Consumer Behavior Module 2: Role of Research in understanding Consumer Behaviour 2.

1 Introduction Research is the scholarly or scientific practice of gathering existing or new information in order to enhance one's knowledge of a specific area. Research has many categories, from medicine to literature. Marketing research, or market research, is a form of business research and is generally divided into two categories: consumer market research and business-to-business (B2B) market research, which was previously known as industrial marketing research. Consumer marketing research studies the buying habits of individual people while business-to-business marketing research investigates the markets for products sold by one business to another. Consumer marketing research is a form of applied sociology that concentrates on understanding the behaviours, whims and preferences, of consumers in a market-based economy. The field of consumer marketing research as a statistical science was pioneered by Arthur Nielsen with the founding of the ACNielsen Company in 1923. Depending on whether the data required already exists or not, there are two classifications: a. Primary Research & b. Secondary Research. Primary Research : Primary research (also called field research) involves the collection of data that doesn't already exist. The term is widely used in market research. There are different methods of collecting primary data. Some of these are: * Observation: Looking at and recording what people do and how they behave. Today, store cameras can be used to observe consumer behaviour * Experiments: Market researchers can use experimental techniques. For example- test marketing, blind taste tests * Surveys: Involves asking questionnaires to respondents * Consumer panels: A select group of consumers that the company regularly surveys to identify changing attitudes. There are two broad categories of primary research to understand consumer behaviour. a. Qualitative Research: This involves measuring in terms of general descriptions & categories. b. Quantitative Research: In this category, the measurement is in terms of numbers.

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Qualitative Research: Qualitative research involves an in-depth understanding of consumer behavior and the reasons that govern that behavior. Unlike quantitative research, qualitative research relies on reasons behind various aspects of behavior. Simply put, it investigates the why and how of decision making, as compared to what, where, and when of quantitative research. Hence, the need is for smaller but focused samples rather than large random samples, which qualitative research categorizes data into patterns as the primary basis for organizing and reporting results. Unlike quantitative research, which relies exclusively on the analysis of numerical or quantifiable data, data for qualitative research comes in many mediums, including text, sound, still images, and moving images. In qualitative research, the method does not ask the consumer to limit his or her answers to pre-assigned response categories. The responses are verbal rather than numbers & the respondent is asked to rate the answer in his or her own words. If the answer is a True/False or a multiple choice category, this is a quantitative answer. If the answer is in terms of an essay, it is qualitative. In this method, the researcher may not even know what the possible answers could be, & in fact this method is adopted precisely for that reason. This approach allows the researcher to discover the consumption motives, attitudes, opinions, perceptions, preferences, experiences, actions, future intentions, etc. There are different techniques in qualitative research. Some of them are described in the following paragraphs: Focus Groups: A focus group is a form of qualitative research in which a group of people are asked about their attitude towards a product, service, concept, advertisement, idea, or packaging. Questions are asked in an interactive group setting where participants are free to talk with other group members. Focus groups are seen as an important tool for acquiring feedback regarding new products, as well as various topics. In particular, focus groups allow companies wishing to develop, package, name, or test market a new product, to discuss, view, and/or test the new product before it is made available to the public. This can provide invaluable information about the potential market acceptance of the product. In traditional focus groups, a screened (qualified) group of respondents gathers in the same room. They are screened to ensure that they are part of the relevant target market and that the group is a representative subgroup of this market segment. There are usually 6 to 10 members in the group, and the session usually lasts for 1 to 2 hours. A moderator guides the group through a discussion that probes attitudes about a client's proposed products or services. The

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discussion is loosely structured, and the moderator encourages the free flow of ideas. The moderator is typically given a list of objectives or an anticipated outline. He/she will generally have only a few specific questions prepared prior to the focus group. These questions will serve to initiate openended discussions. Client representatives observe the discussion from behind a one-way mirror. Participants cannot see out, but the researchers and their clients can see in. Usually, a video camera records the meeting so that it can be seen by others who were not able to travel to the site. Transcripts can be created from the video tape. If the participants speak a different language than the clients, a simultaneous interpreter may be used. Researchers examine more than the spoken words. They also try to interpret facial expressions, body language, and group dynamics. Moderators may use straight questioning or various projective techniques, including fixed or free association, story-telling and role-playing. Focus groups are often used to garner reaction to specific stimuli such as concepts, prototypes and advertising. It is often suggested that respondents feel group pressure to conform and this can contaminate the results. Others hold that by using trained and experienced moderators who appropriately manage the discussion, this potential problem can be mitigated. Further, despite the potential for groupthink, marketers and sociologists find that group dynamics are useful in developing new streams of thought and covering an issue thoroughly. Focus group discussions are not representative of the total population of the target consumers since this sample is not representative. This group is a window to the customers mind, bringing to surface things which the marketer may not have known about the consumer & his/ her views on many issues. Types of focus groups: Different types of focus groups include: i. Two-way focus group - one focus group watches another focus group and discusses the observed interactions and conclusions. ii. Dual moderator focus group - one moderator ensures the session progresses smoothly, while another ensures that all the topics are covered iii. Dueling moderator focus group - two moderators deliberately take opposite sides on the issue under discussion

iv.

Respondent moderator focus group - one or more of the respondents are asked to act as the moderator temporarily v. Client participant focus groups - one or more client representatives participate in the discussion, either covertly or overtly vi. Mini focus groups - groups are comprised of 4 or 5 members rather than 8 to 12 vii. Teleconference focus groups - telephone network is used viii. Online focus groups - computers and internet network is used Traditional focus groups can provide accurate information, and are less expensive than other forms of traditional marketing research. There can be significant costs however if a product is to be marketed on a nationwide basis, it would be critical to gather respondents from various locales throughout the country since attitudes about a new product may vary due to geographical considerations. This would require a considerable expenditure in travel and lodging expenses. Additionally, the site of a traditional focus group may or may not be in a locale convenient to a specific client, so client representatives may have to incur travel and lodging expenses as well. The use of focus groups has steadily evolved over time and is becoming increasingly more widespread. On Line Focus Groups: With the advent of large scale computer networks, such as the Internet, it is now possible to link respondents electronically. Respondents share images, data, and their responses on their computer screens. This avoids a significant amount of travel expenses. It allows respondents from all over the world to gather, electronically, while avoiding countless logistical headaches. Like in-person focus groups, online groups are usually limited to 8-10 participants. Such a system eliminates the logistical headaches and travel expenses associated with conducting focus groups. Many platforms even allow for a 'back room', so that clients can observe and talk among each other and with the moderator as the group proceeds, just like in-person focus groups, even though they are physically apart from the moderator. In this way, questions can be added in real time to further probe a particular response. Such a system prohibits participation on the different chat discussions based on the class of the participant (moderator, observer, and participant). In addition to the savings on travel, online focus groups often can be accomplished faster than traditional groups

