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Consumer Decision Making
Process
Module 4
Dr. Mohan P Philip
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Syllabus
Stages in Consumer Decision process- Types
of Decision Making- Post Purchase
Behaviour- Personal Influence and Opinion
leadership- Diffusion of innovations-
Adoption Process
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Stages in Consumer Decision process
Problem recognition
Information search
Evaluation of alternatives & selection Outlet selection & purchase
Post purchase action
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Buying decisions and consumption of products
and services always in the context of some
specific situation.
It is extremely important for marketers to
understand how situations and internal and
external influences affect the purchasing
decision process.
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Situational influence refers to all those factors
outside and removed from the consumer and
also from the attribute of product or service.
These factors are particular to a time and
place and have a demonstrable and
systematic effect on consumer behaviour.
Situational factors are temporary conditions
or settings present in the environment at a
specific time and place.
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There are three types of situational variables:
Communication situation Purchase situation
Usage or consumption situation
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Communication situation:
Refers to the setting in which consumers areexposed to information from interpersonal or
commercial sources that have an effect on
consumers behaviour.
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Determining factors to which consumer will
notice, understand and retain information:
Consumer is alone or in a group,
In a good or foul mood,
In a hurry or relaxed.
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Types of communication situations that may
influence consumer response:
i. The exposure situation:
E.g., Consumer reads the magazine as a pass-
on issue.
Consumer views TV commercial alone, with
family members or friends.
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ii. The context of communication:
E.g., happy programs lead consumers to have
positive thoughts and sad programs negative
thougts.
iii. The consumers mood while exposure to
communication occurs.
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Purchase situation:
May affect consumer decision on product
selection and include several stimuli present
in the store, if the product is given as:
a gift or
it is an emergency or
anticipated purchase
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Usage or consumption situation:
Refers to the occasion of use, such as:
Arrival of guests,
Or the product usage is related to attending
parties so on.
E.g., Entertaining close friends at home
Going to a hotel or bar on Saturday night
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Social surroundings:
Refer to the presence of other individuals
during the purchase or consumption process.
Social influence is a significant force thataffects our behaviour.
E.g., sales people know that they can use theshoppers companion as an effective sales aid
by asking her/his opinion and advise.
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Antecedent states:
Are momentary conditions such as shoppingwhen in a bad mood, tired or anxious, or
buying on impulse.
Marketers often advertise their products orservices by communicating mood
enhancement as one of the benefits.
Ads such as you need a break or giveyourselves a treat in an attempt to induce
positive mood.
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Consumer Decision Making Process
Consumer Decision Making is influenced by:
Level of consumer involvement,
Time pressure, Mood.
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Constructive processing:
It means that consumers adjust their degree
of cognitive effort to the task at hand.
Consumer evaluates the level of effort
required to make a certain choice, then selects
a strategy best suited for the occasion.
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Product involvement:
Refers to consumers level of interest in a
product. Marketers communicate many sale
involvement to increase consumerinvolvement in a product.
Advertising involvement:
Refers to consumers interest in processing the
ad messages
E.g., TV- medium of low involvement
Print - medium of high involvement
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Purchase situation involvement:
May occur when buying the same item in
different contexts.
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Types of Decision Making
Consumer Decision Making Process generally
falls under one of the three major decision
approaches:
Nominal decision making
Limited decision making
extended decision making
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i. Nominal decision making:
Occurs when products are low costs,
frequently purchased,
Familiar brands/products,
Of low involvement category,
And little search time is given to purchase
Very low involvement in purchase because of
brand loyalty, time pressure and other
reasons.
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ii. Limited decision making:
Is usually straight forward and simple,
It involves input from long term memory and
limited search,
Few alternatives and attributes considered,
and,
There is little or no post purchase evaluation.
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iii. Extended decision making:
Occurs when products are:
Expensive, Risky,
Ego-intensive,
Are purchased infrequently,
Consumer involvement is very high,
Consumer considers much information frominternal and external sources,
Post purchase decision is more likely to becomplex and dissonance-causing.
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Nominal decision making and Extended
decision making are two ends of a
continuum. In between there might be various shades of
consumer involvement depending on:
Product category,
Nature of purchase situation, and
Personal factors
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Nominal Decision Making Limited Decision Making Extended Decision Making
Low cost products More expensive product
Frequent purchases Infrequent purchases
Low involvement High-involvement
Familiar product /brand Unfamiliar product
Little thought, search or
time to given purpose
Extended thought, search
and time given to
purchase
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Post Purchase Behaviour
Consumers engage in a constant process of
evaluating the things they buy.
Incase of some purchases they experience
post purchase dissonance as a result of doubts
they develop about the wisdom of a purchase. [dissonance = anxiety after purchase]
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Cognitive dissonance occurs as a result of
some discrepancy between a consumers
prior evaluation and the purchase decision.
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Dissonance Theory
Derived from two Basic Principles: i. Dissonance is unpleasant and will motivate
the person to reduce it.
ii. Individuals experiencing dissonance will
avoid situations that produce more
dissonance.
