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A MODEL OF CONSUMER DECISION MAKING The process of consumer decision making has 3 stages: input stage, process stage

and output stage. The input stage influences the consumers recognition of a product need and consists of 2 major sources of information: 1) the companys marketing efforts (product,price, promotion and price) and the external sociological influences on the consumer (family,friends,neighbors other informal and non-commercial sources,social class and cultural and subcultural memberships). The firms mktg activities are a direct attempt to reach, inform,and persuade consumers to buy and use its products. The mktg mix consist of the product itself including the package, size, and guarantees;mass media advertising, direct marketing, personal selling and promotional efforts; pricing policy and the selection of distribution channels to move the product from the manufacturer to the consumer. (i)The impact of the firms mktg efforts in large measure is governed by the consumers perception of these efforts. Thus, marketers do well to remain diligently alert to consumer perceptions by sponsoring consumer research. (ii) the 2nd type of input, sociocultural environment, also exerts a major influence on consumer for example, the comments of a fiend, an editorial in the newspaper, usage by a family member, an article in Consumer Report or views of experienced consumers participating in a special-interest discussion groip on the internet are all non-commercial sources of information. The influences of social class, culture, are impt input factors that are internalized and affect how consumers evaluate and ultimately adopt or reject products.the unwritten codes of conduct communicated by culture subtly indicate which consumption behaviour should be considered right or wrong at a particular point in time. Therefore, the cumulative impact of each firms mktg efforts, the influence of family,friends and neighbors and societys existing code of behaviour are all inputs that are likely to affect what consumers purchase and how they use what they buy. The process stage of the model focuses on how consumers makes decisions. The psychological factors represents the internal influences in each individual (motivation, perception, learning, personality and attitudes) that affect consumers decision-making processes (what they need or want, their awareness of various product choices, their information gathering activities and their evaluation of alternatives.The act of making a consumer decision consists of three stages (i)consumers need recognition,(ii) prepurchase search for information and (iii) evaluation of alternatives. (i)The need recognition is likely to occur when a consumer is faced with a problem. Ex. Need of laptop when u are on the move. Among consumers, there seem to be 2 different

need or problem recognition styles. Some are actual state types; who perceive that they have a problem when a product fails to perform satisfactorily (eg.if phone does not have clear line); in contrast, other consumers are desired state types, for whom the desire for something new may trigger the decision process.Eg. Dave. (ii) Prepurchase search search begins when a consumer perceives a need that might be satisfied by the purchase and consumption of a product.The recollection of past experiences might provide the consumer with adequate information to make the present choice. On the other hand, when the consumer has no other prior experience, he will engage in an extensive search of the outside environment for useful info on which to base a choice.Past experience is considered an internal source of info. Many consumer decisions are based on the combination of past experience (internal sources) and mktg and noncommercial info (external sources). In high risk perceived situations, consumers are ikely to engage in complex and extensive info search and evaluation; in low risk situations, they are likely to use very simple or limited search and evaluation tactics. The act of shopping is an impotant form of external information. In research shows, women and men hv big difference to shopping response. Men do not like it. It is found search external effort on purchase differs in product categories.the external search effort was greatest for consumers who had the least amt of product category knowledge. It follows that the less consumers know abt a product category and the more important the purchase is to them, the more time they will make available and the more extensive their prepurchase search activity is likely to be. Conversely, research studies hv indicated that consumers high in subject knowledge rely on their own evaluations than on dealer recommendations. It is also impt to point that the internet has had great impact on prepurchase search, rather than visiting a store to find out abt a product. Evaluation of Alternatives When evaluating potential alternatives, consumers tend to use 2 types of information: (i) a list of brands or models from which they plan to make their selection(the evoked set) and (ii) the criteria they will use to evaluate each brand or model. Evoked set(consideration set) refers to the specific brands or models a consumer considers in making a purchase within a particular product category. Inept set consists of brands or models the consumer excludes from purchase consideration because they are felt to be unacceptable or inferior. Inert set are brands or models the consumer is indifferent toward because they are perceived as not having any particular advantages. Evoked set tends to be quite small on average.It is essential that a product be part of consumers evoked set if it is to be considered at all.There are 5 positions in the model that do not end in purchase. They appear to have perceptual problems(i) brands may be unknown bcoz of the consumers selective exposure