because respondents are recruited from online panel members who are often qualified to match research criteria. Applications of Focus Groups: Some of the applications of focus groups are as under: a. Generating ideas for product improvements or new products. The discussions will focus on the customers currently face in using the product or as to how the product can be made more useful & this can suggest new directions for product research & development. Some customers in fact use some products innovatively & this can in fact lead to new uses of the same product which the firm can capitalize on. b. Understanding customer perceptions of competing brands. The firms brand is displayed along with the competing brands without revealing the identity of the clients brand & the consumers are encouraged to compare these brands. c. Testing new concepts. New product concepts, packaging prototypes, new distribution channels, new brand names, advertising art works, new commercials can be shown to the focus group to get their feed back. Customer Visits: A programme of customer visit involves visiting a predetermined number of customers to hold interviews with these customers & observe each customers experience. The visits are normally made by a team from different functional departments like R&D, production, marketing, logistics, etc. Specific objectives of the visit is developed & communicated to the customer well ahead. The purpose of the visit is to understand the customers experience & not to sell the product. Advantages of Customer Visits: There are several advantages of such visits. Some of them are as follows: a. It affords a good opportunity to understand customer requirements. Face to face interactions help to develop the specifications of the product jointly so that the product may be better fit of the customer requirements & also easier for the firm to produce. b. The technical staff from the factory & R&D can understand & respond to the customers thought process first hand & will help the whole process task oriented. c. The technical people will become more customer oriented since they understand the customer psychology & needs first hand rather than get to know from a third person from the marketing department. They feel confident that they are getting unfiltered information about the consumer behaviour without any biases brought in by the marketing people.

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d. Certain things can be learned not by interviews but by observing the actual handling of the product by the customer. In fact even logistics person of the firm may observe how the customer handles the packaging so that there could be some new ideas which may occur for improvement of packaging. Disadvantages & criticism of Focus Groups: However, focus groups also have disadvantages: The researcher has less control over a group than a one-on-one interview, and thus time can be lost on issues irrelevant to the topic; the data are tough to analyze because the talking is in reaction to the comments of other group members; observers/ moderators need to be highly trained, and groups are quite variable and can be tough to get together. Moreover, the number of members of a focus group is not large enough to be a representative sample of a population; thus, the data obtained from the groups is not necessarily representative of the whole population, unlike in opinion polls. A fundamental difficulty with focus groups (and other forms of qualitative research) is the issue of observer dependency: the results obtained are influenced by the researcher, raising questions of validity. The design of the focus group study (e.g. respondent selection, the questions asked, how they are phrased, how they are posed, in what setting, by whom, and so on) affects the answers obtained from respondents. In focus groups, researchers are not detached observers but always participants. Researchers must take this into account when making their analysis. Motivation Research: This type of research is directed at discovering the reasons for a persons behaviour. In consumer behaviour, motivation research is conducted to find out the conscious & subconscious reasons that motivate people to buy or not to buy a brand, to patronize or avoid a store, to accept or reject a marketing communication, etc. A number of techniques are used in motivation research: a. Non-disguised structured techniques: In this design, the research purpose will be obvious & may seek response along pre-specified response categories. The researchers often ask for opinions or attitudes on pertinent topics by using rating statements which clearly indicate the purpose of study & the responses like agree/disagree or true/false will make the response also unambiguous. Normally, political exit polls & referendums are examples of such design. b. Non-disguised non-structured Techniques: In this type, the purpose of the study is not disguised; but the consumer response categories are not predetermined. The questioning is open ended encouraging the consumer

to supply whatever answer he/she feels fit. This set is also known as unstructured interviews, qualitative interviews, non-directive interviews, etc. The researcher simply names a broad topic & encourages the respondent to talk about whatever he/she thinks, knows & feels about the topic. c. Disguised structured techniques: In this design, the real purpose is disguised; but the response categories are provided. For example, a researcher may ask- Of the following, who is most likely to own a Maruti 800 car: a. a professor, b. a student, c. an actor, or d. a mechanic. The respondents answer will reveal the image he/she holds of a Maruti 800 owner. d. Disguised non-structured techniques: In this neither the purpose of research is known to the respondent nor the response categories pre-structured. The respondent is given a fairly vague stimulus& is then asked to interpret the stimulus. These are also called as projection techniques. This technique is very helpful in uncovering motives that respondents would not knowingly & voluntarily reveal. The specific techniques used in this design are word association, sentence completion & story completion. a. Word Association: In this technique, the researcher either reads or flashes a set of words before the consumer who is instructed to respond with whatever word comes to his/ her mind. For example the word or expression instant coffee may bring out such associations as tasteless, ordinary, cheap, etc. revealing the reason this set of consumers may not buy this. Another group who are heavy users of instant coffee may respond with words like convenient, quick, invigorating, etc. b. Sentence Completion: This is similar to word association excepting that the respondent is presented with an incomplete sentence & is asked to complete the sentence. An incomplete sentence like- I drink instant coffee only when I am ______ might get such responses like- in a hurry, in the office, relaxing, at home, etc. c. Story Completion: The most popular form of story completion is Thematic Apperception Test(TAT). The Thematic Apperception Test has been amongst the most widely used, researched, and taught projective psychological tests. Its adherents claim that it taps a subject's unconscious to reveal repressed aspects of personality, motives and needs for achievement, power and intimacy,

and problem-solving abilities. The TAT is popularly known as the picture interpretation technique because it uses a picture (like in a product buying or usage situation) about which the subject must tell a story. The subject is asked to tell as dramatic a story as he/she can for each picture, including: -what has led up to the event shown -what is happening at the moment -what the characters are feeling and thinking, and -what is the outcome of the story. 2.2.4 Interpretative Research: This is another qualitative research method. In this method, the researcher observes a customer or a group of customers in their natural setting & interprets the behaviour based on an extensive understanding of the social & cultural characteristics of that setting. The researcher in fact becomes a participant observer of the scene. These are also called ethnographic studies. The purpose here is not limited to the buying behaviour of the consumer; it also covers the consumers lifestyle, his/her satisfaction level, the role of material objects & worldly activities in his/her life, etc. There are many advantages of interpretative research. First the researcher will be observing the behaviour of the consumer in the natural setting & hence the artificialness of surveys, focus group rooms, or other laboratory type settings are avoided. Second. The consumer is observed over a long period of time stretching from a few hours to a few weeks rather than a few minutes. Third, the researcher gets a first hand knowledge of the consumer behaviour rather than getting third party respondents reactions. Fourth, because of the extended mutual exposure between the researcher & the customer, a greater trust is built which can then lead to customer answers being more sincere & honest. Finally the customer activity being analysed & questioned is much more immediate & physically present. This method however has a few shortcomings. It requires highly skilled & well trained researchers who are less preoccupied with recording the responses than the interpretation of their observations. This is also very time consuming & quite expensive. The interpretation of data is quite subjective in spite of following certain analytical procedures. Finally these methods are good at generating hypotheses; but not at confirming hypotheses or suggesting any general principles.

