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Consumer Behavior

Hussain A. Al Awami, B.Sc. Pharm., M.Sc., MBA

Consumer Decision Making

Hussain A. Al Awami, B.Sc. Pharm., M.Sc., MBA

Decision, definition
Decision is the selection of an option from two or more alternative choices.
No choice decisions Effect of adding another choice?!

Levels of consumer decision making


Extensive problem solving Limited problem solving Routinized response behavior

Extensive problem solving


No established criteria Large number of alternatives Requires large number of information

Limited problem solving


Establishment of basic criteria Not fully established preferences Searching for fine-tuning information

Routinized response behavior


Previous experience with the product Established set of criteria for evaluation Sometimes additional information needed

Views of consumer decision making

Models of consumer decisions


Economic view Passive view Cognitive view Emotional view

Economic view
Assuming perfect competition and consumers take rational decisions
Aware of all products alternatives Ability of ranking different alternatives Ability to define each product advantages and disadvantages and which best suits.

Passive view
Assumes that consumers are basically submissive to self-serving interests and promotional efforts of marketers. Consumers are impulsive and irrational Sales persons power; ignore the role of buyer!

Cognitive view
Consumers are viewed as: thinking problem solver Consumers searching for products that fulfill their needs Consumers viewed as information processors, and to avoid information overload, they use heuristic approach

Emotional view
Consumers viewed as emotionals Mood play role in decision making Marketers play with mood or emotions

Model of consumer decision making

Inputs
Marketing inputs
Persuade customers to buy

Sociocultural environment
Family, social, cultural, etc

Process
Need recognition
Actual state Desired state

Pre-purchase search
High risk Vs low risk purchases Men Vs womens

Evaluation of alternatives

Evaluation of alternatives

Criteria used for evaluating brands

Consumer decision rules


Compensatory decision rules
Evaluate all attributes Gives weight for each attribute

Non-compensatory decision rules


Consumers dont balance positives with negatives

Non-compensatory decision rules


Conjunctive rule
Consumer establishes minimally acceptable level of each attribute

Disjunctive rule
Same as conjunctive but with higher cutoff points

Lexicographic rule
Consumers ranks attributes as per their relevance and given different weight

Comparison

How illiterate customers decide?

Trial purchase
Customer buy smaller size or less quantity Customer try to avoid risk Marketers use free samples, coupons, or free trials or free test drive Hope results in repeated purchases

Post purchase evaluation


Below expectation Within expectation Exceeding expectation

Relationship marketing
Loyalty programs or CRM Give personal touch with add-on services More successful with high involvement products