Consumer Decision Process (CDP)

1. Consumer Decision Process (CDP) • It represents a road map of consumer’s mind that marketers and managers can use to help guide product mix, communication and sales strategies.

2. Stages of buying process

3. Problem Recognition • Internal Stimuli: When individuals themselves recognize the need of a product. E.g. Hunger, Thirst. • External Stimuli: When stimuli is provided by some external factors, as media or friends, family etc.

4. Personal Sources 2. Information Search Commercial Sources • Family, friends, neighbors • Most influential source of • information Public Sources • Advertising, salespeople • Receives most information • from these sources Experiential Sources • Mass Media • Consumer-rating groups • Handling the product • Examining the product • Using the product Contd……..

5. 2. Information Search Company must identify other brands in the consumer’s choice so that it can plan competitive appeals. *Consumers should be asked how they first heard about the brand, what information came in later, and the relative importance of different information sources.

6. 3. Evaluation of Alternatives Product Attributes Evaluation of Quality, Price, & Features Degree of Importance Which attributes matter most to me? Brand Beliefs What do I believe about each available brand? Total Product Satisfaction Based on what I’m looking for, how satisfied would I be with each product? Evaluation Procedures Choosing a product (and brand) based on one or more attributes. Contd……..

7. 3. Evaluation of Alternatives 10= Highest level of first three attributes 10= Lowest Price Contd……..

8. 3. Evaluation of Alternatives 40% importance to Memory Capacity 30% importance to Graphic Capacity 20% importance to Size & Weight 10% importance to Price Computation of Perceived value: A= 0.4 (10) + 0.3 (8) + 0.2 (6) + 0.1(4)=8 B = 0.4 (8) + 0.3 (9) + 0.2 (8) +0.1 (3) = 7.8 C = 0.4 (6) +0.3 (8) + 0.2 (10) +0.1 (5) = 7.3 D = 0.4 (4) +0.3 (3) + 0.2 (7) +0.1 (8) = 4.7 Best Alternative

9. 4. Purchase Decision • Purchase Intention • Desire to buy the most preferred brand Unexpected situational factors Attitudes of others • Purchase Decision Contd……..

10. 4. Purchase Decision The extent to which another person’s attitude reduces one’s preferred alternative depends on: • (A) Intensity of other person’s negative attitude toward the consumer’s preferred alternative • (B) Consumer’s motivation to comply with the other person’s wishes. • Amount of perceived risk influence purchase decision. Perceived risk varies with: • ·       Amount of money at stake • ·       Amount of attribute uncertainty • ·       Amount of consumer self confidence Purchase sub- decision • Brand decision • Vendor decision • Quantity decision • Timing decision • Payment-method decision

11. Post Purchase Satisfaction Post Purchase Use & Disposal Title Post Purchase Actions 5. Post Purchase Behavior

12. Post-Purchase Satisfaction Customer Satisfaction: Dependent on the product’s perceived performance relative to a buyer’s expectations. If performance (P) is lower than expectations (E), satisfaction is low. If performance (P) is higher than expectations (E), satisfaction is high. E=10 > P=8 E=10 < P=12

13. Post-Purchase Actions Higher probability of purchasing the product again Customer is Satisfied They will say good things about the brands to others May abandon or return the product Customer is Dissatisfied Exit Option (Stop buying product) May take an action Private Action Public Action (Complaining to company, lawyer or other groups) Voice Option (Warning Friends)

14. Post-Purchase Use & Disposal

15. Variables that shape the Decision Process • Individual Differences • Demographic, psychographics, values and personality • Consumer resources (Time, money, information reception and processing capabilities) • Motivation • Knowledge • Attitudes • Environmental influences • Culture • Social Class • Family • Personal Influence • Situation Behaviors • Psychological processes • Information Processing (information retrieval, transformation, reduction, elaboration, storage and recovery) • Learning • Attitude and behavior change

16. Types of Decision Process • Sometimes consumers undertake a complex decision process requiring substantial amounts of time and energy. Sometimes consumers undertake a simplistic process in which relatively little time and effort are devoted to the decision. • Initial Purchases • Extended problem solving • Midrange problem solving • Limited problem solving • Repeat Purchases • Extended problem solving • Midrange problem solving • Limited problem solving • Habitual Decision Making

17. Extended Problem Solving • Problem solving of a higher degree of complexity that influences consumer’s actions. • E.g. purchasing automobiles, expensive clothing etc. where risk of wrong decision is high. • All the stages of decision making are likely to be followed.

18. Limited Problem Solving • Problem solving of a lower degree of complexity that influences consumer’s actions. • In this need recognition leads to buying action, extensive search and evaluation are avoided because the purchase does not assume great importance.

19. Midrange Problem Solving • Some decisions are extremes on decision process continuum, but many decisions occur along the middle of the continuum and require midrange problem solving. • E.g. deciding which movie to see. A minimal amount of time is usually needed to find out what is playing, where it is playing and at what time.

20. Habitual Decision Making • Repeat purchases will be made on the basis of habits or routines that simplify life for the consumer. • Brand or Company loyalty: Satisfied customer becomes a loyal customer and reward the company with continued use over time. Such buyers have no incentive to change unless there is a demonstrable competitive breakthrough. • Inertia: Where loyalty consists of several brands, all of which are almost equal. E.g. in case of toothpaste. When prices are lowered or another brand is promoted as offering something new, customers switch to those brands.

21. Impulse Buying • An unplanned, spur of the moment action triggered by product display or point of sale promotion. Least complex form of LPS. • A sudden and spontaneous desire • A state of psychological disequilibrium • Onset of conflict and struggle • Minimal objective evaluation • Lack of regard for consequences

22. Variety Seeking • Consumers often are satisfied with their present brand but still engage in brand switching. • It occurs when there are many similar alternatives, frequent brand shifts, and high purchase frequency.

23. Factors influencing extent of problem solving • Degree of involvement • Personal factors • Product factors • Situational factors • Perception of difference among alternatives • Time availability • Consumer’s mood state

24. Summary • Three important points to be covered while studying buying process: buying roles, buying behavior and stages of buying process. • There are six buying roles. These roles can be played by single or many persons. • According to type of product, buying behavior also change. It is of four types. • Five stages are involved in buying process. It starts with the recognition of the need. • Then consumer search for information from various sources. • This information is evaluated on different criterion. Then the best alternative is chosen. • Final purchase decision depends upon the environmental factors and influence of others. • After purchase, post-purchase behavior is observed to find out the satisfaction level and use & disposal of the product.

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