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Quantitative Research: Quantitative marketing research is the application of quantitative research techniques to the field of marketing. It has roots in the modern marketing viewpoint that marketing is an interactive process in which both the buyer and seller reach a satisfying agreement on the "four P's" of marketing: Product, Price, Place (location) and Promotion. As a social research method, it typically involves the construction of questionnaires and scales. People who respond (respondents) are asked to complete the survey. Marketers use the information so obtained to understand the needs of individuals in the marketplace, and to create strategies and marketing plans. Both descriptive and inferential statistical techniques can be used to analyse data and draw conclusions. It involves a quantity of respondents sometimes ranging in number from ten to ten million, and may include hypotheses, random sampling techniques to enable inference from the sample to the population. Marketing research may include both experimental and quasi-experimental research designs. 2.3.1 Steps involved in Quantitative Research: There are five important steps involved in the research process: a. Defining the Problem: This involves problem audit and problem definition i.e. - What is the problem? What are the various aspects of the problem? What information is needed? b. Research Design: This involves conceptualization and operationalisation i.e. - How exactly do we define the concepts involved? How do we translate these concepts into observable and measurable behaviours? a. Hypothesis specification: What claim(s) do we want to test? b. Research design specification: What type of methodology to use? - examples: questionnaire, survey c. Question specification: What questions to ask? In what order? d. Scale specification: - How will preferences be rated? e. Sampling design specification - What is the total population? What sample size is necessary for this population? What sampling method to use?- examples: Probability Sampling:- (cluster sampling, stratified sampling, simple random sampling, multistage sampling, systematic sampling) & Non- probability sampling:(Convenience Sampling, Judgment Sampling, Purposive Sampling, Quota Sampling, Snowball Sampling, etc. ) c. Data Collection: Use mail, telephone, internet, mall intercepts. Make adjustments to the raw data so it is compatible with statistical techniques and with the objectives of the research examples: assigning numbers, consistency checks, substitutions, deletions, weighting, dummy variables, scale transformations, scale standardization d. Analysis:

a. Statistical analysis - Perform various descriptive and inferential techniques on the raw data. Make inferences from the sample to the whole population. Test the results for statistical significance. b. Interpret and integrate findings - What do the results mean? What conclusions can be drawn? How do these findings relate to similar research? e. Report Writing & presentation- Report usually has headings such as: 1) executive summary; 2) objectives; 3) methodology; 4) main findings; 5) detailed charts and diagrams. 2.4 Experimental Methods: One limitation of the survey method of quantitative marketing research is that the questions are limited to assessing consumer opinions& thoughts. In respect of behaviour, these survey methods can only measure what the respondents say they will do; not what they actually do. To avoid this problem experimental methods are used. An experiment is a method in which the researcher places respondents in a situation that does not normally occur & then observes & records their response. On important example of this method is Test Marketing. 2.4.1 Test Marketing: A test market, in the field of business and marketing, is a geographic region or demographic group used to gauge the viability of a product or service in the mass market prior to a wide scale roll-out. The criteria used to judge the acceptability of a test market region or group include: 1. A population that is demographically similar to the proposed target market; and 2. Relative isolation from densely populated media markets so that advertising to the test audience can be efficient and economical. The test market ideally aims to duplicate 'everything' promotion and distribution as well as `product' - on a smaller scale. The technique replicates, typically in one area, what is planned to occur in a national launch; and the results are very carefully monitored, so that they can be extrapolated to projected national results. The `area' may be any one of the following: * Television area * Test town * Residential neighborhood * Test site A number of decisions have to be taken about any test market: * Which test market? * What is to be tested? * How long a test?

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* What success criteria? The simple go or no-go decision, together with the related reduction of risk, is normally the main justification for the expense of test markets. At the same time, however, such test markets can be used to test specific elements of a new product's marketing mix; possibly the version of the product itself, the promotional message and media budget, the distribution channels and the price. In this case, several `matched' test markets (usually small ones) may be used, each testing different marketing mixes. Clearly, all test markets provide additional information in advance of a launch and may ensure that launch is successful: it is reported that, even at such a late stage, half the products entering test markets do not justify a subsequent national launch. However, all test markets do suffer from a number of disadvantages: 1. Replicability - Even the largest test market is not totally representative of the national market, and the smaller ones may introduce gross distortions. Test market results therefore have to be treated with reservations, in exactly the same way as other market research. 2. Effectiveness - In many cases the major part of the investment has already been made (in development and in plant, for example) before the `product' is ready to be test marketed. Therefore, the reduction in risk may be minimal; and not worth the delays involved. 3. Competitor warning- All test markets give competitors advance warning of your intentions, and the time to react. They may even be able to go national with their own product before your own test is complete. They may also interfere with your test, by changing their promotional activities (usually by massively increasing them) to the extent that your results are meaningless. 4. Cost- Although the main objective of test markets is to reduce the amount of investment put at risk, they may still involve significant costs. Simulation & Virtual Reality Techniques: The considerable amounts of time and resources necessary to conduct test markets restrict the amount of test markets which can be conducted by companies. The risk to reveal a new product design too early is another concern for companies in fast moving and highly competitive markets, which is independent from any cost & time considerations. To overcome these limitations a new type of test markets, so called Virtual Test Markets, was devised. Virtual Test Markets are computer simulations of consumers, companies and the market environment. The technological basis for this kind of

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test market is a Multi-agent system as well as methods from Artificial Intelligence. In a Virtual Test Market, new products or marketing and distribution strategies can be tested without the risk and time constraints discussed above. Another advantage is the ability to test many different products in one Virtual Test Market as the computer simulation can always be reset to the original situation before the introduction of a new product. Advanced computer technology including graphic ability is now available to simulate the entire procedure on computers. To do this the real world store environment is mimicked on the computer. For example the computer can show store shelves with the test brand & other brands displayed exactly as they would be in the real store. The advertisements, aisle displays, shelf tags, store specials, point of purchase ads, manufacturers coupons, etc. are all displayed & made available on the computer. The consumer sits on the computer terminal & goes on a weekly shopping trip. His or her purchases are automatically recorded by the computer. 2.5 Secondary Research: Secondary research (also known as desk research) involves the summary, collation and/or synthesis of existing research rather than primary research, where data is collected from, for example, research subjects or experiments. A researchers first attempt should always be to study secondary data since they already exist & can save the expense of collecting primary data. However often the secondary data is outdated or the information sought by the researcher may not exist. Then there is no other choice but to go for primary research. There are two types of secondary data: a. Public sources & b. Proprietary sources. a. Public Sources: Secondary data from public sources are mostly government, semi government or industry associations. Some such sources in India are Census of India; National Readership surveys (NRS), National Council of Applied Economic Research (NCAER), Bombay Stock Exchange Directory, and Centre for Monitoring Indian Economy (CMIE), etc. b. Proprietary Data: Such data is normally collected by private business firms for their own use or they could be firms who are in the business of collecting & marketing such information. Some such sources are Thompson Urban & Rural Indices, Kotharis Industrial Directory, etc.

