Thaksin University Consumer decision making process Chapter 11 Consumer decision making process 0705311 Consumer Behavior

What is a decision?

Levels of consumer decision making Extensive problem solving Limited problem solving Routinized response behavior Chapter 2 Consumer Behavior Analysis

Types of purchase or consumption decisions Decision category Alternative A Alternative B Basic purchase or consumption decision brand purchase pr consumption decision To purchase or consume a product (or service) To purchase or consume a standard quantity Not to purchase or consumer a product (or service) To purchase or consume more or less than a standard quantity

Models of consumers : four views of consumer decision making An economic view A passive view A cognitive view An emotional view

An economic view Economic man theory To behave rationally in the economic sense Be aware of all available product alternatives Be capable of correctly ranking each alternative in terms of its benefits and disadvantages Be able to identify the one best alternative

A passive view The passive model of the consumer Quite opposite to the rational economic view of consumer

A cognitive view The cognitive model Consumers are viewed as information processors.

An emotional view The emotional or impulsive model of consumer decision making Feedback reactions Goal setting Formation Of a goal intention Action planning Action Initiation and control Goal attainment/ failure

6Ws 1H Who is target market? What does the market buy? Why does the market buy? Who participates in the buying? When does the market buy? Where does the market buy? How does the market buy? 6Ws 1H Occupant Objects Objectives Organization Occasion Outlets Operation 7Os

A Model of Consumer Decision Marking

Consumer Decision Making External Influence Firm’s Marketing Efforts 1. Product 2. Promotion 3. Price 4. Channels of distribution Sociocultural Environment 1. Family 2. Informal sources 3. Other noncommercial sources 4. Social class 5. Subculture and culture Input Consumer Decision Making Psychological Field 1. Motivation 6. Self concept 2. Perception 7. Life Style 3. Learning 8. Values 4. Personality 5. Attitudes Need Recognition Prepurchase Search Evaluation of Alternatives Process Experience Postdecision Behavior Purchase 1. Trial 2. Repeat purchase A Simple Model of Consumer Decision Making Output Postpurchase Evaluation

Input Marketing inputs Sociocultural inputs

Evaluation of Alternatives Process Need Recognition Prepurchase Search Evaluation of Alternatives

Need Recognition Need Recognition Occurs By : Running Out of Consumer’s ideal State Need Recognition Occurs By : Running Out of a Product Inadequate Product Creating New Needs Consumer’s Actual State Opportunity Recognition Exposure to Different or Better-Quality Products

Prepurchase search Types of Search Information sources Prepurchase- an explicit search for information. Ongoing search - browsing used by veteran shoppers for up- to-date information. Information sources Internal sources - memory scan to assemble information. External sources - information obtained from advertisements, friends or people watching.

Prepurchase search Information searches Deliberate search is the result of directed learning. Accidental search is the result of incidental learning.

Alternative prepurchase information sources for laptop Personal Impersonal Friends Neighbors Relatives Coworkers Computer salespeople Newspaper articles Magazine articles Consumer reports Direct-mail brochures Information from product advertisements Internal web sites

How much search occours? Purchase is important Value style and image Need to learn more about purchase Search activity is greater when : Information is easily obtained Consumers are younger, Better-educated Women shop more than men

Experience First-time purchase No past experience because the product is new Unsatisfactory past experience within the product category Social acceptability The purchase is for a gift The product is socially visible

Evaluation of Alternatives Pre-Purchase Evaluation of Alternatives Product feature must match decision criteria What are my options? Which is best? Compare and contrast Evaluation attributes Salient attributes Determinant attributes

Evaluation of Alternatives All alternatives Evoked Set Actively Considered Inert Set Not Entering consideration Inept Set Aware of, but would not buy Selected Rejected

Heuristics Common Heuristics Country of Origin Brand Loyalty Retail Outlets Product Signal Price/Quality Relationship Market Beliefs Brand Names

Evaluative Criteria Location Assortment breadth and depth Price Advertising and promotion Store personnel Services Customer characteristics Store atmosphere

Postpurchase evaluation Output Purchase behavior Postpurchase evaluation

Purchase behavior Consumers make three types of purchases Trial purchases Repeat purchases Long-term commitment purchases

Postpurchase evaluation Actual performance matches expectations Neutral feeling Performance exceeds expectations Positive disconfirmation of expectations Performances is below expectations Negative disconfirmation of expectations

The importance of customer satisfaction It influences repeat buying It shapes word-of-mouth communication Dissatisfaction leads to complaints Implications for competitive strategy

Any Questions?