Consumer Decision Making Process

11 Key excerpts on "Consumer Decision Making Process"

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  eBook - ePub

  Consumer Behavior in Action

  Real-life Applications for Marketing Managers

  • Geoffrey Paul Lantos(Author)
  • 2015(Publication Date)
  • Routledge

    (Publisher)

  PART

  II

  THE CONSUMER DECISION-MAKING PROCESS

  The study of consumer behavior (CB) is about market choice behavior. Consumers decide between two or more competing alternatives, which can be brands (Brand X or Brand Z?), products (e.g., potatoes, stuffing, or rice?), stores (e.g., Kmart or Wal-Mart?), payment methods (cash, check, credit, or debit?), and even whether to make a purchase (“Just looking“).

  Consequently, we view CB as a process occurring over time. We are concerned not just with the purchase decision itself but also with how a decision is reached, that is, prepurchase behavior. Also, we wish to understand the outcomes of the decision, that is, postpurchase behavior, such as product usage, satisfaction, doubts about the wisdom of the decision, and product disposition.

  Part II focuses on the decision process, which is (more or less) rational. Thoughtful, reasoned action is taken to satisfy an individual’s needs and wants and solve his or her problems. Even emotional decisions can be viewed within the context of this step-by-step process. The two broad influences on consumer decision making are sociocultural and psychological, which will be discussed in Parts III and IV .

  OVERVIEW OF CONSUMER DECISION MAKING

  Chapter 3 provides an overview of the consumer decision process and its five stages. Exercise 3.1 covers the earliest model of consumer decision making, formulated by microeconomists. The model is found to have several deficiencies that are overcome by behavioral models of consumers.

  Exercises 3.2 and 3.3 outline the five-stage consumer decision process and look at a variety of decision-making scenarios, including the process you went through to select your college or university, and information sought and decisions made on the World Wide Web. Exercises 3.4 and 3.5 look at two important factors that determine whether the consumer will use the entire five-stage consumer decision process: the consumer’s level of involvement and degree of decision making. Finally, Exercise 3.6

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  The Marketing Book

  • Michael Baker(Author)
  • 2012(Publication Date)
  • Routledge

    (Publisher)

  Part Two The Framework of Marketing Passage contains an image Chapter 6 Consumer Decision Making: Process, Level and Style Gordon R. Foxall Introduction

  Consumer decision making is usually depicted as a cognitive process. Consumers become aware of a need or want and a possible means of satisfying it, typically announced in an advertisement for a new brand. They call mentally on the information they have at hand to evaluate the advertiser’s claims and, when that proves inadequate, search for further information – perhaps from other manufacturers and from friends. The ensuing deliberation entails a detailed comparison of the probable attributes of the competing brands and the selection of the brand which comes closest to fulfilling the consumer’s goals. When the cognitive models of consumer behaviour were first formulated in the 1960s, it did not seem to matter much whether the consumer was buying a brand in a familiar product class such as medicated shampoo or making a first time purchase of a new durable. The assumed pattern of decision making, modelled on the information processing of digital computers, was the same.

  Real consumers have a habit of disappointing the theoreticians. Empirical research indicates that, far from going through a detailed decision process and becoming loyal to a single brand as the formal models suggest, many consumers: (1) show little sign of pre-purchase decision making based on the rational processing of information (Olshavsky and Granbois, 1979); (2) use brand trial – rather than pre-purchase deliberation – in order to obtain information about and evaluate brands (Ehrenberg, 1988); (3) show multibrand purchasing within a small repertoire of brands which share attributes (or characteristics) that are common to all members of their product class (Ehrenberg, 1988); and (4) rely substantially on situational pressures and constraints in making brand decisions (Wilkie and Dickson, 1991).

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  Strategic Marketing Planning

  • Richard M.S. Wilson, Colin Gilligan(Authors)
  • 2010(Publication Date)
  • Routledge

    (Publisher)

  Figure 6.3 .