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2.6

Managerial application of consumer research in marketing There are a number of applications of consumer research & some of them are discussed in the following paragraphs: Attitude Research: A persons evaluations of an object such as brand or service can be measured by various types of scales. c. Semantic Differential Scale: In this method, the respondent is asked to rate the object in terms of pairs of traits for example- like/dislike, agree/disagree, poor/excellent, effective/ineffective, etc. d. Likert Scale: In this method the respondent is asked to giving a numerical rating to the extent to which they agree or disagree with a statement. For example the respondent s response is requested by circling the appropriate number from the options as under: 1. Strongly agree, 2. Agree, 3. Undecided, 4.Disagree, & 5. Strongly disagree e. Pictorial scale: Pictorial scales are used for less literate respondents or respondents who speak a different language. Pictures of various facial expressions can also be used when the research purpose is to measure the emotions the respondent experiences. They can also be useful for researching children as customers. Image/Self-concept Measurement: Consumers own self image & also their image of specific brands & services can be measured by using semantic differential scale likemodern/traditional, economic/uneconomic, pleasant/ unpleasant, feminine/masculine, etc. The researchers present a series of statements about possible activities, interests, opinions, etc. & the respondents indicate their agreements or disagreements with these statements. Some of the examples of such psychographics which are measured are- child-oriented, optimist, price conscious, fashion conscious, etc. Multiattribute Attitude model: A consumers attitude towards a brand or service can be a result of his/her beliefs about a set of attributes or characteristics of the brand. Each attribute may have different weightage for the consumer. Hence consumers perceptions or beliefs about the attributes of the product are measured first & then the importance assigned by the consumer for these attributes are measured. Then the weighted average is calculated for each of the attribute which will give the multiattribute attitude of the person. Perceptual or preference mapping: Perceptual mapping is a graphics technique used by marketers that attempts to

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visually display the perceptions of customers or potential customers. Typically the position of a product, product line, brand, or company is displayed relative to their competition. Perceptual maps can have any number of dimensions but the most common is two dimensions. Any more is a challenge to draw and confusing to interpret. The perceptual map below shows consumer perceptions of various automobiles on the two dimensions of sportyness/conservative and classy/affordable. This sample of consumers felt Porsche was the sportiest and classiest of the cars in the study (top right corner). They felt Plymouth was most practical and conservative (bottom left corner).

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Cars that are positioned close to each other are seen as similar on the relevant dimensions by the consumer. For example consumers see Buick, Chrysler, and Oldsmobile as similar. They are close competitors and form a competitive grouping. A company considering the introduction of a new model will look for an area on the map free from competitors. Some perceptual maps use different size circles to indicate the sales volume or market share of the various competing products. Eye Movement: A number of methods are available for conducting research by quietly observing the consumers as to what information they are acquiring & evaluating. An eye camera is a devise to capture the pupil movement as the consumer looks through a piece of information. This method can be used to study consumers information acquisition while reading or viewing an advertisement, looking at aisle displays, examining the package information in a supermarket, etc. The researcher uses the data gathered by

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the eye camera to identify the information at which the consumer gazed the longest. Such studies help the researcher to pinpoint the selective appeal & use of information by the consumer. Galvanic Skin Response: Galvanic skin response (GSR), also known as electro dermal response (EDR) is a method of measuring the electrical resistance of the skin. There has been a long history of electro dermal activity research, most of it dealing with spontaneous fluctuations. There is a relationship between sympathetic activity and emotional arousal, although one cannot identify the specific emotion being elicited. The GSR is highly sensitive to emotions in some people. Fear, anger, startle response, orienting response and sexual feelings are all among the emotions which may produce similar GSR responses. This concept is used to indicate the consumers response to a stimulus, such as an item of advertisement (like price) or an emotional story line of an advertisement. Electroencephalography: Electroencephalography is the neurophysiologic measurement of the electrical activity of the brain by recording from electrodes placed on the scalp or, in special cases, subdurally or in the cerebral cortex. The resulting traces are known as an electroencephalogram (EEG) and represent a summation of post-synaptic potentials from a large number of neurons. These are sometimes called brainwaves, though this use is discouraged, because the brain does not broadcast electrical waves. The EEG is a brain activity test. One of the activities measured in this way is called Alpha activity. Alpha activity inversely measures the brains attentiveness. Alpha activity is high when we are sleeping, resting or inactive. This will be low when we are paying attention to a commercial. When measured while viewing different ads, they will indicate the ads ability to attract & hold viewers attention.

2.7

Defining consumer Decisions

2.7.1 Introduction: Various sociological, cultural & psychological factors influence & contribute to different patterns of consumer behaviour. In addition to these we will also have to look at situational variables. We have to understand as to how situations & internal & external sources of influence affect the purchase decision process. This comprises of a series of activities like problem recognition, information search, evaluation, selection, outlet choice, decision to purchase, purchase & post purchase processes & activities. Both cognitive (thinking) & emotional

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(feeling) factors are required to be studied at each stage of the decision making process. 2.7.2 Definition of Consumer Decisions: Decision is the process of selecting an option from more than one choice. There could be several examples of decision making in a purchase process like: a. Whether or not to make a purchase. b. Whether to buy brand x or brand y. c. Whether to purchase from store x or store y. d. Whether to purchase with cash or credit card. It is hence clear that the scope of consumer decision is much broader than the mere selection of one brand from a choice of several brands. 2.7.3 Scope & Levels of Consumer Decision Making: The Consumer Decision Making process takes place in various steps like problem recognition, information search, evaluative criteria, actual evaluation process, outlet selection, the purchase process as also post purchase behaviour. Consumer decision process also involves various factors which affect the decision making & also there will be many factors influencing the actual decision making process. There could be situational influences like the communications, purchase dispositions, usage, social influences, etc. There are many models proposed by many marketing experts to describe & predict the consumer decision making process. We shall try to cover all these subjects in this unit. 2.7.4 Models of Purchase Decision Process: There are many different models to explain how consumers make purchase decisions. We will consider four models based on differing views of consumers psychology. a. Economic View: This is the case of assuming the consumer to be highly rational. Theoretical economics is based on this assumption which depicts the consumer to behave perfectly in a world of perfect competition. For this view to be universally applicable the consumer has to have a thorough knowledge of all available alternatives; he should be capable of ranking them in a perfect way in terms of their features & benefits; and finally be capable of identifying the best of all these alternatives. Realistically however this is hardly true & such a perfect world does not exist. The classic economic model is also unrealistic due to following reasons: i. Consumers are bound by their pre existing habits, reflexes & skills.

