Prepared By- Mathew Lawrence

 Why study Consumer Decision Making
 What is consumer mind (Black Box)
 Concepts - consumer decision, purchase involvement and
product involvemt
 Types of consumer decisions
 Roles of Consumer in C.D.M
 Consumer Decision Making process
 Need Recognition process
 Information search process
 Evaluation process
 Purchase
 Post-purchase
 Factors influencing C.D.M

 Opening Case on Aarey Milk Diary.
 So firms that choose not to understand their consumers
purchasing behaviour often lose out of the market.
 An excellent engineered product may fail just because the
customer does not identify himself or herself with it.
(share examples)
 The firm must understand the buyers purchasing
behaviour. Specially how the buyer decides, what
motivates him and who influences him.
 The marketer needs to focus on “how and “why” of the
total experience consumers have with products and
service. (share examples)

 Buyers continues to be an Enigma- sometimes responding the
why the marketer wants and on other hand occasions just
refusing to buy the product from the same marketer.- Black
Box
 The marketers provide stimuli but he is uncertain of the
buyers response. This stimuli is a combination of product
price etc.
Stimulus
Company controlled Buy
Product
Price
Advertising
Sales Promotion Response
Display
Distribution
Consumer mind(Black Box) No Buy
Social
Word of mouth
Reference Group

 A decision is a set of an options from two or more alternatives
choices.
 So consumer decision produces an image of an individual
carefully evaluating the alternatives of a set of
products, brand or services and rationally selecting the one
that solves a clearly recognized need for the least cost.
 Purchase involvement is the level of concern for, or interest
in the purchase process triggered by the need to consider a
particular purchase.
 Product involvement is the level of concern for a particular
brand or a product category.
 Examples: Juice (purchase involvement ) Slice,
Mirinda, Thums up etc. (product involvement)

Nominal decision Limited decision Extended
making making decision making
Problem recognition Problem recognition
Problem recognition
Information search Information search
Internal Internal
Limited external External
Alternative evaluation Alternative evaluation
Information search Few attributes Many attributes
Limited internal Simple decision making Complex decision making
Few alternatives Many alternatives
Purchase

Initiator
Influencer
Decider
Buyer
User

 Consumer decision processes are the decision making
processes undertaken by consumers in regard to a potential
market transaction before, during, and after the purchase of
a product or service.
 The focus of this process, forms an integral part of consumer
behaviour on how consumers spend their available resources
(such as time and money) on personal and household products
and services so as to satisfy their needs.
 The decision-making processes that consumers use when
making purchases vary, particularly with regard to the time
and effort that they take to reach a decision.

 Problem recognition is the first stage in C.D.M process.
 Problem recognition is the result of a discrepancy between a
desired state and a actual state that is sufficient to arouse
and activate the decision process.
 Eg: Feeling Bored- actual state. Listening music/Call friend –
desired state.
Types of Consumer Problem
 Consumer problem may be either active problem or inactive
problem.
 Active problems only require the marketers to convince
consumers that its brand is the superior solution.
 Inactive problems require the marketer to convince
consumers that they have the problem and the marketers
brand is a superior solution to the problem which is more
difficult task.

Marketing Strategy used problem recognition
 Discover Consumers problem
 Activity analysis
 Product analysis
 Problem analysis
 Responding to Consumer problem
 Helping Consumer recognize problem
 Suppressing problem recognition

 Once problem is recognized relevant information from
long-term memory is used to determine if a satisfactory
solution is known, what are the characteristics of potential
solution are, what are appropriate ways to compare
solutions and so forth- This is called Internal search.
 If a resolution is not reached through internal search, then
external search is focused.
 It is important to note that even in extended decision
making with extensive external search, the initial internal
search generally produces a set of guides or decision
constraints that limit and guide external search.
 Examples of External search: web, books, articles
newspaper, friends etc.

 Types of Information
Evaluative Criteria: The desired characteristics are the
consumers evaluative criteria. Ex: Laptop or Computer
Appropriate Alternative: Here the consumer seeks for
different companies or brand Ex: Dell, HP Asus, Toshiba,
,
Apple, Fuji.
Evoked Set Inert Set Inept Set
Asus
Dell Fuji
Toshiba
HP Apple
These are the Which are Which are not
brands which known but not known
are know very the
well performance

Alternative Characteristics: Here the consumer compares
the different features of the selected evoked set
Ex: price, memory, processor etc.

 When potential consumers have all the necessary internal
and external information on alternatives, they have to
evaluate the alternatives in order to make a purchase.
 Information will lead to an evoked set(familiar brands) of
alternative products from which a choice will then have to
be made.
 Theory of Evoked Set- By Howard and Sheth’s
Total Set Awareness Consideration
Decision Set
(all brands) Set Set
(brands
(brands (brands
decided)
aware off) considered)
Purchase
Set

 Consumers use several attributes when they are evaluating
alternative products and they are more interested in a
specific attribute that brings the sought benefits.
Example: Price, Quality, availability, service, performance
etc
 The number of criteria used in decision making are
relatively limited, usually less than six.
 Also, not all criteria are equally important.
 The criteria used to make a decision change depends on
the consumer, the product, and the situation.

 Consumers generally make three types of purchase:
trial purchase, repeat purchase and long term
commitment purchase.
 Trial purchase would be in smaller in quantity and it would
be also termed as Exploratory phase.
 Repeat purchase is very closely related to brand
loyalty, which firms try to encourage because it
contributes to greater stability in the market share.

 The purchasing process does not end when a consumer buys
a product . After the purchase consumers tend to evaluate
their experience to decide if they are satisfied or
dissatisfied.
 The information will be used in future decision-making.
 The performance of the product or service will be compared
with consumers expectations. There are three possible
outcomes of these evaluations:
 Perceived performance meeting expectations
 Perceived performance exceeding expectations
 Perceived performance being lower than expectations
 When a consumer thinks of the unique, positive qualities of
the brand not selected, it is known as cognitive dissonance.
 When cognitive dissonance occurs Marketing can minimize through:
after a purchase, it is called Effective Communication
Follow-up
post purchase dissonance. Guarantees
Warranties

External Influence
Socio cultural Environment
Firms Marketing Efforts 1. Family I
1. Product 2. Informal sources N
2. Promotion 3. Other non commercial P
3. Price sources U
4. Channel of distribution 4. Social class T
5. Sub culture and culture
Consumer Decision Making
Need Psychological Field P
Recognition 1.Motivation R
Information 2.Perception O
Search 3.Learning C
Evaluation of 4. Personality E
Alternatives 5. Attitude S
Purchase S
Post-purchase
Experience
Purchase
1. Trial
2. Repeat purchase OUT PUT