interview need to market the idea that the
benefits you would bring to the
organization reflect the criteria that matter to the prospective employer. For example, if your
GPA is low relative to others,
highlight your work experience or leadership in student
organizations and emphasize that the employer needs someone with a proven track record of
delivering results and leading others.
Ifyour work experience is limited. highlight other benefits you bring. You might stress the idea
that your high GPA shows discipline. focus, and
high intellectu:al ability that will help you bring
fresh innovative ideas to your role with the
company. Your ability to match your best attributes
to the attributes most
important the hiring firm will
to
directly
benefit your search for a fulfilling
career.

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Stage 4-Making the Purchase
After evaluating the alternatives. a customer will most likely buy a product. Usually the marketer
has little control over this part of the consumer decision-making process Stil, consumers have
several decisions to make at this point. For example, once you have decidod on the car you want,
you have to decide where to buy it.
Price, sales team, and past experience with a specific dealership can directly impact this decision
as can financing terms such as lower interest rates. If you decide to lease a car rather than buy
one, you would make that decision during this step.
An effective marketing strategy should seek to encourage ritual consumption. Ritual
consumption refers to patterns of consumption that are repeated with regularity. These patterns
can be as simple as buying the same soft drink or stopping at the same place for breakfast every
morning. These types of repeat purchases often provide firms with higher prof+ts and a steady
stream of customer sales.

Stage 5- Post-Purchase Evaluation:

about the purchase will
Consumers post-purchase evaluation is critical because their feelings or service. As a
likely impact whether or not they become repeat buyers of thal particular good
which is the mental conflict that
consumer, you likely have experienced cognitive dissonance,
contradicts their beliefs or assumptions.
people undergo when they acquire new information that when consumers
dissonance is somet1mes referred to as buyer's regret and often arises
Cognitive
begin to wonder if they made the right purchase decision. reasons. Perhaps you
Cognitive dissonance after making a purchase can arise for numerous
discover that the car you just bought doesn't get as good gas mileage on the highway as you'd
extended family bought the same car for a lower
expected, or you find out a member of your
hear a friend talking about how much she enjoys another make
of car.
price, or
Marketersyou
do various things to reduce the level of dissonance felt by the consumer. For example,
extended warranty or a toll-free number for you to call with any
a car company might offer an
issues about your new car. They may also enhance your early experience with your new car by
SiriusXM satellite radio.
offering free trials of popular features like the OnStar system or after your new car
These additional free features typically extend through the first 6 to 12 months
dissonance.
purchase, the time during which consumers are most likely to experience cognitive
the likelihood that
By making consumers feel better about their car purchase, markelers increase
those consumers will provide positive external information about the car to other people and
ultimately consider returning for their next car purchase.
Post-purchase evaluation is even more important to marketers today because of the power of
customer reviews available on the Internet. Such reviews can become critical factors in the
firm's ability to win over new customers.
Though the decision-making process provides marketers with a framevvork for understanding
how consumers decide to purchase a product, consumers don't always follow the orderly stages
discussed. Marketers should not assume that because their strategy succeds at one stage of the
consumer decision-making process it will succeed at the next.
For example, a car company might do an excellent job of providing external information to help
interest you in its car but still not receive your business because of your inability to secure
financing or the objections of your family members. Numerous situational influences like these
can occur at various
points in the decision-making process and change the customer's path.