  Figure 6.3 The four types of buying behaviour (adapted from

  Assael, 1987 )

  Understanding the Buying Decision Process

  The third and final stage that we are concerned with here is the structure of the buying decision process that consumers go through. In other words, precisely how do consumers buy particular products? Do they, for example, search for information and make detailed comparisons, or do they rely largely upon the advice of a store assistant? Are they influenced significantly by price or by advertising? Questions such as these have led to a considerable amount of research into the buying process and subsequently to consumers being categorized either as deliberate buyers or compulsive buyers.

  To help in coming to terms with this, a series of models have been proposed that focus not simply upon the purchase decision, but upon the process leading up to this decision, the decision itself and then, subsequently, post-purchase behaviour.

  Here, the process begins with the consumer’s recognition of a problem, or perhaps more commonly, a want. This may emerge as the result of an internal stimulus (hunger or thirst) or an external stimulus in the form of an advertisement or a colleague’s comment. This leads to the search for information

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  Principles of Marketing

  A Value-Based Approach

  • Ayantunji Gbadamosi, Ian Bathgate, Sonny Nwankwo(Authors)
  • 2013(Publication Date)
  • Bloomsbury Academic

    (Publisher)

  A consumer is the user of the product or service. The consumer may not have paid for the product or service. For example, a chocolate manufacturing company makes own-label chocolate bars for a major supermarket. So, in this case, the customer is the supermarket to which it supplies bars. The consumer is the individual who consumes the chocolate. In terms of its marketing effort, the manufacturing company needs to understand the needs and wants of both the customer and the consumer. If you choose to purchase the chocolate and you eat istock © Picsfive khan 75 3 it, you are the customer and consumer. If, though, your child chooses and eats the chocolate but you pay for it, your child is the consumer and you are the customer. Consumers and customers may not demonstrate the same beliefs, values and atti-tudes. Marketers often try to influence the consumers (in this case, children) and exploit the power they have over the customers (in this case, parents). For instance, they may advertise tempting toys or food items during breaks in children’s television programmes or place sweets within reach of small children in supermarkets. They are attempting to use children to persuade parents to purchase their product. As a result, these types of marketing activities are criticized for addressing the wants of children without much consideration for the expectations of their parents, the customers. Consumer decision-making process A consumer goes through five key stages when making a purchase decision: problem recognition, information search, alternative evaluation, purchase decision and post-purchase evaluation. The following sections of the chapter will briefly explain these key stages. Need recognition: Need arousal or recognition factors are the starting point for any purchase decision and occur when an individual discovers a change in what he or she perceives to be an ideal state versus their actual (current) state and is both exter-nally and internally influenced.

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  The Wiley Blackwell Handbook of Judgment and Decision Making

  • Gideon Keren, George Wu, Gideon Keren, George Wu(Authors)
  • 2015(Publication Date)
  • Wiley-Blackwell

    (Publisher)

  Consumer decision making is classified as an application area in this handbook, but even the brief definition above should illustrate that the topic is distinct from many application areas. Applications such as medical and legal decision making are delineated by specific substantive content and professional oversight. Applications such as public policy may address a wide range of substantive issues (from health to safety to freedom) but do so often in service of relatively well-definable, if potentially conflicting, goals. In contrast, consumer decisions cut across multiple substantive areas (what specific choices are being made?) and involve multiple, often fuzzy or unspecified, potential objective functions (what are the ultimate outcomes desired?). What is unique about consumer research is its range. Consumer choices can involve huge amounts of information from varying sources (e.g., packaging; company, retailer, and other websites; salespeople and other consumers; trade publications). Consumer decision making encompasses choices both central and irrelevant to consumer identity, and ranging from staid and mundane to ever-changing and challenging. Hence, consumer decision making is an unusually broad, multidisciplinary, and rich application area, leading to a wealth of opportunity for research but also to some potential for confusion, and controversy, as to the appropriate boundaries of the field and approaches within it.