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ii. They are also constrained by their values & goals iii. They have their limitations of their knowledge. The consumers are in an imperfect world in which they can not make their decisions on perfect economic considerations of price quantity relationships, marginal utility, indifference curves, etc. In most situations a consumer may be happy to settle for a good enough or satisfactory decision making process & the economic model has been rejected often for being too idealistic & simplistic. On example is that of one research finding of the purpose of bargaining by consumers. It has been found by research that the motivation for bargaining in most situations may not indeed be the desire for a better price as is normally thought of. It has been established that the real motivation in many cases be related to the need of the consumer for achievement, affiliation or dominance. b. Passive view: Many sales people of the old generations were of the view that the consumers can be manipulated into purchase decisions & the consumers were thought of as impulsive & irrational in their decision making. They were hence assumed to be submissive to aggressive promotional efforts of the super sales people. This model fails to recognize that the consumer plays an important role in buying decisions. Sometimes they collect all relevant information & carefully evaluate all the alternatives before arriving at the decision to purchase considering the best alternative which would satisfy their need to the fullest extent. At other times they may purchase a product impulsively to serve their emotion or mood at that moment. There are also situations wherein they are likely to follow the advise of the opinion leaders. In most of these situations the consumer can not be considered as passive & hence capable of manipulation. Hence this simplistic view can also be considered as unrealistic. c. Cognitive View: In this model the consumer is considered as a rational problem solver. In this view the consumer is supposed to actively search for all the information when they have to select a product or service to fulfill & enrich their lives. This model focuses on the process of seeking & evaluating the information

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about the products & stores for making the purchase decision. Information processing is the major factor in this model. This model however recognizes that this process does not happen every time the consumer wants to buy a product. It also predicts that the consumers will stop seeking information at some stage when they feel that they have sufficient information to take that particular decision satisfactorily. The consumer is also found to take some short cuts in decision making in many situations & such shortcuts are called heuristic. There is also a possibility of the consumer getting overloaded with excess information & they are known to cope with such situations also in a suitable manner. The cognitive view is somewhere between the economic view of a perfect consumer making perfect decisions & a passive consumer who is easily manipulated. The consumer in this model is not attributed with total knowledge; but he is actively involved in seeking & evaluating information on various alternatives to his satisfaction. In this view goal setting is of primary concern for the consumer & each decision making involves clear cut goals & the evaluation of alternatives with respect to these goals. For example he may want a detergent for the clothes which not only gives a good wash but also ensure that the colours dont run & result in fading of coloured clothes. d. Emotional View: It is easier for marketers to adopt suitable marketing strategies in case of either economic or passive models. In reality however the consumer goes through various emotions while purchasing a product or a service & these feelings or emotions can be highly involving to the consumer in many situations. A large number of the purchases made by consumers are quite impulsive, based on their emotions at the time of purchase & in such cases there is no careful searching, deliberations & evaluation of various alternatives before buying. This does not mean that such decisions are totally irrational. Products which offer emotional satisfaction are also perfectly rational consumer decisions. Many designer products make use of this factor to market their products by stressing that the consumer deserves this product although very expensive. Many consumers feel better when they make such expensive purchases on an impulse based on their emotions. Mood which is a temporary emotion is also important

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2.7.5

in a consumer decision making process. A retail environment makes use of this factor to create a positive mood for the consumer to make a decision to purchase. However compared to emotions, moods are lower in intensity. It has also been established by research that the consumers in positive moods recall the brands for a longer period than those in a negative mood. Situational Influences It has been established that the consumers do not respond to stimuli like advertisements in isolation. They are influenced by both the stimulus as also the situation. The situation is the set of factors separated from the consumer and also the primary stimulus to which the consumer is responding. There are four situations which affect the consumers decision making as a response to a stimulus. a. Communications Situation: When the stimulus is received by the consumer as a communication, the response depends on the situation in which this is received. For example, the response will depend upon whether the one is in a group or alone, in a good mood or a bad mood, in a hurry or relaxed, etc. Only when the consumer is in a receptive communication situation the message of the marketer will be effective. However it is very difficult to always find all the potential customers in a favourable communication situation at all times. b. Purchase Situation: The actual product selection will again get influenced by the situation at the time of purchase. The company in which the consumer is, the shortage of time, etc. will decide as to many decisions like choice of the shop, the number of brands considered, & the price at which the consumer is prepared to buy. c. Usage Situation: The usage of the product will be influenced by the situation at the time of consumption. Many advertisements make use of this fact to communicate to the customers how their products create satisfaction in relevant consumption situation. It has also been proven that expanded usage situations can be successfully used to improve the sales of a well established product. d. Disposition Situation: The new environmental awareness of the consumers have compelled the marketers to create a favourable disposition situation i.e. the disposal of the used product in a proper way. Some consumers prefer the products which can easily

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be recycled. Socially responsible disposition situations are affecting the way the consumers decide on a product purchase. 2.8 Consumers as decision makers When we describe consumers as decision makers, it gives a picture of an individual carefully evaluating the features of different brands & selecting very carefully after many deliberations, one brand that has all the required attributes at the least cost. This process is very rational & functional. This is only part of the true process which takes place & that too while taking very important decisions. In many other situations, there could be very little conscious effort on the part of the consumer while making a purchase decision. There could be some other situations wherein the consumer may be taking brand purchase decisions based more on feelings & emotions rather than the attributes & features of the brand. The consumer in such situations is likely to imagine his/her feelings or the reactions from others in the society with whom he/she may be interacting while using or consuming the product. Most of the times, the consumer will be involved in making a decision to take care of a single problem, for example- buying of a dress. At some other times the consumer may face a convergence of several problems- for example: whether to buy a ready made dress or buy the cloth & get it stitched- if so from where & what garment design. As the decision making process starts the simple problem in the beginning may evolve into more complex stages. A consumer who sets out to buy a dress may decide to go to a mall where he/she may get to buy not only a dress; but there could be some fast food place to eat something & then probably watch a movie in a multiplex. Depending on the level of involvement the consumer may go through different levels of complexities in decision making. We can consider different types of decision making situations based on several factors. However one should keep in mind that these situations & levels of decision making are not totally distinct from one another & there could be overlapping of these situations in actual practice. The effort required for the search & other decision making processes vary with the relative complexity of the decision. Depending on such effort level, the decision making process can be divided into different categories. While studying these situations one should consider two types of involvement- purchase involvement & product involvement. 2.8.1 Purchase Involvement: This is the level of concern for or interest in the purchase process triggered by the need to consider the particular purchase. This could in most situations be a temporary involvement & it happens mostly for an individual or household. This could be the result of the interaction individual, product & situational characteristics. There could be some situations where the purchase

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involvement could be very low level although the consumer may have strong brand loyalty. For example, the consumer may be very loyal to a particular brand of toothpaste; but when he/she goes for the purchase the process could be a very routine type involvement in the purchase process without much thought because of several reasons like time pressure. Purchase involvement is different from product involvement which is normally a long enduring involvement with strong brand loyalties. There could be different processes of purchase depending on the involvement level of the purchase process. These are described in the following paragraphs: 2.8.2 Habitual Decision Making (Nominal Decision Making or Routine Problem Solving): This is the strategy used for purchase problems which have been solved previously. The consumer has the experience & well established criteria with which to evaluate the purchase decision choices. If at all required there could be a minor effort to collect some additional information which may not be very critical. This is quite common in business to business situations wherein the search costs are normally very high & hence most of such purchases are routinised. In this situation, there is no decision making involved since there is only a single preferred decision for the brand to be purchased & there will not be any evaluation of alternatives unless the preferred brand fails to perform as expected. When there is low involvement with the purchase this process occurs. This is true of most routine purchases of the daily usage products wherein the family members have fixed preferences & these products may be picked up from the store shelf without even checking the price or the other brands. Such a decision making process may be again bifurcated into two categories- brand loyal decisions & repeat purchases 2.8.2.1 Brand Loyal Decisions: In the initial stages of selection of the brand of a particular product, the consumer may be highly involved in the purchase process with a lot of deliberations regarding various alternatives, their attributes, their prices, etc. After having decided the particular brand & purchasing it, the consumer may be very happy with this decision. The consumer gets committed to the brand in such situations since he/she believes that this brand meets the needs to the best extent & there will be an emotional attachment to the particular brand. This is the brand loyalty which is very difficult to be broken by the competitors. In such situations there will be a high degree of product involvement but a low degree of purchase involvement because of the brand loyalty. If this consumer really wants to change the brand at some point of time it will mostly involve a high degree of involvement in the purchase process with a lot of thinking of various alternatives & their attributes. 2.8.2.2 Repeat Purchases: Their may not be much brand loyalty & the consumer may feel that all the brands are more or less same. This particular purchase may not be very important from the consumers perspective & hence he/she may just repeat the same brand more

