UNIT 4 2 CONSUMER DECISION MAKING MS VICTORIA HENRY Definition The Consumer Behaviour is the study of how an individual decides to purchase a particular product over the other and what are the underlying factors that mould such behaviour MEANING Consumer decision making refers to the process through which individuals or groups select purchase use or dispose of products services experiences or ideas to satisfy their needs and desires It involves a series of mental and behavioural steps that consumers go through when considering and evaluating different options before making a purchase or acting This process can be influenced by various internal and external factors including personal preferences psychological biases social influences marketing efforts and situational factors Consumer decision making is a dynamic and iterative process that can be influenced by a wide range of factors including individual differences social and cultural influences marketing strategies and environmental factors Understanding the factors that influence consumer decision making is essential for businesses and marketers to develop effective marketing strategies tailor products and services to meet consumer needs and build strong relationships with customers Types of Consumer Decision making Consumer decision making can be categorized into different types based on the level of involvement and the degree of complexity Some common types include 1 Routine response behaviour This is when consumers make low involvement purchase decisions with little to no deliberation These are typically habitual purchases of inexpensive and frequently bought items 2 Limited decision making This type of decision making occurs when consumers have some prior experience with a product or service but still seek out information before making a purchase The level of involvement and complexity is higher than routine response behaviour but lower than extensive decision making 3 Extensive decision making This type of decision making involves high levels of consumer involvement and significant effort in information gathering and evaluation It is often associated with high priced infrequently purchased products or services These types of consumer decision making can help businesses understand how to approach and influence consumers at different stages of the decision making process PROCESS experience Consumer decision making typically involves several key stages 1 Recognition of Need or Problem Consumers recognize a need or desire for something whether it s a necessity like food or shelter or a more complex desire for a luxury item or In this the the customer decide why he wants the product s Necessities Food clothing Social needs car house luxury watch Externally created Depleted stock groceries Malfunctioning of the product TV refrigerator Changing environment summer wear winter wear Changing financial condition investment life insurance Marketing activities Induced by advertisement 2 Information Search Consumers gather information about available options to address their need or desire This information can come from various sources including personal experiences recommendations from friends or family advertising online reviews or expert opinions It is of following types 1 INTERNAL SEARCH Already used by the consumer might have used that product in past while buying Can proceed with the old one past history of purchases 2 EXTERNAL SEARCH Word of mouth advertisements online search 3 ACTIVE SEARCH In this type of buying the consumer is actively involved while buying Example cars property expensive gift 4 PASSIVE SEARCH Involvement of the customers is less because the product may not need immediately example when you are planning to buy a house after five year but the customer keep an eye on ongoing trends and open to all the information 3 Evaluation of Alternatives Consumers assess and compare different alternatives based on various criteria such as price quality features brand reputation and personal preferences They may use decision making heuristics or mental shortcuts to simplify the evaluation process In this stage the customer analyse the utility of each the brand it may be cognitive evaluation or based on emotional reasons or biases 4 Purchase Decision After evaluating the alternatives consumers decide to purchase a particular product or service This decision can be influenced by factors such as price promotions availability and situational factors like time constraints or urgency PURCHASING DECISION 1 not buying Not satisfied with the offerings 2 buy later Due to any kind of constraints or non availability of stocks 3 buy now 5 Post Purchase Evaluation Following the purchase consumers may evaluate their decision and experience with the product or service If their expectations are met or exceeded they are likely to feel satisfied and may become repeat customers If their expectations are not met they may experience dissatisfaction and may seek alternatives or return the product Satisfied Up to the expectations Dissatisfied failed in providing value to the customers Delighted exceed expectations Tend to re buy in future FACTORS INFLUENCING CONSUMER BEHAVIOUR FACTORS INFLUENCING CONSUMER BUYER BEHAVIOUR The marketers try to understand the actions of the consumers in the marketplace and the underlying motives for such actions These motives are the factors that influence the consumer behaviour These are 1 Psychological Factors The human psychology plays a crucial role in designing the consumer s preferences and likes or dislikes for a particular product and services Some of the important psychological factors are Motivation health and fitness goals social status environmental concerns Perception Brand image product packaging price perception Learning trial and error social learning advertising and marketing Attitudes and Beliefs brand loyalty cultural and social values personal preferences 2 Social Factors The human beings live in a complex social environment wherein they are surrounded by several people who have different buying behaviours Since man is a social animal who likes to be acceptable by all and thereby tend to imitate the behaviours that are socially acceptable Hence the social factors influence the buying behaviour of an individual to a great extent Some of the social factors are Family Joint decision making Brand loyalty Gift giving Reference Groups aspirational reference groups professional reference groups online