Consumer Decision Making

2014

-CONSUMEE BEHAVIOUR -- PGDM 2014

PROF. MOHAN B.RAO
FOR RESTRICTED CIRCULATION ONLY

The Give and Get of Marketing

2014

-CONSUMEE BEHAVIOUR -- PGDM 2014

PROF. MOHAN B.RAO
FOR RESTRICTED CIRCULATION ONLY

Wordof- Mouth

Stages in Consumer Decision

Process
Awareness

Advertising

Interest

Channel
Decision
Product /
Service
Action
Price
Satisfaction
2014

-CONSUMEE BEHAVIOUR -- PGDM 2014

PROF. MOHAN B.RAO
FOR RESTRICTED CIRCULATION ONLY

The New View of Marketing

Four principles guide marketing:

2014

retention: keeping them coming back

referrals: encourage them to recommend us
relationships: build an emotional connection
recovery: solve problems as they arise

-CONSUMEE BEHAVIOUR -- PGDM 2014

PROF. MOHAN B.RAO
FOR RESTRICTED CIRCULATION ONLY

Consumer Problem-Solving Categories

Levels of Consumer Decision Making
Extensive Problem
Solving

Limited Problem
Solving
Routinized
Response Behavior
2014

-CONSUMEE BEHAVIOUR -- PGDM 2014

PROF. MOHAN B.RAO
FOR RESTRICTED CIRCULATION ONLY

Consumer Mind?????
STIMULUS
FIRM
CONTROLLED
PRODUCT
PRICE
ADVERTISING
SALES PERSON
DISPLAY
DISTRIBUTION

BUY

MIND

RESPONSE

NO BUY

SOCIAL
WORD OF MOUTH
REFERENCE GROUP

2014

-CONSUMEE BEHAVIOUR -- PGDM 2014

PROF. MOHAN B.RAO
FOR RESTRICTED CIRCULATION ONLY

Schiffman Model Of Consumer Decision

Making
EXTERNAL INFLUENCES
SOCIO CULTURAL

FIRM
INPUTS

P
R
O
C
E
S
S

oFamily
oInformal Sources
oOther non-commercial sources
oSocial Class
oSubculture& culture

oProduct
oPrice
oPromotion
oDistribution

CONSUMER DECISION MAKING

Psychological Field
Need Recognition
Pre-purchase Search
Evaluation Of Alternatives

*Motivation* Perception *Learning *Personality*Attitudes

EXPERIENCES

POST-DECISION BEHAVIOR
OUTPUT
2014

PURCHASE
Trial
Re-purchase

Post Purchase Evaluation

-CONSUMEE BEHAVIOUR -- PGDM 2014
PROF. MOHAN B.RAO
FOR RESTRICTED CIRCULATION ONLY

Factors that are Likely to Increase

Prepurchase Search
Product Factors
Long inter purchase time (a long-lasting or
infrequently used product)
Frequent changes in product styling
Volume purchasing (large number of units)
High price
Many alternative brands
Much variation in features
2014

-CONSUMEE BEHAVIOUR -- PGDM 2014

PROF. MOHAN B.RAO
FOR RESTRICTED CIRCULATION ONLY

Factors that are Likely to Increase

Prepurchase Search
Experience
continued
First-time purchase
No past experience because the product is new
Unsatisfactory past experience within the product category
Social Acceptability
The purchase is for a gift
The product is socially visible
Value-Related Considerations
Purchase is discretionary rather than necessary
Al alternatives have both desirable and undesirable consequences
Family members disagree on product requirements or evaluation of
alternatives
Product usage deviates from important reference group
The purchase involves ecological considerations
Many sources of conflicting information
2014

-CONSUMEE BEHAVIOUR -- PGDM 2014

PROF. MOHAN B.RAO
FOR RESTRICTED CIRCULATION ONLY

Factors that are Likely to Increase

Prepurchase Search
continued
Product Factors
Demographic Characteristics of Consumer
Well-educated
High-income
White-collar occupation
Under 35 years of age
Personality
Low dogmatic
Low-risk perceiver (broad categorizer)
Other personal factors, such as high product involvement and
enjoyment of shopping and search

2014

-CONSUMEE BEHAVIOUR -- PGDM 2014

PROF. MOHAN B.RAO
FOR RESTRICTED CIRCULATION ONLY

10

Issues in Alternative Evaluation

Evoked Set

The number of brands that a consumer actually considers in making a purchase decision.

