Consumer Decision Making

Consumer Decision Making

1. Consumer Behavior

   • Process a consumer uses to make purchase decisions, factors that influence purchase and product use

2. CONSUMER DECISION MAKING PROCESS

   • 5 Step process used by consumers when buying goods/services
     • 1. Need recognition 2. Info search 3. Evaluation of alternatives 4. Purchase 5. Post-purchase behavior
   • NEED RECOGNITION
     • Result of the imbalance between actual and desired states
       • Activates the consumer decision making process
     • WANT
       • Recognition of an unfulfilled need and a product that will satisfy it.
     • STIMULUS
       • Anything that affects 1 or more of the 5 senses
         • Internal
           • Hunger, thirst, etc.
         • External
           • Promos, ads, brand, design, etc.
     • INFORMATION SEARCH
       • Information abour various alternatives to satisfy need/want
         • INTERNAL INFO SEARCH
           • Recalls info stored in memory
         • EXTERNAL INFO SEARCH
           • Seeks info in environment or surroundings
       • EVALUATION OF ALTERNATIVES & PURCHASE
         • Purchase decision is a pecemeal process, that is that advantages & disadvantages of the product are evaluated.
           • Wheter to buy; when/what/where to buy; how to pay.
             • FULLY PLANNED PURCHASE
               • Expensive and complex item (such a car)
             • PARTIALLY PLANNED PURCHASE
               • Items that people pick up at the store (such as clothing)
             • UNPLANNED PURCHASE
               • Items people buy because of impulse
         • POST PURCHASE BEHAVIOR
           • Satisfaction/Dissatisfaction
             • COGNITIVE DISSONANCE: Inner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions.
               • Consumers try reducing dissonance by justifying their decision.
       • NON MARKETING-CONTROLLED INFO SOURCE
         • An info source not associated with marketing
           • Personal experiencies, products via word of mouth
       • MARKETING-CONTROLLED INFO SOURCE
         • Product info source originated by promotion or marketing

3. TYPES OF CONSUMER BUYING DECISIONS

   • ROUTINE RESPONSE BEHAVIOR
     • Consumers buying frequently purchased, low cost goods/services. Requires little search and little decision time.
   • LIMITED DECISION MAKING
     • Happens when consumer has previous product experience, but is unfamiliar with current brands.
   • EXTENSIVE DECISION MAKING
     • When buying unfamiliar expensive product, or infrequently bought item such as a car. Requires more time to decide the purchase.

4. CONSUMER INVOLVEMENT

   • Amount of time and effort a buyer invests in search, evaluation, and decision process of consumer behavior.
   • FACTORS DETERMINING LEVEL OF INVOLVEMENT
     • TYPES OF INVOLVEMENT
       • PRODUCT
         • SITUATIONAL
           • SHOPPING
             • ENDURING
               • EMOTIONAL
                 • How emotional a consumer gets during some specific consumption activity.
               • Always searching an opportunity to buy a product.
             • Shop on a mission
           • Circumstances dictate the level of involvement.
         • Product category has high personal relevance.
     • Previous experience
       • The more experience, the less level of involvement,
       • Interest
         • Social Visibility
           • Perceived risk of negative cosequences
             • The more risk, the more involvement.
               • Financial risk (exposure to loss of wealth or purchasing power); Social risk (consumers buy products that can affect social opinion of them); Psychological risk (anxiety while buying).
           • The more social visibility, the more involvement there is. (Jewels, cars, furniture)
         • Involvement is directly related to the consumer interests

5. INFLUENCES ON CONSUMER BUYING DECISIONS

   • SOCIAL INFLUENCE
     • CULTURAL INFLUENCE
       • CULTURE:
         • Set of values, norms, attitudes, that shape human behavior.
           • It is persuasive, functional, dynamic, and learned
         • VALUE
           • Enduring belief
           • SUBCULTURE
             • SOCIAL CLASS
               • Group of people in the same economical status.
             • Homogeneous group of people sharing elements of culture and of their own.
     • INDIVIDUAL INFLUENCE
       • PSYCHOLOGICAL INFLUENCE
         • PERCEPTION
           • MOTIVATION
             • ATTIUDE
               • BELIEFS
       • GENDER
         • AGE
           • PERSONALITY
             • SELF CONCEPT
               • IDEAL/REAL SELF IMAGE
     • REFERENCE GROUP
       • OPINION LEADERS
         • FAMILY