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out of habit than due to any loyalty. If at any point of time the consumer decides to try a new brand due to some external stimuli like an effective advertisement or some in-store promotion, this consumer may not think much before switching the brand. 2.8.3 Limited Decision Making: This strategy is adopted when the cost & risks involved are not very high & the product is not very complex in terms of its technical features. There is a familiarity of the product but there is also a desire for variety or the previous choice is not readily available. In such situations the consumer invests very limited time & effort for the purchase decision. In this case the consumer may involve in limited search, very few alternatives, simple process of decision parameters or attributes & very limited prepurchase evaluation. This is somewhere between Habitual Decision Making & Extended Decision making & it somewhat resembles habitual decision making in its simplest form. For example the consumer may just decide on buying the cheapest available brand of detergent & just buy a brand which is the cheapest among the alternatives displayed in the store at that time. Limited decision making may also happen when there is an emotional or environmental need. The consumer may just change the brand to try out something new although he/she may be perfectly happy with the current brand. The decision making in such a case may involve only checking up some new brands & novelty aspects. Another example is that of a consumer trying out another option depending on the anticipated reaction from the friends or relatives. For example the teenager may decide to buy a new brand just because the friends may approve that brand although he/she might have been happy with the earlier brand. Limited Decision Making is hence involving internal & limited external search & a few alternatives are evaluated on the basis of limited number of attributes& selection rules. There is very little evaluation of the actual purchase & use of the product post purchase unless there is a product failure or some post sale service problem. 2.8.4 Extended Decision Making: This strategy is required in situations wherein the purchase costs are quite high & the risk of a wrong purchase is also pretty steep. This could also be true when the product itself is very complex or when the consumers ego is involved. In these situations the consumer has no established criteria for evaluation of alternatives. There has to be an extensive effort involving more deliberations & also in some cases more number of people. Such decision making is most likely when the consumer has a high involvement with the product. Certain facilitating conditions are also necessary for this strategy. The most important is the availability of adequate time for the decision making. If the decision has to be taken quickly such extended problem solving exercise will not be feasible. The other condition is the availability of sufficient information. Insufficient or inaccurate information also can result in delay in decision making in such cases. The third condition is the capability of the consumer to evaluate various alternatives. If the consumer gets confused & is not able to process the information of different choices,

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there could be delay in the process. In this situation, the consumer is involved in an extensive internal & external search for information followed by a complex evaluation of various alternatives & there will also be a likelihood of serious post purchase evaluation. This happens due to high level of purchase involvement. Even after the purchase there could be a doubt about the correctness of the decision & hence there could be a thorough evaluation post purchase. Very few decisions of the consumer are likely to reach this level in daily life situations. The products which are normally at this level are appliances like stereo systems, personal computers, refrigerators, air conditioners, etc., automobiles, houses, & so on. Even highly emotional decisions like buying some birthday gift for the boy friend or girl friend would involve high level of decision making. 2.9 Consumer Decision making process The process of consumer decision making consists of various steps as follows: 2.9.1 First Step: Problem Recognition: The decision process begins with this step. The consumer first notices & recognizes the need to be satisfied or problem to be solved for fulfilling some need. A consumer feels the thirst & looks for water or a beverage. Another consumer finds that the ink in his pen is over & hence looks out for a refill. Problem recognition is the state in which the consumer feels the need to buy something to help him/her get back to the original state of physical or psychological comfort. There are two types of stimuli which result in problem recognition: 1. Internal Stimulus: This is internal state of physical or psychological discomfort felt by the consumer, for example- hunger, thirst, boredom, etc. 2. External Stimulus: This is the outside influence like an advertisement of a product, or the fresh bread smell near a bakery which would stimulate the need in the mind of the consumer. The external stimuli can influence a consumer in three different states of mind. i. When the consumer has already recognized the problem & is looking for a solution. This is when the consumer may even actively pursue the external stimuli like advertisements or the salesmen to look at various alternatives. ii. When the consumer had recognized the problem in the past but was not able to find a solution for various reasons like not having the time, not a priority, etc. For example a consumer wanted to buy a microwave oven which was getting postponed & when a neighbour bought a

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microwave oven, the need surfaced strongly to push the consumer to look at alternatives. iii. When a problem which was dormant was not recognized in the past. This happens with most of the technological advances & innovations. The consumer who would have been happy with an old product may feel that the old product not satisfying his/her need when the new product is advertised. For example, before the e mail the consumer never recognized the normal snail mail which took so much effort, cost & delay as a problem. Based on these facts there are two types of demand for a product or a service: 1. Primary Demand: This is the demand for the category of the product or service itself which seeks to convert a non buyer of this into a buyer. All the marketing efforts for promoting a new product or service are to generate the primary demand. This is done normally by educating the consumer about the benefits of the new product/service & also as to how this can solve a problem which has not been noticed or recognized till now. 2. Secondary or selective demand: This is the conversion of the demand from one brand to another. In mature markets of any product the marketers concentrate on the secondary demand creation. There has been a controversy in the basic function of marketing- whether it is to create a need or whether it is satisfy an already existing need. Many people argue that no one needed many of the products like a video camera, a mobile phone etc. & that high profile marketing efforts created such demand. However when one defines the needs in proper perspective, incorporating the principles of Marketing Myopia, it is easy to figure out how these new concepts & products are catching up & why these are just satisfying the dormant needs of a consumer. 2.9.2 Second Step: Prepurchase Search: This is the second step in the consumer decision process. Once the problem has been recognized by the consumer, the next step is to search for relevant information to solve the problem. This search is confined to a set of brands which can be classified as follows:

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1. Awareness Set: This is the set of brands which the consumer is aware of. 2. Recalled Set: This is the set of brands which the consumer can remember when deciding. 3. Considered Set: This is the set of brands which the consumer considers for the final selection after discarding the other brands The prepurchase information may be obtained from various sources like advertisements, brochures, salesmen, shop displays, company website, etc. which are basically given by the marketer. The consumer may also get the information from friends & acquaintances or from his/her own past experience. Nowadays there are many other sources most important of which, is the internet which can produce a huge number of alternatives to the consumer, whether he/she intends to buy the product/service online or offline. In fact some researchers have listed the following benefits of an internet search which is responsible for the phenomenal popularity of this medium: 1. Cost: the internet offers the lowest cost for information search which is the most attractive feature of this source. 2. Selection: The consumers are able to get a fairly large number of alternatives by searching the internet very quickly. 3. Reliability: The consumers find the internet sources more reliable than even the store salesmen or advertisements. In fact many websites, blogs, etc. which encourage actual consumer reviews have increased the credibility of this information. 4. Quick product comparison: There are many sites which give product comparisons & this has again helped the consumers in taking more informed quick decisions which would have been either too laborious or time consuming before the advent of this feature in the internet. The extent of search effort by a consumer depends on many factors. These are as under: 1. Perceived Risk: This is the extent of loss incurred by the consumer if a wrong decision is taken by him in the buying process. There can be many risks involved in making a purchase decision by a consumer like: a. The product may not perform as well as the expectation.