Criteria Used for Evaluating Brands

Features the consumer considers in making a choice among alternatives

Consumer Decision Rules

Lifestyles as a Consumer Decision Strategy
Incomplete Information and Noncomparable
Alternatives
Series of Decisions
Decision Rules and Marketing Strategy
Consumption Vision
2014

-CONSUMEE BEHAVIOUR -- PGDM 2014

PROF. MOHAN B.RAO
FOR RESTRICTED CIRCULATION ONLY

11

The Evoked Set as a Subset of All

Brands in a Product Class
All
Brands
Known
Brands

Unknown
Brands
(1)

Evoked Set

Acceptable
Brands

Purchased
Brands
2014

Inept Set

Unacceptable
Brands

Inert Set

Indifferent
Brands

Overlooked
Brands

Not Purchased
Brands
-CONSUMEE BEHAVIOUR -- PGDM 2014
PROF. MOHAN B.RAO
FOR RESTRICTED CIRCULATION ONLY

12

Types of Purchases
Trial
Purchases

Repeat
Purchases

Long-Term
Commitment
Purchases
2014

-CONSUMEE BEHAVIOUR -- PGDM 2014

PROF. MOHAN B.RAO
FOR RESTRICTED CIRCULATION ONLY

13

Marketing Strategy and Consumer Behavior

Outcomes
Individual
Firm
Society
Consumer decision process
Problem Recognition
Information Search
Alternative Evaluation
Purchase
Use
Evaluation
Marketing strategy
Product, Price, Distribution,
Promotion, Service
Marketing segmentation
Identify product-related need sets
Group Customers with similar need sets
Describe each group
Select attractive segment(s) to target
Marketing analysis
Company Competitors Conditions Consumers
2014

-CONSUMEE BEHAVIOUR -- PGDM 2014

PROF. MOHAN B.RAO
FOR RESTRICTED CIRCULATION ONLY

14

What is Customer satisfaction!

1-3

Firms total
product
Competitors
total product

2014

Consumer
decision
process

Superior
value
expected

Sales

-CONSUMEE BEHAVIOUR -- PGDM 2014

PROF. MOHAN B.RAO
FOR RESTRICTED CIRCULATION ONLY

Perceived
value
delivered

Customer
satisfaction

15

Consumer Behavior is
ProductPersonSituation Specific
1-4
Personal
characteristics

Consumer
behavior

Product
characteristics

Marketing
strategy

Consumption
situation
2014

-CONSUMEE BEHAVIOUR -- PGDM 2014

PROF. MOHAN B.RAO
FOR RESTRICTED CIRCULATION ONLY

16

Hawkins Model of Consumer Behavior

1-5
EXTERNAL INFLUENCES
Culture
Subculture
Demographics
Social Status
Reference Groups
Family
Marketing Activities

INTERNAL INFLUENCES
Perception
Learning
Memory
Motives
Personality
Emotions
Attitudes
2014

Experiences and
& acquisitions
Experiences
Acquisitions

SITUATIONS
Problem
Recognition
Information
Search

SELF-CONCEPT
and
LIFESTYLE

Needs

Alternative Evaluation
and Selection

Desires

Experiences & acquisitions

Outlet Selection
and Purchases

Post purchase
Processes
SITUATIONS

-CONSUMEE BEHAVIOUR -- PGDM 2014

PROF. MOHAN B.RAO
FOR RESTRICTED CIRCULATION ONLY

17

A Consumption model
Choice or Purchase Decision

Input

Process of
Consuming
and
Possessing

Consumption Set
Added to ones assortment or portfolio
Consuming Style
How the individual fulfills his or her
consumption requirements

Consuming and Possessing Things and Experiences

Using, Possessing, Collecting, Disposing
Feelings, Moods, Attitudes, Behavior

Output
2014

Altered consumer satisfaction, change in lifestyle and/or

quality of life, learning and knowledge, expressing and
entertaining oneself
-CONSUMEE BEHAVIOUR -- PGDM 2014
PROF. MOHAN B.RAO
FOR RESTRICTED CIRCULATION ONLY

18