to advertising media (ii) brands may be unacceptable bcoz of poor qualities or attributes or inappropriate positioning in either advertising or product characteristics (iii) maybe perceived as not having any special benefits (iv) maybe overlooked bcoz they hv not clearly positioned or targeted at consumer mkt segment (v) not selected bcoz perceived as unable to satisfy perceived needs. In the above instances, the implication for marketers is that promotional techniques shld be designed to impart a more favourable, more relevant product image to the target consumer. This may also require a chg in product features or attributes. Criteria used for Evaluating Brands Usually product attributes- interestingly, the right attribute of product is not price; not brand names but it just feel right origin of product (eg.USA). Researches shows brand credibility(trustworthiness) i.e the perceived quality of the brand, perceived risk associated with the brand and the information costs saved with the brand (no need to shop) hv impact on consumers. The output stage of the consumer decision-making model consists of two closely related postdecision activities:purchase behaviour and postpurchase evaluation. Purchase Behavior Consumers make 3 types of purchases: trial purchase, repeat purchases and long term commitment purchases. When a consumer purchase a product/brand for the first time and buys a smaller quantity than usual, this purchase wld be considered a trial. A trial is exploratory phase of purchase behaviour in which consumers attempt to evaluate a product through direct use (eg.small pack detergent;free samples, coupons or buy at sale price) When a trial product is satisfactory, consumers are likely to repeat the purchase. Repeat purchases behavior is closely related to the concept of brand loyalty. Repeat purchase usually signifies that the product meets the consumers approval.Long term commitment purchases can result from consumers that are satisfied with the brand. Perceived being a good brand is important especially for durable goods like fridge, washing machines coz there is no opportunity of trial purchase. Postpurchase Evaluation As consumers use a product, particularly during a trial purchase, they evaluate its performance in light of their own expectations. There are 3 possible outcomes of these evaluations: (i) (ii) Actual performance matches expectations leading to neutral feeling Performance exceeds expectations, causing what is known as positive disconformation of expectations(which leads to satisfaction) and

(iii)

Performance is below expectations causing negative disconfirmation of expectations and dissatisfaction

For each of these 3 outcomes, consumers expectations and satisfaction are closely linked; that is consumers tend to judge their experience against expectations when performing a postpurchase evaluation. Consumers wants to reduce uncertainty or doubt they might have about their selection. They try to reassure themselves that their choice was wise one. They attempt to reduce postpurchase cognitive dissonance (cognitive dissonance theory says discomfort or dissonance occurs when a consumer holds conflicting thoughts abt a belief or an attitude object); they may rationalize their decision by: seeking advertisements that support their choice; they may attempt to persuade friends to buy the same brand(thus confirming their choice) or turn to other satisfied customers for reassurance. The degree of postpurchase analysis that consumers undertake depends on the importance of the product decision and the experience acquired in using the product. When the product lives up to expectations, they probably will buy again. A satisfied customer is one who feels that he or she has received value which implies getting benefits of the purchase item. The decision to do nothing A consumer may go thru the entire purchase decision-making process and decide not to buy or not to switch from one brand or service to another. In a study, it was found confidence was the number one reason for staying with same brand for New Zealanders. Information overload can be another reason why consumer elects to do nothing. They are overwhelmed with choice and info leads to confusion which result in abandonment of purchase decision, posphonement, seeking more info or delegating the decision to someone else.

Quiz 2

You have just received a birthday present from your father. He gave you RM 1500 for you to purchase a new handphone. Please analyse your decision making according to the Consumer Decision Making Model stating the various input processes and output. As guideline; What are the factors you consider? Who are your influencers? What is your needs/motivations/perception of the brand? How do you get the information? How do you evaluate the information? What would make you happy after buying the phone?

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