  The boundaries between consumer research and BDR are particularly porous. Like BDR, consumer research often explores distinctions between the predictions of normative economic models and the observations of actual individual decision makers. The classic approach using this perspective is the “heuristics and biases” tradition of documenting specific cognitive processes that lead to reliable deviations from normative expectations (Payne, Bettman, & Johnson, 1993; Shah & Oppenheimer, 2009; Tversky & Kahneman, 1974). As a subfield of consumer research, however, consumer decision making is also naturally connected to a wide variety of alternative theoretical perspectives and base disciplines. Perhaps as a result, the distinction between the normative (e.g., economic model) and descriptive (e.g., often psychologically based explanation of actual behavior) approach is less consistently focal within consumer research. Consumer decision making research is relatively less focused than classic judgment and decision making work on economic utility maximization as a clear normative benchmark, nor has the field been as specifically focused on cognitive psychological processes as the dominant perspective from which to predict and explain deviations from the economic benchmark.

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  Strategic Marketing Management

  • Richard M.S. Wilson, Colin Gilligan(Authors)
  • 2012(Publication Date)
  • Routledge

    (Publisher)

  In practice, of course, it is possible to identify several types of buying decision and hence several types of buying behaviour. The most obvious distinction to make is based on the expense, complexity, risk and opportunity cost of the purchase decision – the process a consumer goes through in deciding on a new car or major holiday, for example, will be radically different from the process in deciding whether to buy a chocolate bar. Recognition of this has led Assael (1987, Chapter 4) to distinguish between four types of buying behaviour, depending on the degree of buyer involvement in the purchase and the extent to which brands differ. This is illustrated in Figure 5.4. Figure 5.4 The four types of buying behaviour (adapted from Assael, 1987) Understanding the buying decision process The third and final stage that we are concerned with here is the structure of the buying decision process that consumers go through. In other words, precisely how do consumers buy particular products? Do they, for example, search for information and make detailed comparisons, or do they rely largely upon the advice of a store assistant? Are they influenced significantly by price or by advertising? Questions such as these have led to a considerable amount of research into the buying process and subsequently to consumers being categorized either as deliberate buyers or compulsive buyers. To help in coming to terms with this, a series of models have been proposed that focus not simply upon the purchase decision, but upon the process leading up to this decision, the decision itself, and then subsequently post-purchase behaviour. An example of this sort of model is illustrated in Figure 5.5. A sequential model of the buying process Here, the process begins with the consumer ’s recognition of a problem, or perhaps more commonly, a want. This may emerge as the result of an internal stimulus (hunger or thirst) or an external stimulus in the form of an advertisement or a colleague’s comment

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  eBook - PDF

  Consumer Behavior

  • Wayne Hoyer, Deborah J. MacInnis, Rik Pieters, , Wayne Hoyer, Deborah J. MacInnis, Rik Pieters(Authors)
  • 2017(Publication Date)
  • Cengage Learning EMEA

    (Publisher)

  In thought-based decisions about offerings, consumers may use compensatory or noncompensatory models, pro - cess by brand or by attribute, and consider gains versus losses. Feeling-based decisions about offerings may rely on appraisals and feelings, affective forecasts and choices, and imagery. Finally, three types of contextual factors that can influence the decision process are (1) consumer characteristics (expertise, mood, time pressure, extreme - ness aversion, metacognitive experiences), (2) decision characteristics (information availability, information format, trivial attributes), and (3) the presence of other people. Questions for Review and Discussion 1. How does consumer judgment differ from consumer decision-making? 2. What is the anchoring and adjustment process, and how does it affect consumer judgment? 3. How do consumers use compensatory and noncom - pensatory decision-making models? 4. Explain how consumers use their goals, decision tim - ing, and framing to decide which criteria are important for a particular choice. 5. Why do marketers need to know that attribute pro - cessing is easier for consumers than brand processing? 6. How do appraisals and feelings as well as affective forecasting influence consumer decision-making? 7. Under what circumstances do consumers use an alter - native-based strategy or an attribute-based strategy for decision-making? 8. In what ways do the characteristics of consumers, the decision, and the group context influence consumer decision-making? Summary: Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-202 228 PART T H R EE | THE PROCESS OF MAKING DECISITIONS Endnotes 1 See, for example, Jack Ewing, “Apple and Google Create a Buzz at Frankfurt Motor Show,” New York Times , September 17, 2015, www.nytimes.com. 2 Michael D. Johnson and Christopher P. Puto, “A Review of Consumer Judgment and Choice,” in ed.

