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Decision Making

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Decision

A decision is the selection of an option from

two or more alternative choices.

Brand Decisions

Quantity Decisions

Purchase Channel

Payment Option

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Level of Consumer Decision Making Extensive Problem Solving

No established Criteria for evaluating product

No initial brand preference

Require great deal of Information to establish Judgment

Criteria.

Limited Problem Solving

Basic criteria for evaluation are already established

Search for additional information before making final decision

Routine Response Behavior

Routine Purchases

Criteria and Preferences are well set

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Views towards Consumer Decision

Making

How and why Individuals behave as they do.

1. Economic View

2. Passive View

3. Cognitive View

4. Emotional View

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Economic View

Rational Decisions

Awareness of all available alternatives

Ranking of each alternative

Identifying the Best Alternative

Passive View Impulsive or Irrational Consumers

Influenced by the Promotional efforts of theMarketers

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Cognitive View Focussed Evaluation of Information

High degree of Information Processing

Emotional View

Consumers decision is affected strongly by

emotions such as Joy, Fear, Love, Hope etc.

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Model of Consumer Decision Making

Input Process Output

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Firms Marketing EffortsProduct

Promotion

Price

Place

Socio-Cultural EnvironmentFamily

Informal Sources

Social Class

Culture & Subculture

Input

External

Influences

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Need Recognition

Information Search

Evaluation of Alternatives

Process

Motivation

PerceptionPersonality

Learning

Attitudes

Consumer Decision Making

Internal

Influences

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Information Search Market Source

Customer Source

Neutral Source

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Purchase Post Purchase Evaluation

Output

Post Decision Behavior

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Post Purchase

Cognitive dissonance, Attribution

Repeat Purchase

Dispose

Exchange, destroy, gift, donate, sell, recycle etc.

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Decision Rules Non Compensatory Decision Rules

Decision rule is said to be Non Compensatory whengood performance on one evaluative criterion does notcompensate for poor performance on another evaluativecriterion of the brand.

Disjunctive Rule:

Consumer selects the most important evaluativecriterion

Minimum acceptable performance standard isestablished for that criterion which that brand must meet

The brand that exceeds the minimum performancestandard on that criterion will be accepted

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Conjunctive Rule: Requires consumer to establish minimum levels of

acceptability on each brand attribute that is of relevant tothe consumer

The brand will be selected if all the selected attributemeets the minimum performance standard

Lexicographic RuleAn extension of disjunctive decision rule Ranking of attributes from most important to least

important If choice cant be made by the most important criterion

(in case of a tie between two brands), the next bestcriterion will be assessed

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Compensatory Decision Rule The brand strengths compensates for brand

weaknesses

The positive attributes are given more importance

Decision on overall rating