ch03

CONSUMER
DECISIONMAKING PROCESS
Copyright 2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour by Karen Webb
Slides prepared by Sarah Fletcher and Morena
Consumer decision-making
process
At the end of this session, you should understand:
The concept of consumers as decision makers

Media and production consumption trends in Australia and be
able to describe and explain a model of consumer decision
making
The influences on the decision-making process
How the concept of involvement influences buying behaviour
The impact of customer relationship marketing strategies and
loyalty schemes on behaviour
The Internet revolution and its influence on buyer behaviour

3-2
Decisions, decisions
You have a wedding to attend and you have to buy
a present and an outfit

Write down the steps that you think you would go
through to make these two purchases
Discuss this with a partner and note any
differences between the processes you identified
and perhaps some of the factors influencing your
decision making
3-3
Decisions and problems
Decision - choice between

alternatives that can
potentially solve a problem
Problem - the difference

between the consumers
actual state and their
desired state
See EXHIBIT 3.2 Another problem-solving
product from Tontine, page 58
PowerPoint slides supplied on the
Instructor Resource CD to accompany
Consumer Behaviour include advertisement
images.

3-4
The problem recognition

process

3-5
Needs
A need is a feeling that

something is missing - may
be emotional or physical in
nature
Utilitarian needs are based
on the functional use
Hedonic needs are based
on emotional benefits
See EXHIBIT 3.4 Palmolive Spa offers the
hedonic benefit of relaxation, page 60.
PowerPoint slides supplied on the
Instructor Resource CD to accompany
Consumer Behaviour include
advertisement images.

3-6
Consumption trends
Relaxation time is important and products or services to enhance

this are sought
Increased demand for one-stop shopping, particularly with aged

market
Intense competition between major retailers for FMCG market
Increased consumer choice and frustration with amount of

choice
Information bombardment at all levels
Consumers seeking more information before making purchases

3-7
Consumption trends (contd.)
18-35 year old males more informed about technology than other
consumers
Women still perform the majority of domestic duties, despite increased

participation in the workforce
Phone and Internet banking becoming increasingly popular
Increased demand for cleaning, gardening and domestic services,

particularly for 35-54 age group
Uncertainty about the future encouraging a spend now mentality, leading to

increased household debt
Suspicion of large corporations, making trusted spokespersons more

important to consumers

3-8
Media consumption trends and

marketing communication
Communication clutter is making the message of
the marketer more difficult to notice or understand
Strategies such as the use of reality television is
giving new success to related industries
e.g. Backyard Blitz and DIY Rescue prompting the sales

of landscaping, gardening, building and decorating
products and services
Increased use of the Internet for communicating to
markets, particularly the younger consumers

3-9
The Internet persuaders Activity

Case in point 3.1
Read the above case study and discuss the
associated questions
Discuss

310
The decision-making process

Types of decisions
Extended search decisions
Limited search decisions
Likely to involve a high level of time and effort in information

search, expense and risk
Product or brand substitution is unlikely e.g. house, car
Involves some search but the buyer may settle for a
substitute
These purchase items are known as shopping goods e.g.
digital camera
Habitual or routine decisions
Everyday purchases that are difficult to influence or change

e.g. milk or bread

311
Types of consumer decisions

and extent of problem solving

312
Marketing tactics
High-involvement decisions
Ensure information is readily available
Low-involvement decisions
Plan point of purchase reminders and in store promotions

Link the low involvement situation, e.g. tissues, with an
emotional appeal to create an association with the
product
Marketing stimuli are more noticeable if they:
Fit with an individual's existing beliefs and values

Are trustworthy and believable
Are related to current needs
Do not create risk
Are easy to understand

313
The complex process of

consumer decision making

314
Appealing to needs
See EXHIBIT 3.5 Jeep appeals to the need for freedom
on page 70 and EXHIBIT 3.8 Appealing to an unmet
need for migraine relief, page 71.
PowerPoint slides supplied on the Instructor Resource
CD to accompany Consumer Behaviour include
advertisement images.

315
Search and involvement

Involvement
The amount of physical and mental effort and search

that a consumer puts into a decision
This effort is influenced by the level of importance of the
decision e.g. emotional or financial risk
Types of involvement
Situational e.g. wedding outfit

Enduring involvement, a more permanent involvement
reflected across a range of decisions e.g. a consumers
self perception as a fashionable wealthy person will
influence all purchase decisions

316
Involvement
Factors influencing involvement:
Personal involvement
Situation involved in at the time of purchase
Social visibility
Perceived risk of negative consequences
Previous experience
As decision making becomes more complex,
consumers rely more on previous experience,

knowledge, attitudes and the advice of others and
less on available information
317
Searching
Searching
May take months or less than a second
Factors that influence additional search include:

Belief that current known brands are inadequate
More information on known brands is required
Friends or other information sources provide messages that conflict with
current knowledge
A high degree of risk is involved and consumers require confirmation of
their decisions
Internal search
External search
Memory e.g. past purchases

Internet, printed media, advertising, friends and others
Market mavens
Actively seek information on topics of interest

