Chapter 6: Consumer Decision Making

The Consumer Decision-Making Process

When buying products, particularly new or expensive items, consumers generally follow this: 1) need recognition, 2) information search, 3) evaluation of alternatives, 4) purchase, and 5) postpurchase behavior. These five steps represent the traditional buying process, which can be used as a guide for studying how consumers make decisions.

How to Reduce Dissonance

1) Seeking information that reinforces the purchase decision. 2) Avoiding information that contradicts the purchase decision. 3) Revoking the original decision by returning the product.

Product Involvement

A type of involvement. Means that a product category has high personal relevance.

Buying Decision

All of these by consumers generally fall along a continuum of three broad categories: routine response behavior, limited decision making, and extensive decision making. Goods and services in these three categories can best be described in terms of five factors.

Stimulus

Any unit of input affecting one or more of the five senses (sight, smell, taste, touch, and hearing).

Extensive Decision Making

Associated with consumer involvement. Consumers practice this when buying an unfamiliar, expensive product or an infrequently bought item.

Routine Response Behavior

Associated with consumer involvement. Frequently purchased, low-cost goods and services are generally associated with this.

Involvement

Associated with consumer involvement. Is the amount of time and effort a buyer invests in the search, evaluation, and decision processes of consumer behavior.

Limited Decision Making

Associated with consumer involvement. Typically occurs when a consumer has a previous product experience but is unfamiliar with the current brands available.

Showrooming

Associated with shopping involvement. Examining merchandise in a physical retail location without purchasing it and then shopping online for a better deal on the same item.

Purchase Decisions

Consumer has to make the following decisions: whether to buy, when to buy, what to buy, where to buy and how to buy.

Evaluation of Alternatives

Consumer is ready to make a decision after creating an evoked set. Consumers evaluate and compare alternatives with the help of: environment, internal information and external information.

Psychological Ownership

Consumers sometimes develop feelings of ownership without even owning the good, service, or brand.

Importance of Understanding Consumer Behavior

Consumers' product and service preferences are constantly changing. Marketing managers must understand theses desires in order to create a proper marketing mix for a well-defined market. Understanding how consumers make purchase decisions can help marketing managers in several ways.

Post-Purchase Behavior

Evaluation and reaction to decision outcome. Includes cognitive dissonance.

Perceived Risk of Negative Consequences

Factor that determines the level of consumer involvement. As the risk increases, so does the consumer's level of involvement. Risks include financial risks, social risks, and psychological risks.

Social Visibility

Factor that determines the level of consumer involvement. Involvement increases as the social visibility of a product increases. The products that make a statement about the user may include cars, jewelry, furniture, and clothing.

Interest

Factor that determines the level of consumer involvement. Involvement is directly related to consumer interests, such as cars, motorcycles, or electronics.

Previous Experience

Factor that determines the level of consumer involvement. When consumers have had previous experience with a product or repeated product trials, the level of involvement typically decreases and quick choices are made.

Evoked Set

Group of brands resulting from an information search from which a buyer can choose. One way to begin narrowing the number of choices in this is to pick a product attribute and then exclude all products in the set that do not have that attribute. Another way to narrow the number of choices is to use cutoffs or minimum or maximum levels of an attribute that an alternative must have. A final way to narrow the choices is to rank the attributes under consideration in order to importance and evaluate the products based on how well each performs on the most important attributes.

Want-Got Gap

Imbalance between actual and desired states. Does not always trigger consumer action because the gap must be large enough to drive the consumer to take some action. Additionally, the marketing manager's have an objective which is to get consumers to recognize the want-got gap.

Cognitive Dissonance

Inner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions.

Unplanned Purchase

Made by consumers on an impulse.

Partially Planned Purchase

Made by consumers when they know the product category they want to buy but wait until they get to the store or go online.

Consumer Involvement

One of the five factors in the three categories of buying decisions. The level of this is perhaps the most significant determinant in classifying buying decisions.

Value

Personal assessment of the net worth one obtains from making a purchase.

Nonmarketing-Controlled Information Source

Product information source that is not associated with promotion. Associated with external information search.

Marketing-Controlled Information Source

Product information source that originates with marketers promoting a product. Associated with external information search.

Internal Information Search

Recalling past information stored in the memory.

Want

Recognition of an unfulfilled need and product that will satisfy it.

Need Recognition

Results of an imbalance between actual and desired states. First stage in the decision making process. Is triggered when a consumer is exposed to either an internal or an external stimulus (usually ads or sales promotions often provide the stimulus).

External Information Search

Seeking information in the outside environment. Relevant to nonmarkting-controlled information source and marketing-controlled information source. Customers seek less information about a product when there is: less risk involved, more knowledge and more product experience, Low level of interest, confidence in the decision taken.

Situational Involvement

Type of involvement. Means that the circumstances of a purchase may temporarily transform a low-involvement decision into a high-involvement one.

Enduring Involvement

Type of involvement. Represents an ongoing interest in some product, such as kitchen gadgts, or activity, such as fishing.

Emotional Involvement

Type of involvement. Represents how emotional a consumer gets during some specific consumption activity.

Shopping Involvement

Type of involvement. Represents the personal relevance of the process of shopping. Many consumers also engage in showrooming.

Perceived Value

Value a consumer expects to obtain from a purchase.

Utilitarian Value

Value derived from a product or service that helps the consumer solve problems and accomplish tasks.

Hedonic Value

Value that acts as an end in itself rather than as a means to an end.