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  eBook - ePub

  Marketing Communication

  A Critical Introduction

  • Richard Varey(Author)
  • 2002(Publication Date)
  • Routledge

    (Publisher)

  Dissonance has important implications for managing marketing communication systems. The arousal of dissonance is associated with involvement, and generally leads to some further action beyond purchase. The buyer may complain to the provider, or to friends, relatives, and colleagues, or to a trade or consumer protection body.

  Communication strategy should take account of the level of cognitive processing that consumers and buyers are expected to engage in and the route taken to effect attitude change. When motivation and involvement are low, for example, the peripheral route should be dominant with a focus on emotions.

  THE PURCHASE DECISION-MAKING PROCESS

  An understanding of how we make decisions and what influences our decision-making is important to managing communicative actions by both buyers and suppliers. This should be the basis for planning marketing communication systems and activities.

  A general decision-making process model is shown in Figure 3.7 . Of course, we may not actually proceed through the steps in strict sequence in every case.

  Figure 3.7 Steps to ordered decision-making

  An example of this (simplified) cognitive, affective, and conative process in given in Figure 3.8 .

  Need recognition

  We each have different needs at different times and recognize them in different ways. To a hungry walker, a country orchard is a place for nourishing food, while the artist sees an opportunity for a magnificent landscape painting. The next person may see the possibility of a job during the harvesting season. Needs may be simple and physical (for example, hunger), or complex and socially produced (recognized success, for example). As consumers, we may readily recognize our needs, while other people may act to spur us to recognize other needs. Healthy people know when they are hungry, but it may take an advertisement or comments from friends to provoke a desire to try a new restaurant.

  Consider joining the fitness gym (Figure 3.8

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  Decision Making

  Cognitive Models and Explanations

  • Ray Crozier, Rob Ranyard, Ola Svenson(Authors)
  • 2002(Publication Date)
  • Routledge

    (Publisher)

  Many everyday decisions fall into the category of multiattribute choice problems in which conflicts across a set of attributes can be identified. For example, consumer purchases usually involve a conflict between price and quality. In Chapter 2, Harte and Koele discuss process tracing research into multiattribute decision making and raise important methodological and psychometric issues. First they give an overview of the main research paradigms in this area based on the analysis of information search patterns and verbal protocols. The authors draw a distinction between research intended to describe individual decision processes, and research aimed at testing hypotheses about factors influencing them. They go on to make valuable recommendations of research designs which will yield more reliable descriptions of individual decision processes and more powerful tests of factors influencing these processes. Process tracing techniques are illustrated and discussed in several subsequent chapters. Selart, and Kemdal and Montgomery (Chapters 4 and 5) analyse verbal data while Lewicka and Huber (Chapters 6 and 9) summarise studies which monitor information search. Taken together, then, Chapters 1 and 2 provide the background for the chapters which follow and set them in a broader context.

  Passage contains an image

  Chapter 1

  Cognitive process models and explanations of decision making

  Ray Crozier and Rob Ranyard

  Decision making is fundamental to modern life in its individual, collective and corporate aspects. Individuals in the developed world are faced with personal decisions to an extent that previous generations would have found difficult to imagine. A combination of economic, social and technological developments has produced a situation where people have to make important decisions about their relationships and family life, their health, and their education and careers. They are involved in the management of their personal finances as home owners and consumers. Decisions are also fundamental at a societal level. The ballot box is central to democratic political systems as is the jury to the legal system. Business and financial institutions are faced daily with decisions about investment, research and development, and deployment of resources in a complex and uncertain environment.

  It is perhaps the social and economic significance of decisions that has resulted in the considerable influence upon psychological approaches to the study of decision making of concepts from other disciplines, in particular, economics. The concepts of utility and subjective probability and theories that account for their integration have shaped psychological enquiry and influenced its research paradigms.

