CONSUMER DECISION MAKING

Consumer Decision making is a central part of consumer behavior but the way we evaluate and choose products varies widely.

How do you choose the food that you eat?

Stages in CDM

Decision making perspectives

Rational

Carefully integrating information about the product e.g cooking oil

Behavior influence

Based upon environmental cues

e.g attention grabbing packages.

Experiential

Offerings that create a positive emotional

response e.g. buying the same chocolate

again

A continuum of buying decision behavior

• Motivation:● Low risk vs. high risk● Low involvement vs. high involvement

• Information search● Little search vs. extensive search

• Alternative Evaluation● Weakly held beliefs vs. strongly held

beliefs• Purchase

● Limited time vs. ample time ● Influenced by store displays vs.

communication with store personnel

Characteristics of limited vs. extended problem solving

STAGE 1: PROBLEM RECOGNITION

K & Ns - Safe and Healthy chicken ( Opportunity)

Home cooked Chicken ( Actual State )

Chicken not available Market closed/ Bird flu ( Need )

NO PROBLEM Acceptable state

OPPORTUNITY Ideal states goes up

NEEDActual state goes down

STAGE 2: INFORMATION SEARCH• Deliberate Search

●Directed learning●Purchase based upon previous

knowledge

• Accidental Search● Incidental learning●Purchase based upon mere exposure

DO WE ALWAYS SEARCH OR BUY RATIONALLY?

MENTAL ACCOUNTING• This process demonstrates that the way we

pose a problem and whether it’s phrased in terms of gains or losses influences our decisions.

Add picture

HOW MUCH DO WE SEARCH?

STAGE 3: EVALUATION OF ALTERNATIVES

Purchase decision at the stage where we have to choose a product from several alternatives

● E.g different types of burgers of the same brand● Different franchises of burgers

• Evoked Set:• Alternatives a consumer already knows about

(knowledge of the shampoo brands)

• Consideration Set:● Alternatives that a consumer actually considers

while purchasing (based upon price range, availability, past experience)

PRODUCT CATEGORIZATION • First: Superordinate level (general category-

dessert)

• Second: Basic level (sugar vs. sugar free)

• Third: Subordinate level ● Sugar: brownies, donuts, bounty● Sugar-free: wheatables, mithai, chamam

ice cream

STAGE 4: PRODUCT CHOICE

Once we assemble and evaluate the relative options in a category, eventually we have to choose one.

• Evaluative criteriaDimensions we use to judge the merits of competing options

● Determinant attributes: Features we use to differentiate among our choices (yoghurt: texture, taste, nutritional value, price, freshness, size of packaging)

● Differences in products carry more weightage in the decision process than do similarities

HEURISTICS (RULE OF THUMB):

• If a salad is green, its fresh

• Nutritional chart given, high quality product

• Pioneer product (e.g national foods/ nestle)

What heuristic approach do you use while buying foods?

MARKET BELIEFS

• Brand● The best brands are the ones purchased the

most• Store

● Larger stores offer more variety (Alfatah/Hyperstar)

• Price/discount/sale● Sales are typically run to get rid of slow moving

merchandise/ defected stuff• Advertising & sales promotion

● Items tied to giveaways are not a good value (Vim + maggie noodles) or (free product is of low quality)

• Product/packaging● Large size containers are cheaper compared to

individual small size packing ( coke vs. coke carton)

DECISION RULES

• Consumers rely on different decision rules when they evaluate competing options

● Non-compensatory decision rules: When we feel that a product with a low standing of one attribute can’t compensate for this flaw even if there is another better attribute (e.g size of TV screen small, but good picture quality)

● Compensatory decision rules: When a product has a chance to make up for its shortcoming (though the pizza is small but good topping)

STAGE 5: OUTCOMES

This is the final stage of decision making where you buy the product of your choice and leave the rest

Happy decision making! :D

MARKETERS APPROACH