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CONSUMER DECISION MAKING

TYPES OF CONSUMER DECISIONS

|

Purchase involvement is the level of concern for,

or interest in, the purchase process.
Product Involvement is the level of concern for, or
interest in product

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TYPES OF DECISION MAKING

1.

Nominal Decision Making

Brand Loyal Purchases

Repeat Purchases

2.

Limited Decision Making

3.

Extended Decision Making

g

TYPES OF DECISION MAKING

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|

Nominal Decision MakingMaking- It involves no decision

Nominal decisions occur when there is very
y low
involvement with the purchase.
A completely nominal decision does not even include
consideration of the do not purchase alternative.

Consumer buys Campbells without

considering other brands, its price,
etc.

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TYPES OF DECISION MAKING

|

Limited decision making involves internal

and limited external search, few
alternatives,
lt
ti
simple
i l decision
d i i rules
l on a
few attributes, and little post purchase
evaluation.
Middle ground between nominal and
extended decision making.
Involves recognizing a problem for which
there are several possible solutions.
Decision based only on
buying the cheapest rolls.

TYPES OF DECISION MAKING

|

Extended decision making

involves extensive internal and
external search followed by a
complex evaluation of multiple
alternatives.
It is a response to the high level
of purchase involvement.
During post-purchase evaluation,
doubts are likely and a thorough
evaluation takes place.

Emotional decisions may involve

substantial cognitive effort.

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Types of Consumer Decisions

CONSUMER DECISION MAKING PROCESS

Environmental
Influences
Cultural, social class,
Reference groups
personal characteristics

Marketer activities

Problem recognition

External Search

Information Search

Internal Search

Evaluation of
alternatives

Evaluative criteria

Formation of
intentions

Attitude formation

Purchase

Product/brand choice
Dealer choice
Purchase timings,
trial

Post-purchase
experience

Repeat purchase
Revised choice
criterion

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Problem
recognition

Why do I need it?

Information search

What exactly is this product?

Evaluation of
alternatives

What options are available?

Purchase decision

How exactly does purchase happen?

Post purchase
behavior

Did I make the right choice?

Stage 1: Need Recognition

Actual state

difference

Desired state

Problem
recognition

Perceived difference between an ideal state and actual state

motivates the consumer to take actions.

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This ad attempt to influence the desired state by

showing that you can get much more from your
moisturizer

The Process of Problem Recognition

Types of Consumer Problems

Active Problem
An active problem is one the
consumer is aware of or will
become aware of in normal
course of events.

Inactive Problem
An inactive problem is one of
which the consumer is not
aware.

Marketing strategy:
strategy

Marketing
g strategy:
strategy
gy

Only require marketer to

convince consumers that its
brand is the superior
solution.

Marketer must convince

consumers that they have the
problem AND that their
brand is a superior solution.
14-12

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MARKETING STRATEGY AND PROBLEM

RECOGNITION

1.

Discovering Consumer Problems

2.

Responding to Consumer Problems

3.

Helping Consumers Recognize Problems

4.

Suppressing Problem Recognition

Marketing Strategy and Problem

Recognition
Discovering Consumer Problems

Surveys and
S
d focus
f
groups use one off the
th following
f ll i approaches
h to
t
problem identification:
1. Activity Analysis

Focuses on a particular activity to determine what

problems consumers encounter during the
performance of the activity.

2. Product Analysis

Examines the purchase or use of a particular

product or brand. Consumers may be asked about
problems associated with using a product or brand.

3. Problem Analysis

Starts with a problem and asks which activities,

products, or brand are associated with (or perhaps
could eliminate) those problems

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Marketing Strategy and Problem

Recognition
Responding to Consumer Problems
Once a consumer problem
O
bl
is
i identified,
id tifi d the
th manager may structure
t
t
the
th
marketing mix to solve the problem.
This can involve:

Developing a new product or altering an existing one

Modifying channels of distribution

Changing pricing policy, or

Revising advertising strategy

Marketing Strategy and Problem

Recognition
Helping Consumers Recognize Problems

G
Generic
i versus Selective
S l ti P
Problem
bl
R
Recognition
iti
Generic Problem
Recognition

Selective Problem
Recognition

Involves a discrepancy only

one brand can solve

Firms attempt to cause

selective problem
recognition to gain or
maintain market share

Involves a discrepancy
that a variety of brands
within a product category
can reduce
Increasing generic
problem recognition
generally results in an
expansion of the total
market

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Marketing Strategy and Problem

Recognition
Suppressing Problem Recognition
Occasionally information is introduced in the market place that triggers
problem recognition that some marketers prefer to avoid.
Marketers do not want their current customers to recognize problems
with their brands. (Smoking)

QUESTIONS?
|

How would you activate problem recognition

among college students for the following?
A gourmet pizza restaurant
Using a designated driver if drinking

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STAGE 2: INFORMATION SEARCH

Process of recalling past

Process of recalling past

Internal
Internal information stored
information stored
ininthe
thememory.
memory.
Process of seeking

P
Process
off seeking
ki
External
E
l
External
information
informationininthe
the
outside
outsideenvironment.
environment.

TYPES OF INFORMATION SOUGHT

|

Consumer decisions require information about:

Appropriate evaluative criteria

The existence of various alternatives

Performance of each alternative on each evaluative

criterion

10

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TYPES OF INFORMATION SOUGHT

Information Search

TYPES OF INFORMATION SOUGHT

11

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Evoked Set
IBM
Apple
Compaq

Awareness
A
Set
IBM
Apple
Toshiba
Compaq
HP
Fujitsu
Sony

Inert Set
Toshiba
Sony
HP

Inept Set
Fujitsu

TOTAL SET

AWAERENESS SET

Evoked set

Purchase Decision

12

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Sources of Information
Five primary sources of information available to
consumers:
Memory of past searches, personal experiences, and lowlowinvolvement learning
Personal sources
sources,, such as friends, family, and others.
Independent sources
sources,, such as magazines, consumer
groups, and government agencies
Marketing sources
sources,, such as sales personnel, websites,
and advertising
Experiential sources,
sources, such as inspection or product trial

Marketing Strategies Base on

Information Search Patterns
Sound marketing strategies take into account the nature of
information search prior to purchase.
Two dimensions of search are particularly appropriate:
1. The type of decision influences the level of search,
and
2. The nature of the evoked set influences the direction
of the search

13

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Marketing Strategies Based on

Information Search Patterns
Six marketing strategies based on search patterns:
1.

Maintenance Strategy

2.

Disrupt Strategy

3.

Capture Strategy

4.

Intercept Strategy

5.

Preference Strategy

6.

Acceptance Strategy

Marketing Strategies Based on

Information Search Patterns

14