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Post purchase dissonance occur when more
than one alternative was attractive and a
relatively permanent and difficult decisionhad to be made.
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Factors that cause dissonance:
i. The degree of irrevocability of the decision:
Easier to change decision less likely
to experience dissonance
ii. The importance of decision to the
consumer:
If decision is more important greater
the possibility to cause dissonance
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iii. Difficulty of choosing among the
alternatives:
Greater the possibility of choosing betweenthe alternatives greater the Post
Purchase dissonance.
iv. The individuals tendency to experienceanxiety:
If consumer more prone to anxiety
the more likely to experience the PostPurchase dissonance.
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Incase ofnominal decisions and limited
decisions consumers are unlikely to
experience post purchase anxiety becausethey do not find attractive attributes in brands
not selected.
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Product purchases characterized as high-
involvement are more likely to produce
dissonance.
Once a minimum threshold level is passed, it
becomes increasingly unpleasant andconsumers generally take some action to
avoid or reduce it.
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Purchase Evaluation and
Satisfaction/Dissatisfaction
Consumers expect a level of performance
from their selected product or the retail
outlet.
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Expectations and perceived performance are
not independent and consumers tend toevaluate their performance in line with their
expectations.
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This performance perception could be:
noticeably more than expected level,
noticeably below expectations, or
match the expected level of performance.
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Positive post-purchase evaluation results in
Satisfaction and
Negative evaluation causes dissatisfaction.
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When performance level far exceeds the
desired performance level, the customer is
likely to be delighted.
This reducesconsumers decision making
efforts on future purchase occasions and
The rewarding experience encourages the
consumer to repeat the same behaviour in
future.
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A delighted consumer is likely to be
committed and usually unlikely to be
influencedby competitors actions.
A delighted customer is also likely to spread
favourable word-of mouth.
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Dissatisfaction Responses
In case ofdissatisfaction, first of all the
consumer decides whether to take some
action or not.
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Ifno action is taken then the consumer lives
with dissatisfaction and develops a negative
attitude towards the product or the outlet.
This is damaging to the company or the outlet
due to loss of future sales and unfavourable
word-of-mouth.
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Implications for Marketers
To meet consumer expectations, marketers
need to focus on creating reasonable
expectations among consumers through:
Appropriate promotional efforts,
Ensure consistency in product quality, so that
expectations created through marketing
communications are fulfilled.
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Consumers, whose complaints resolved to
their satisfaction are comparatively more
satisfied than consumers who had no
complaints and were actually satisfied with
the product.
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The firm should develop:
an efficient system of receiving complaints
and
Encourage consumers to record their
complaints as soon as they occur, and
Effectively resolve the cause of their
complaints.
A better strategy is to anticipate
dissatisfaction and act promptly to remove
the cause of complaint before it occurs.
f h
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Satisfaction, Repeat Purchase and
Customer Loyalty
Relationship marketing focus on:
Developing an ongoing and
Profitable relationship with a companys
customers.
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The core of this concept (Relationship
marketing) is based on:
Understanding customers and
Their needs at individual customer level and
The marketers objectives are to encourage
more usage of the product/brand, repeat
purchases, and brand loyalty.
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Creating committed customers necessarily
requires:
Consistently meeting or exceeding customer
expectations and
Inculcating a belief among them that the
company treats them fairly and concerned
about their well being.
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Product Disposal
Disposal of product containers is increasingly
becoming important for governments and
marketers because of environmental
concerns.
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Many socially responsible manufacturers are
making efforts to develop products andpackages that can be disposed off safely and
are less likely to be harmful to the society.
P l I fl d O i i
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Personal Influence and Opinion
leadership
Personal influence is frequently considered as
same as word of mouth communication or
advertising.
A favourable word of mouth communication
actually have more influence than other forms
of promotional activities.
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The main reasons for it are:
Consumers view word of mouth as reliable
and trust worthy information which can help
people to make better buying decisions.
Personal contacts can provide social support
and give a stamp of approval to purchase.
NATURE AND SIGNIFICANCE OF
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NATURE AND SIGNIFICANCE OF
PERSONAL INFLUENCE
Personal influence is described as the effect or
change in a persons attitudes or behaviour as
a result of communication with others.
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The communication done is always
multidimensional because:
i. Communication leading to influence may be
source oriented( by the influencer) or
recipient oriented( by the influencee)
ii. Communication may result in one way or
two way influence (i.e.. individual may
influence while being influenced).
iii. Communication resulting in influence may
be virtual or visual
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OPINION LEADERSHIP
Opinion leaders are those people who are
able to exert personal influence in a given
situation. They are the ones to whom others
look for advice and information.
Personal influence of opinion leaders are
significant for the marketer.
The marketer must first identify and segmentthem.
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Then they must be reached with effective
promotional message which will make the
opinion leaders to communicate and influencetheir fellow group members.
CHARACTERISTICS OF OPINION
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CHARACTERISTICS OF OPINION
LEADERS
They have greater exposure to mass media relevant totheir area of interest.
They have greater interest and knowledge of the areaof influence
They are generally more social and companionable.
