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Learning Outcomes
This lecture note covers the following learning outcome: LO2 - Outline and explain the steps in a range of consumer decision making processes.
Agenda
Consumer Decision Making Process Alternative forms of decision making Heuristics Decision rules
Information Research
Information Evaluation Decision
Awareness set
During this stage consumers usually compare products based on their various features and benefits using the information from the previous stage.
Identifying alternatives
All Alternatives
Retrieved set
Evoked Set
Inert Set
Inept Set
Characteristics of the consumer, the circumstances of the decision and social context all play a part in the decision making process. Everyday purchases do not require such a formal process, e.g. Buying a regular FMCG good like flour.
Attitudes of others
Purchase intention
Evaluation of alternatives
This is a belief held by the consumer that he or she will have to face negative consequences by purchasing a particular product. There are several types of perceived risk: 1.Functional risk 2.Physical risk 3.Financial risk 4.Social risk 5.Psychological risk 6.Time risk Consumers have strategies to deal with perceived risk such as decision avoidance, preference for warranties and seeking advice from friends.
Keeping the communication with the consumer even after the purchase, helps to minimise dissatisfaction. For example, marketers can encourage buyers to make suggestions for improvement, provide how to use booklets etc.
The factors that differentiates these methods are level information search, degree of prior experience, amount of perceived risk, time pressure and frequency of purchase.
Heuristics
Day to day life is filled with decisions ,whether it is your breakfast cereal or what radio station to listen to. In decision making consumers seek the assistance of heuristics. Researches have identified that in low involvement decision making consumers rely on heuristics. i.e. rules of thumb or mental short cuts. For example, Bob has decided to buy a shirt at his usual store named X .This decision is driven by his belief that this store thinks it has the best range and its brand gives him confidence. Therefore Bob is ignoring any information search about competitors or substitute products. His assumption about X acted as a shortcut that removed a few steps from the decision making process.
Heuristics
For a marketer, understanding heuristics is an advantage that helps them forecast consumers behaviour when purchasing their brand. In this lecture note three main heuristics are described: The Representativeness Heuristic The Availability Heuristic The Anchoring and Adjustment Heuristic
Decision rules
Information processing strategies of consumers are called decision rules. These help a person in the decision making process by providing guidelines for complex decisions. They can be used to evaluate various options and reduce the risk involved in the decision. Decision rules can be classified into two categories : Compensatory Decision Rules Noncompensatory Decision Rules
Decision rules
Noncompensatory Decision Rules Conjunctive Decision Rule Here consumers form a different, minimally acceptable cut off level for each attribute. If a particular brand does not meet the cut off level of any attribute that brand is removed from consideration. Disjunctive Rule It is the opposite of conjunctive rule. In this the consumer decides a separate minimally acceptable performance level for each attribute. The brand is accepted if any of the attributes meets or exceeds the cut off level. Lexicographic Decision Rule The attributes are ranked according to perceived relevance or importance to the consumer. Then different alternatives are compared in terms of the single attribute that is believed to be most important. If one brand out of the group scores an acceptable score it will be selected, regardless of the score on any other attribute.
References
1. Hawkins D.I., Best, R.J. and Coney K.AConsumer Behavior: Building Marketing Strategy.;Tata McGraw-hill ;2003.
2.Kotler, P. and Keller, K.L. Marketing Management. Pearson Education 2006; Fig 6.6. Steps between Evaluation of Alternatives and a Purchase decision,p197