  Subjectively expected utility (SEU) theory is a model of rational behaviour, originating in economics and mathematics. This assumes that decisions should be reached by summing over the set of alternatives the utility of each alternative weighted by the subjective probability of its occurrence. Its elegance and authoritative status provide an incentive for decision makers to apply it to their own situation. Nevertheless, the value of utility maximisation as a normative choice principle was criticised, for example, by Simon (1957), who argued that people can successfully adapt to their environment by identifying actions that are merely satisfactory for their goals. He proposed the alternative normative principle of satisficing: take the first course of action that is satisfactory on all important aspects. He argued that this principle could be applied without sophisticated powers of discrimination and evaluation, powers that humans do not possess. He thus developed the concept of bounded rationality, which incorporates the basic assumption that rationality is relative to the information processing capacities of the decision maker. We return to this point below.

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  Handbook of Social Cognition

  Volume 2: Applications

  • Robert S. Wyer, Jr., Thomas K. Srull(Authors)
  • 2014(Publication Date)
  • Psychology Press

    (Publisher)

  8 Consumer Judgment and Decision Processes Frank R. Kardes

  University of Cincinnati

  Contents Acquisition of Information About Products and Services Selective Exposure Selective Attention Selective Encoding Retention of Information About Products and Services Brand Retrieval and Consideration Set Formation Cognitive Organization of Product Information The Relationship Between Memory and Judgment Utilization of Information About Products and Services Information Integration Theory The Omission Detection Model Data-Driven Versus Theory-Driven Inference Processes The Availability-Valence Model The Accessibility-Diagnosticity Model The Hypothesis-Testing Model Behavioral Decision Models The MODE Model Conclusion References

  Recent reviews have indicated that theory and research in consumer psychology continue to emphasize processes involved in judging, selecting, and using commercial products and services (Bettman, 1986; Cohen & Chakravarti, 1990). Because of this process orientation, it is not surprising that consumer psychology is influenced heavily by theory and research in social cognition. However, consumer psychology differs from social cognition in several respects: nonsocial stimuli such as products, services, advertisements, and other marketing-related stimuli serve as the targets of judgment; implications for marketing management, business law, or public policy are emphasized; and consumer psychology is influenced heavily by theory and research in behavioral economics. Despite these points of departure, cognitive social psychologists are likely to find consumer research interesting, because the ubiquity and frequency of consumption-related thoughts and actions provide psychologists with the opportunity to investigate judgment, inference, and decision processes in an important everyday context. This chapter reviews recent research in consumer psychology bearing on the acquisition, retention, and utilization of information concerning products and services.

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  Fundamentals of Marketing

  • Marilyn Stone, Marilyn A Stone(Authors)
  • 2007(Publication Date)
  • Routledge

    (Publisher)

  The main objection that behaviourists such as Foxall (2005) have to the above explanation is that these additional variables, such as subjective norms and behavioural control are situational variables that are encompassed by the behaviourist explanation. The cognitive information processing approach described above has been grafted on to a much older scheme. For example, Strong (1925) developed a scheme known as the hierarchy of effects that sought to measure the effectiveness of marketing communications. The hierarchy of effects provided marketers with a set of sequential objectives, namely to:

  Cognitive consumer decision process

  • Build awareness of the product in the mind of the target group.
  • Ensure that a good proportion would become interested in trying the product.
  • Create a desire for the product that would then lead to the fourth term, action.

  Consider how these relate to the CIP approach to explaining the consumer decision process which is shown in Figure 3.9 .

  PROBLEM IDENTIFICATION

  If the problem solving view of consumer behaviour is adopted, then the problem identification stage may be thought of as a change in people’s well-being as the result of a difference between their actual state and the state which they would like to be in (their desired state). This difference creates a sense of lack, a gap, a loss of equilibrium and well-being which in turn is the propulsion engine for desire. The resultant energy is directed towards means for satisfying that desire. In a consumer society the provision of goods and services play a major role in the provision of such satisfaction. Consider the example of Joe, a final-year student who is applying for a job. A bank has notified him that he has been selected for interview for a job in its computer department.

  INFORMATION SEARCH

  Usually Joe has no real interest in clothes and had not thought about what he might wear until his friend Jane pointed this out. He looks in his wardrobe and then conducts a ‘fashion show’ for Jane and some other friends in his flat. Jane and the others are horrified that Joe thought that it would be appropriate to wear his favourite combination of slash jeans and Killers T-shirt to the interview.

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