consumer behavior ch.3

CHAPTER 3

THE CONSUMER DECISION PROCESS

CHAPTER OUTLINE

I. The Consumer Decision Process model (CDP) represents a roadmap of consumers’ mind that marketers and managers can use to help guide product mix, communication and sales strategies. The model captures the activities that occur when decisions are made and shows how different internal and external forces interact and affect how consumers think, evaluate, and act. The CDP model has seven stages:

A. Stage One: Need recognition – The perception of a difference between the ideal versus the actual state of affairs

B. Stage Two: Search for information – The search for information stored in the memory (internal search) and from the environment (external search). Information sources can be:

1.          Marketer-dominated

2.          Nonmarketer-dominated

Information processing consists of five steps:

1.          Exposure

2.          Attention

3.          Comprehension

4.          Acceptance

5.          Retention

C. Stage Three: Alternative evaluation – Options are weighted in terms of expected benefits and a choice is made.

1.          Salient attributes are thought of first and considered most important (price quality etc.)

2.          Determinant attributes determine the final choice (color, style, etc)

D. Stage Four: Purchase – Acquisition of the preferred alternative

E. Stage Five: Consumption – Possession and use of the preferred alternative

F. Stage Six: Post purchase evaluation – Assessment to determine if the purchase produced satisfaction or dissatisfaction

G. Stage Seven: Divestment – Disposal, recycling, or re-marketing of the unconsumed product or its remnants

H. By using the CDP model, marketers, consumer analysts, researchers can study consumers and customers and how they move through the decision model. This analysis:

1.          Relates different consumer behavior topics to one another

2.          Identifies areas for additional research

3.          Aids in the development and implementation of marketing mix strategies

II Variables that Shape the Decision Process

A. Consumer decision making is influenced by factors that fall into three categories:

1.          Individual differences

2.          Environmental influences

3.          Psychological processes

B. Individual differences include:

1.          Personality, values, and lifestyle

2.          Consumer resources

a. Time

b. Money

c. Information reception and processing

3.          Motivation

4.          Knowledge

5.          Attitudes

C. Environmental influences include:

1.          Culture – formulates and dictates social behavior

2.          Social class – individuals sharing similar values, interest, and behaviors

3.          Family

4.          Personal influence – people with whom we closely associate

5.          Situation – the environments we occupy

D. Psychological processes

1.          Information processing

2.          Learning

3.          Attitude and behavioral change

III. Types of Decision Processes

A. The decision process is on a continuum ranging from low to high degrees of complexity.

1.          Limited Problem Solving (LPS)

2.          Midrange Problem Solving

3.          Extended Problem Solving (EPS)

B. Habitual decision making involves repeat purchase behavior and is the least complex of the decision processes

C. Initial purchases:

1.          Extended problem solving refers to a process that is detailed and rigorous and is commonly undertaken when it is essential to make the “right choice”. All stages in the process are followed. Many alternatives will be evaluated and a wide variety of information sources consulted.

2.          Limited problem solving is a simpler process that occurs when consumers have neither the time, resources, nor the motivation to engage in EPS. The number and variety of information sources, alternatives, and evaluative criteria used are reduced.

3.          Mid-range problem solving lies between the two extremes of EPS (rigorous) and LPS (simple). Many decisions, such as a choice of a movie, are made by this process.

D. Repeat purchases may involve two types of decision making:

1.          Repeated Problem Solving: Repeat purchases may often require continued problem solving for several reasons such as dissatisfaction with the previously bough alternative or when retail stock is depleted.

2.          Habitual Decision Making: Repeat purchases may be based on habits or routines that are formed to simplify decision-process activity and enable the consumer to cope (Consumer in Focus 4.4 “Freedom of Choice Enslaves Dazed Customer”).

a. Brand or company loyalty occurs when it is important to find an alternative that meets needs. A high degree of brand loyalty is one of the greatest assets a marketer can possess because strongly favorable attitudes resist change, making competitive inroads both difficult and expensive.

b. Inertia takes place in many product categories in which there is limited brand loyalty.

E. Special categories of buying behavior:

1.          Impulse buying involves an unplanned spur-of-the-moment action triggered by product display or point-of-sale promotion.

2.          Variety seeking occurs when brand switching is evident even though consumers are satisfied with their present brand.

IV. Factors influencing the Extent of Problem Solving

A. The degree of personal involvement is the most important factor that shapes the type of decision-process behavior that will be followed. The consumer trys to:

1.          Minimize the risks of the purchase

2.          Maximize the benefits of the purchase

B. Determinants of involvement include personal, product, and situational factors.

1.          Personal factors – without activation of need and drive, there will be no involvement. Involvement is strongest when the product or service is perceived as enhancing self-image, and is also likely to be enduring as opposed to situational.

2.          Product factors – Products or brand become involving if there is some perceived risk in purchase and use. Types of perceived risk include physical, psychological, performance, and financial risk.

3.          Situational factors – Involvement may be situational, in other words, operational on a temporary basis and likely to wane once purchasing outcomes are resolved.

4.          Perceptions of differences among alternatives – EPS is more probable when choice alternatives are seen as differentiated.

5.          Time availability – EPS is generally followed when time pressures are low.

6.          Consumer mood may serve as an important moderating variable, which can strongly influence the information processing, and evaluation that takes place.

C. Outcomes of high and low involvement include:

1.          Initiation of EPS

2.          Activation of message involvement

3.          A greater likelihood that consumers will notice differences in the attributes possessed by various products

V. Diagnosing Consumer Behavior Provides Answers to Questions that will Help Formulate:

A. More extensive market research

B. Communications strategies

C. Marketing strategies