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b. Your immediate social circle may disapprove. c. The consumer may not be feeling comfortable psychologically with the product although it may not have any product related problems. d. There may be another equivalent brand which is lower in price or the same brand may be available at a cheaper rate at some other outlet. e. This product may become obsolete in the near future & the new products may have much better features. When the perceived risk of the buyer is high he/she is likely to go for extensive search. The consumer may not find much risk in routine purchases & hence may not seek a lot of information before the purchase decision. 2. Involvement: This is the perceived importance of the product for the consumer. There are some products which a consumer buys routinely without much thought & there are some products which will involve a great deal of involvement & care of the consumer in decision making. This depends on how the consumer considers the importance of the product either financially or psychologically. Sometimes the emotional involvement of the consumer in a buying decision may be high although the cost of the product/service may not be high. Such high purchase decision involvement results in extensive search of prepurchase information. 3. Experience: The consumer may have the previous experience with the product or the brand which will lead to less extensive search for prepurchase information. In such situations the purchase decisions will be routinely made. This may get disturbed only in certain situations like: a. When the experience is not satisfactory after the previous purchase. b. When there are some new innovations & products introduced in the market after the previous purchase. c. When the consumer is interested in an assortment of different brands of the same product. d. If the previous experience is quite old & there is an urge to reconsider e. When the perceived risk of wrong decision is high even with the previous experience.

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f. When the consumer is highly involved with the product & hence enjoys the entire experience of evaluating various alternatives. 4. Urgency: when there is urgency for taking the decision quickly the extent of search gets restricted. Many marketers have taken advantage of this aspect & have devised marketing strategies aimed at consumers who value time by offering products & services which would save time for them. 5. Brand Parity: when the competing brands are not very distinguishable from each other, the consumer has to resort to more search efforts in terms of getting more reviews by past consumers or by comparing their features more extensively. Sometimes, too much information results in the consumer getting confused as to how to sort out this excessive information. Many products are advertised with so many features that the consumer finds it very difficult to understand the relative importance of these features which could result in a decision which may not be favourable to the marketer. Hence it is important for the marketers to consider carefully what information is important from the consumers perspective & avoid excessive information which is termed as information overload. 2.9.3 Third Step: Evaluation of Alternatives: After completing the search of relevant information, the consumer has to evaluate the various alternatives. For this purpose we have to first understand how consumers make choices. There are different methods by which a consumer makes a choice, some of which are discussed here: i. Affective Choice: This is based on the feelings of the consumer rather than the actual benefits of the product or service. Buying of a dress, having a holiday, etc. will normally involve the anticipated feelings of the consumer while using the product or service. The decision will be based mostly on such anticipated feelings rather than the attributes of the product or service. In such situations, marketers have to design products & services which will provide appropriate emotional response in the consumers. The advertising strategy also has to take care of helping the consumers visualize how they will feel while consuming the product or service. The advertising campaign Gods own Country for Kerala Tourism was very effective in following this strategy to evince the right emotions & feelings for the travelers looking for such experience of nature. ii. Cognitive Choice: This is based on the rational comparison of various attributes of the product or service. This requires the knowledge of all the relevant attributes at the time the choice is made & also it involves the comparison of each attribute of various brands. This requires a lot of time & effort & generally

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results in an optimal decision. Such choice is more relevant in the case of more complex decision making when the cost of purchase is high & the perceived risk of wrong decision is also high. This approach is also resorted to when the relevant brand wise information on various attributes are readily available. Many marketers use this strategy to introduce brands which are lacking in strong brand image or reputation in a competitive market. iii. Attitudinal Choice: This involves the general attitudes, impressions & intuitions of the consumer rather than an informed choice. A variety of situations force a consumer to go for this type of choice in preference to other types. Time pressure, lack of relevant information, etc. would result in a consumer decide on this method. Many marketers follow a dual strategy for important & expensive products & services by targeting both types of consumers viz. those going for cognitive choice as well as those going for attitudinal choice. 2.9.3.1 Criteria for Evaluation : The various dimensions, features, & benefits which a consumer looks for in response to the recognized problem are termed as evaluation criteria. These are mainly the product benefits & features as well as the costs. There are various evaluative criteria used by consumers while making purchase decisions. These criteria can differ in type, number & importance. The type of criteria can be tangible factors like cost & performance features or they can be intangible benefits like style, taste, image, etc. The number of criteria can vary from can vary from product to product & normally these are limited in case of simple products & more in case of complex decisions like buying a house or an automobile. The importance of criteria may vary among different consumer segments or even from consumer to consumer. Depending on the relative importance of each criterion the ultimate decision of purchase may vary. a. Measurement of evaluative criteria: It is important for a marketer to determine the following factors to decide on a suitable marketing strategy: i. The evaluative criteria used by a consumer ii. How the various alternatives are perceived by the consumer on each criterion iii. The relative importance of each criterion b. There are direct as well as indirect methods used to measure evaluative criteria. In direct methods simple straightforward questions are asked & the

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consumers are assumed to provide correct data on desired attributes. Indirect methods like projective techniques are used to get results by asking indirect questions & here the assumption is that the consumers will not or can not express correctly the evaluative criteria. Perceptual mapping is another technique of indirect collection of data by ranking different brands indicating pairs of brands & pairs of attributes which are similar. Conjoint analysis is another most popular indirect method. In this method, the consumer is asked to rank a set of product descriptions in which evaluative criteria vary in each description. Many times what are known as Surrogate indicators are used to evaluate consumers evaluation of alternatives. A surrogate indicator is an attribute used to stand for or indicate another attribute. For example price has been found to influence the perceived quality of many products. Higher the price, higher is the consumers confidence in the product. Hence price has been the most popular surrogate indicator in such studies. 2.9.4 Fourth Step: Outlet Selection & Purchase: In this step the consumer has three alternatives for the final purchase process. 1. Brand first & Outlet later: In the discussions so far only the brand selection process has been dealt with in detail. It has been assumed that the consumer will first decide on the brand of the product which he wishes to purchase & then select the store from which to purchase based on various parameters like the lowest price, easy access, good image, good service, etc. 2. Outlet first & Brand later: Many consumers may follow this alternative for certain products. In such cases the consumer may be familiar with some store which is regularly patronized & hence he/she may visit this store for purchasing the product. 3. Brand & Outlet simultaneously: When the consumer has no particular preference for either the brands or the stores, he/she may visit a couple of stores & evaluate the brands in all these outlets on the spot. The final purchase decision may be taken on the basis

