The Consumer Decision Process

Need Recognition

• Consumer decision process begins when consumers recognize that they have unsatisfied need

  • and that they would like to go from needy state to another state

• need recognition: the beginning of the consumer decision process; occurs when consumers recognize they have an unsatisfied need and want to go from their actual, needy state to a different, desired state

Functional Needs

• functional needs: pertain to the performance of a product or service

  • BMW speeds and performance on motercycles
  • not everyone needs that type of speed; depends on needs of purchaser

Consumer decision process

Psychological Needs

• psychological needs: pertain to the personal gratification consumers associate with a product or service

  • expensive purses, etc.

Search for Information

• Search for information about various options to satisfy that need

• Length and intensity of search based on perceived risk associated with purchasing product or service

  • Haircut important to self-image, etc

Internal Search for Information

• internal search for information: occurs when the buyer examines his or her own memory and knowledge about the product or service, gathered through past experiences

External Search for Information

• external search for information: occurs when the buyer seeks information outside his or her personal knowledge base to make the buying decision
• taling to friends, family, salesperson
• commercial media, television, radio, Google

Factors Affecting Consumers' Search Processes

• Three factors:

The Perceived Benefits versus Perceived Costs of Search

• Is it worth the time and effort to search for information about a product or service?

The Locus of Control

• internal locus of control: refers to when consumers believe they have some control over the outcomes of their actions, in which case they generally engage in more search activities

  • individual stocks

• external locus of control: refers to when consumers believe that fate or other external factors control all outcomes

  • it doesn't matter how much information they gather; good decision - not their credit; bad decision - not their fault
  • mutual funds

Actual or Perceived Risk

• Five types of risks associated with purchased decisions can delay or discourage a purchase:
• performance risk: involves the perceived danger inherent in a poorly performing product or servict
• financial risk: risk associated with monetary outlay; includes the initial cost of the purchase, as well as the costs of using the item or service
• social risk: the fears that consumers suffer when they worry others might not regard their purchases positively
• physiological risk: the fear of an actual harm should a product not perform properly
• safety risk: same as physiological risk
• psychological risk: associated with the way people will feel if the product or service does not convey the right image

Evaluation of Alternatives

• Once consumer explored possible options, they must sift through choices available and evaluate alternatives
• Often occurs when consumer engaged with process of informatoin search

Attribute Sets

• Research has shown consumer's mind organizes and categorizes alternatives to aid decision process

• universal sets: includes all possible choices for a product category

  • unwieldy for a person to recall all possible alternatives for every purchase decision
  • tend to focus on only a subset of choices

• retrieval set: includes those brands or stores that the consumer can readily bring forth from memory

• evoked set: comprises the alternative brands or stores that the consumer states they would consider when making a purchase decision

• When consumers begin to evaluate different alternatives, they base their evaluations on a set of important attributes or ...

• evaluative criteria: consist of a set of salient, or important, attributes about a particular product

• determinant attributes: product or service features that are important to the buyer and on which competing brands or stores are perceived to differ

Consumer Decision Rules

• consumer decision rules: the set of criteria that consumers use consciously or subconsciously to quickly and efficiently select from among several alternatives

Compensatory

• compensatory decision rule: at work when the consumer is evaluating alternatives and trades off one characteristic against another, such that good characteristics compensate for bad ones
• multiple-attribute model: a compensatory model of customer decision making based on the notion that customers see a product as a collection of attributes or characteristics. The model uses a weighted average based on the important of various attributes and performance on those issues.

Noncompensatory

• noncompensatory decision rule: at work when consumers choose a product or service on the basis on one characteristic on one subset of characteristic, regardless of the values of its other attributes

  • organic; for vegans

Postpurchase Cognitive Dissonance

• postpurchase cognitive dissonance: the psychologically uncomfortable state produced by an inconsistency between beliefs and behaviours that in turn evokes a motivation to reduce the dissonance; buyers' remorse
• Generally occurs aftrer expensive purchases
• Make return back product, or to pay attention to positive information, seek positive feedback

Customer Loyalty

• In postpurchase statge of decision-making process, marketers attempt to solidify a loyal relationship with their customers to buy from same company again
• CRM (customer relationship programs) to retain them

Undesirably Consumer Behaviour

• Negative consumer behaviour
• negative word of mouth: occurs when consumers spread negative information about a product, service, or store to others
• Internet has provided an effective method of spreading negative word of mouth