They are more innovative
They are loyal to group standards and values
They exhibit the personality trait of public
individualization ( the state in which they feeldifferentiated to some degree from others and chooseto act differently from them)
WHY OPINION LEADERS ATTEMPT TO
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WHY OPINION LEADERS ATTEMPT TO
INFLUENCE OTHERS
Mainly there are four reasons
Product involvement
Self involvement
Other involvement
Message involvement
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INNOVATION
It is an idea, practice or product perceived to be
new by an individual or a group.
It is the adoption of a new idea, product or
process which is prospectively useful.
It is the design and development of something
new which is unknown and not in existence.
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Innovation has a process has four basic
elements:
Improvement and development of existing
forms
Improvement and development of existing
processes
Introduction of novel production processes
Introduction of new products and services.
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TYPES OF INNOVATIONS
Innovations vary in how much behavioural change
is required on the part of consumer. It is mainly
divided into three
1) Continuous Innovations:It is the innovation which has a limited influence
on the consumption behaviour of consumers.
That means only slight changes are made in theproduct or service offered. E.g. product
alteration
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2) Dynamically continuous innovation:
It is the one that effects consumer
consumption behaviour in a deeper or
pronounced way.
E.g. internet shopping
3) Discontinuous innovation:
It represents a product which is entirely new
to the consumer where the consumer hardly
knows about it.
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Adoption Process
The acceptance and continued use of a product or
brand by an individual is referred to as adoption.
There are mainly 6 stages in the adoption process
1) Awareness:
At this stage the potential adopter finds out
about the existence of a product but has very
little information and no well formed attitudesabout it.
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2. Comprehension:
This stage represents the consumers having
knowledge and understanding of what theproduct is and can do
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3) Attitude :
The consumers develops favourable or
unfavourable behavioural predispositionstowards the product . I
f the attitudes are not favourable then it
leads to the termination of the adoptionprocess.
4) Legitimation:
The consumer becomes convinced that theproduct should be adopted
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5) Trial:
In this stage, if possible the consumer tests or
tries the product to determine its utility
6) Adoption:
At this stage the consumer determineswhether or not to use the product in a full
scale way .
Thus the purchase of the product completes
the adoption process.
SIGNIFICANCE OF ADOPTION
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SIGNIFICANCE OF ADOPTION
PROCESS
The significance of adoption process to themarketer is two fold:
They can understand the speed at which the
consumer moves through the stages of adoptionprocess
The marketers communication forms vary intheir effectiveness over the different stages in
the adoption process.These points assist the marketer to develop an
effective promotional program.
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DIFFUSION OF INNOVATION
Diffusion of Innovations is a theory that seeks to
explain how, why, and at what rate new ideas
and technology spread through cultures.
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Everett Rogers, a professor of rural sociology,
popularized the theory in his 1962 book
Diffusion of Innovations.
He said diffusion is the process by which an
innovation is communicated through certain
channels over time among the members of a
social system.
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The book proposed 4 main elements thatinfluence the spread of a new idea:
the innovation,
communication channels,
time, and
a social system.
Diffusion is the process by which aninnovation is communicated through certain
channels over time among the members of asocial system
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The key elements in diffusion research are:
Innovation
Rogers defines an innovation as an idea,
practice, or object that is perceived as new by
an individual or other unit of adoption
Communication channels
A communication channel is the means by
which messages get from one individual to
another.
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Time
The innovation-decision period is the length of
time required to pass through the innovation-
decision process.
Rate of adoption is the relative speed with which
an innovation is adopted by members of a socialsystem
Social system
A social system is defined as a set of interrelatedunits that are engaged in joint problem solving
to accomplish a common goal
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CLASSIFICATION OF ADOPTERS
Rogers defines an adopter category as a classification ofindividuals within a social system on the basis ofinnovativeness.
Innovators
Innovators are the first individuals to adopt aninnovation.
Innovators are willing to take risks, youngest in age,have the highest social class, have great financiallucidity, very social and have closest contact to
scientific sources and interaction with otherinnovators.
innovators.
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Early Adopters
This is the second fastest category of
individuals who adopt an innovation. These individuals have the highest degree of
opinion leadership among the other adopter
categories. Early adopters are typically younger in age,
have a higher social status, have morefinancial lucidity, advanced education, and
are more socially forward than late adopters.More discrete in adoption choices than
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Early Majority
Individuals in this category adopt an innovation
after a varying degree of time.This time of adoption is significantly longer thanthe innovators and early adopters.
Late Majority
Individuals in this category will adopt aninnovation after the average member of thesociety.
These individuals approach an innovation with a
high degree of skepticism and after the majorityof society has adopted the innovation.
L d
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Laggards
Individuals in this category are the last to
adopt an innovation.
These individuals typically have an aversion
to change-agents and tend to be advanced in
age.Laggards typically tend to be focused on
"traditions", likely to have lowest social
status etc
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HARD CORE LOYALS Committed buyer spokes person for the brand
SOFT CORE LOYALS
Satisfied buyer with divided loyalty
SHIFTING LOYALS
Satisfied buyer with switching
costs
SWITCHER
Buyer with no feeling of loyalty