318
The internal search process

and decision alternatives

319
Costs and benefits influence

commitment to search

320
Evaluation
Evaluation
Consumers try to determine how well a product or

service satisfies a particular need
Marketers determine what is important to consumers
to ensure their products are different, distinct and best
satisfy the need
Critical attributes
Compensatory evaluation
The product attributes that the consumer perceives as

most important
When alternatives exist, consumers decide the benefits
of all offerings in order to make a decision
Non-compensatory evaluation
Comparison of alternatives against specific criteria

321
Purchase and post purchase

behaviour
Where to spend?
Retailer vs supplier
Increased use of Internet and catalogue direct mail
shopping
Personal shopping as an experience
Happy or unhappy with purchase?
Post-cognitive dissonance
The uncomfortable post-purchase state that may exist

when a choice between alternatives has been made
Increases with the level of financial or emotional risk
involved in the decision
Marketers can provide information to satisfy consumers
seeking post-decision reinforcement

322
Customer relationship
management
Gaining maximum value from marketing relationships with

customers
Profitability is higher with long-term existing customers as
opposed to constantly seeking new customers with
marketing efforts
For example:
Regular car wash customers are encouraged by personal
contact with car wash manager or staff to upgrade to a regular
wax and vacuum for a discounted price
Relationships can also be built with the cleaning products
suppliers, to ensure good prices, and the staff, to ensure they
are friendly and efficient
Alternatively, the firm could increase advertising but may not
increase sales enough to cover the cost of the advertising

323
Loyalty marketing schemes

Loyalty schemes are designed to obtain repeat
business from customers e.g. FlyBuys and

Frequent Flyers programs
Loyalty may or may not be obtained in the long run
Rather than loyalty, a scheme may result only in
short-term repeat business
Carefully targeted direct marketing is often a more
effective means of building relationships with
consumers
324
The Internet revolution and

buyer behaviour
It is generally accepted that the Internet makes life easier for

consumers
The Internet is still in the introduction phase of the Product
Life Cycle
Internet sites must work to reinforce the consumers decision
Personal shopping experiences such as personal attention
must be recreated in the online environment
Emotional and functional needs must be met by online
shopping
Security and the ability to seek further information are still
issues
A personal presence, such as the direct sales representative
contact telephone numbers or email address, are important

325
Six segments of Internet users
Simplifiers
Surfers
A segment of consumers who are new to the Internet, investigate

ways to purchase, but prefer the security of offline purchasing
Routiners
This group are after the best deal they can get online
Connectors
A small group who spend a lot of time online, enjoy searching, but
are not particularly loyal
Bargainers
Do not spend long online and want quick, reliable transactions
Do not visit many sites, preferring to use only a small number
Sporters
Use a small number of sport and entertainment sites

326
Quiz time
What is meant by:
Market mavens
Utilitarian needs
Hedonic needs
External searches
Compensatory evaluation
Post-cognitive dissonance
Problems
Needs
Limited search decisions
High involvement decisions
Critical attributes
Surfers

327

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CONSUMER

The concept of consumers as decision makers

Copyright 2005 McGraw-Hill Australia Pty Ltd

a present and an outfit

Decisions and problems

Decision - choice between

Problem - the difference

Copyright 2005 McGraw-Hill Australia Pty Ltd

The problem recognition

Copyright 2005 McGraw-Hill Australia Pty Ltd

A need is a feeling that

Copyright 2005 McGraw-Hill Australia Pty Ltd

Relaxation time is important and products or services to enhance

Increased demand for one-stop shopping, particularly with aged

Intense competition between major retailers for FMCG market

Increased consumer choice and frustration with amount of

Information bombardment at all levels

Consumers seeking more information before making purchases

Copyright 2005 McGraw-Hill Australia Pty Ltd

Consumption trends (contd.)

Women still perform the majority of domestic duties, despite increased

Phone and Internet banking becoming increasingly popular

Increased demand for cleaning, gardening and domestic services,

Uncertainty about the future encouraging a spend now mentality, leading to

Suspicion of large corporations, making trusted spokespersons more

Copyright 2005 McGraw-Hill Australia Pty Ltd

Media consumption trends and

the marketer more difficult to notice or understand

Strategies such as the use of reality television is

giving new success to related industries

e.g. Backyard Blitz and DIY Rescue prompting the sales

Increased use of the Internet for communicating to

markets, particularly the younger consumers

The Internet persuaders Activity

Copyright 2005 McGraw-Hill Australia Pty Ltd

The decision-making process

Extended search decisions

Limited search decisions

Likely to involve a high level of time and effort in information

Habitual or routine decisions

Everyday purchases that are difficult to influence or change

Copyright 2005 McGraw-Hill Australia Pty Ltd

Types of consumer decisions

Copyright 2005 McGraw-Hill Australia Pty Ltd

Ensure information is readily available

Plan point of purchase reminders and in store promotions

Marketing stimuli are more noticeable if they:

Fit with an individual's existing beliefs and values

Copyright 2005 McGraw-Hill Australia Pty Ltd

The complex process of

Copyright 2005 McGraw-Hill Australia Pty Ltd

Copyright 2005 McGraw-Hill Australia Pty Ltd

Search and involvement

The amount of physical and mental effort and search

Situational e.g. wedding outfit

Copyright 2005 McGraw-Hill Australia Pty Ltd

As decision making becomes more complex,

consumers rely more on previous experience,

May take months or less than a second

Factors that influence additional search include:

Memory e.g. past purchases

Actively seek information on topics of interest