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of the attributes of both brands & the stores. For example the consumer may prefer to buy a second best product from a store which is perceived as giving better after sales service. Even the final purchase process can be further broken into three sub-steps: a. Preferred Brand identification: Based on the various evaluative criteria & the process of choice model, the consumer identifies the brand which he/she prefers to buy. b. Purchase Intent: At this stage the consumer finally decides & determines that he/she will go ahead with the purchase. This requires the consumer having the necessary funds/ budget approval for making the purchase. c. Purchase implementation: This is the final stage of the purchase process. This involves finalization of payment terms, seeking & obtaining the transfer of title or ownership, making the payment & receiving possession. While going through these steps there could be delays due to various reasons. Some of the factors which could cause this are- lack of time, need for more information, inability to afford the product at that point of time, etc. If the marketers can understand the correct reasons for such delays by consumers they can devise their strategies to overcome these problems to push the consumer for taking the final step. The final step of purchase can also get altered when the consumer decides to deviate from the identified choice. This could happen due to several reasons likea. The identified brand may be out of stock. b. Some new information either in the store or from some new external source may reopen the evaluation process. c. Financial terms offered by the store may not be feasible for the consumer who may decide either to abandon the purchase or change the brand. 2.9.4.1 Consumer choice selection models ;

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2.9.4.2

2.9.4.3

2.9.4.4

2.9.4.5

There are some models of selection of choices by consumers & most of these models are only indicative & not very precise since the mental processes of consumers are often unconscious & & unpredictable. These models try to predict how a consumer tries to organize the attributes of different brands & evaluate them to arrive at his/her choice. There are two types of such models- compensatory & non-compensatory. Non compensatory models consider that very good performance of one attribute can not compensate for the poor performance of another attribute. We shall cover four non-compensatory models & one compensatory model in this unit. Each model will yield a different choice. Hence, the marketers should first understand as to which model is most suitable for explaining the decision making process of their target customers & accordingly decide on positioning & promotional strategies for their brand. Compensatory Model: In this model, the consumer will average out some very good features with some less attractive features of a brand in determining the overall preference for the brand. The compensatory decision model states that the brand that rates highest in the sum of the consumers judgments of the relevant evaluative criteria will be chosen. In this model the total mix of the relevant attributes must be considered to be superior to those of the competition. Conjunctive Model: In this model, the consumer establishes the minimum required performance standards for each evaluative criterion & selects the first of all brands that surpasses these minimum standards. Since individuals have limited ability to process information, this model is frequently used to reduce the size of the information processing task to a manageable level. This model is often used to eliminate the alternatives which are out the consumers price range, or they are outside the preferred location or they do not offer some desired features. This model is often used in purchases of products like houses, automobiles, computers, mobiles and also low involvement products. In all such cases the consumer will select the first brand which meets all his minimum requirements. Disjunctive Model: In this model the consumer establishes a minimum level of performance for each important attribute. All brands which surpass the performance level for any key attribute are considered acceptable. When this model is used, it is critical to surpass the consumers requirement on at least one of the key criteria. In this model, since the consumers are supposed to purchase the first brand which exceeds one of the important retirements, extensive distribution & predominant shelf space in a store display play vital roles. Elimination-by-aspects model: This requires the consumer to rank the evaluative criteria in terms of their importance & to establish a cutoff point for each criterion. All brands are first

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evaluated on the most important criterion & those which are not up to the mark are dropped from further consideration. If more than one brand passes this stage, the process is repeated for the second most important attribute. This repeated till only one brand remains in the end. In this model, it is critical to exceed the consumers expectation in one more attribute than the competition. Many advertising campaigns for products use this model for emphasizing on the high level of one attribute which other brands do not have. 2.9.4.6 Lexicographic Model: In this model the consumer first ranks the attributes in the order of importance & then selects the brand which performs the best in the most important attribute. If two are more brands are equal in this comparison, then they are again evaluated on the second most important attribute & so on till only one brand remains in the end. In this model the brand which surpasses others in the most important attribute will be chosen. This superiority should be emphasised in the advertising campaigns for such products.

2.9.5 Post purchase behavior As the consumers use the product, they evaluate the performance critically in the initial stages by comparing with their expectations. Such an evaluation may lead to following three outcomes: a. Performance matches expectations: This leads to a neutral feeling & satisfaction. There is a likelihood of this consumer buying this brand again in future from the same store. a. Performance exceeds expectations: This could lead to a strong brand & store loyalty in future purchases. b. Performance is below expectations: In this case especially if the involvement is intensive, the consumer may respond in different ways: i. Cognitive Dissonance: This may result in doubting the wisdom of the choice which creates what is called Cognitive Dissonance which is a disturbance in the mind. The consumer may then try to reduce such disturbance by trying to justify the soundness of the decision by seeking further positive information about their choice& avoid any negative inputs they may get at this stage. Thus they will reread the product

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brochures giving positive features & avoid competitors advertisements or any negative inputs by friends or acquaintances, Marketers can make use of this psychology by asking their sales people to get a feedback fro the consumers which may reveal some of the positive features neglected by them previously. ii. Exit: This is the extreme reaction when the consumer is totally convinced that the choice was indeed bad. He/she may then decide not to buy this brand again. They may go through the entire process of the purchase process from the very beginning when they need to buy the product again. iii. Complain: Dissatisfied customers may either complain or just keep quiet. The likelihood of the consumer voicing a complaint depends on three factors-a)Extent of dissatisfaction( whether the dissatisfaction is serious or not), b)Attribution to marketer( whether the consumer feels that this complaint can definitely be attributed to the marketer) or c) Consumers personality (degree of aggressiveness/submissiveness, selfconfidence, assertiveness, etc.) If this results in a complaint & if the complaint is successfully redressed by the marketer, the consumer may perceive that justice has been done. Such a result is possible when the consumer feels that he/she was treated with respect during the process of conflict resolution, the policy & procedure followed was fair, & the final decision was justified. If the consumer is satisfied that justice has been done, he is likely to continue with the same brand & store. If the consumer is dissatisfied with this the hostility increases. There could be adverse word of mouth publicity. It has been found by research that consumer complaints are good for the marketers. A relatively low percentage of consumers actually complain & if the complaint is redressed they are likely to become loyal customers. A majority of dissatisfied consumers may not complain; but simply turn

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to competitors brands. It has also been found by research that the negative publicity of dissatisfied customers is much more widely done than the positive publicity of satisfied customers. The satisfied customers are less likely to spread the word across about the good features of the product. However the dissatisfied customer is more likely to take the initiative to spread the word around about the negative aspects of his/her experience which could be more damaging. Hence complaint redressal system is a very important part of a successful marketing strategy.

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