Unit 4 - QBA

Course Name: Consumer Behavior

Module 4 - CONSUMER DECISION MAKING PROCESSES

  Problem recognition, search and evaluation,
  Purchasing processes,
  Post purchase behavior,
  Models of consumer decision making,
  Consumers and the diffusion of innovations.

Q 1. Define Decision making?

Ans :- A decision is defined as choosing an option of the few/many available. Decision making
is the process of choosing between two or more alternatives; It is the selection of an alternative
out of the few/many choices that are available.

Decision making is:

a) a goal oriented process.

b) it is a problem solving process: helps take advantage of opportunities and fight threats.

Q 2. Write down the types of decision making?

Ans :- Decisions Making can be of two types,

a) Programmed decision making, and,

b) Non-programmed decision making.

a) Programmed decision making: This is applied for problems that are routine and regular.
Such problems are simple to deal with and guidelines to sort out such problems exist. Such
decisions are made without much thought. With respect to marketing, these are decisions
related to day to day purchases or convenience and shopping goods; these are generally low
involvement purchases. They may also be habitual in nature, and brand loyalty could easily
develop. Examples: Purchases made for staples, toiletries etc.

b) Non-programmed decision making: This is applied for problems that arise suddenly and are
unique or novel. As the problem is sudden and novel, it is complex and requires a lot of
information gathering, deliberation and thought. With respect to marketing, these are decisions
related to infrequent purchases or specialty goods and emergency goods; these are high
involvement purchases. Examples: Purchases made for laptops, real estate etc.

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Q3. Explain consumer purchase?

Ans :- A consumer purchase is actually a response to a problem. Consumer Decision Making

pertains to making decisions regarding product and service offerings. It may be defined as a
process of gathering and processing information, evaluating it and selecting the best possible
option so as to solve a problem or make a buying choice.

Consumer Decision Making pertains to the following decisions:

a) What to buy: Products and Services (and the Brands?)

b) How much to buy: Quantity

c) Where to buy: Place

d) When to buy: Time

e) How to buy: Payment terms.

All purchase decisions are not similar. The effort put into each decision making is different.

Q4. Explain level of decision making?

Ans :While decision making is defined as the selection of an alternative to solve a problem, the
time and effort required to complete the process varies across buying situations. We may
define three kinds problem solving spread over a continuum; these are referred to as the levels
of consumer decision making; (i) Extensive problem solving (EPS) (ii) Limited problem solving
(LPS) (iii) Routinized problem solving (RPS) or routinized response behavior. These are
explained as follows:

a) Extensive problem solving (EPS): In EPS, the consumer is unfamiliar with the
product/service category; he is not informed of the product or service offering, and thus, the
situation requires extensive information search and evaluation.

The consumer is not aware:

- about the various decision criteria used to evaluate the product or service offering.

- of the various brands that are available and from which to evaluate.

The result is that the purchase process involves significant effort on part of the consumer. He
has to gather knowledge about (i) the decision criteria;

(ii) the brands available; and (iii) make a choice amongst the brands.

The types of products and / situations where we generally have EPS:

These goods are ones of high involvement; they are expensive; they are infrequently bought;
there is considerable amount of risk involved.

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These are generally first time purchases

Examples: Jewellery, electronic goods, Real estate and property etc.

b) Limited problem solving (LPS): The consumer is familiar of the product or service offering;
but he is unaware of the various brands. The case is one where the buyer is familiar wit the
product category but unfamiliar with the brands.

The consumer:

- is aware of some brands and also of the various criteria used to evaluate the product or
service offering.

- is unaware of the new brands that have been introduced.- has not evaluated the brands
amongst the awareness set and has not established preferences amongst the group of brands.

The result is that the purchase process is more of a recurring purchase and it involves only a
moderate effort on part of the consumer. He has to gather knowledge to add/modify the
existing knowledge that he has in his memory. Thereafter he has to make a decision.

Q 5. Explain concept of buying roles?

Ans :- onsumer decision making is a complex process. It is an interplay of reactions amongst a

consumer and his cognition, affect and behavior on the one hand, as well as the environmental
forces on the other hand.

The actual transaction/ exchange is preceded by considerable amount of thought processes

and influences. This could be explained in terms of the five “Buying Roles” viz., Initiator,
Influencer, Decider, Buyer and, User. The marketer needs to understand these roles so as to
be able to frame suitable strategies to target them.

a) Initiator: The person who identifies a need and first suggests the idea of buying a
particular product or service.

b) Influencer: The person(s) who influences the buyer in making his final choice of the
product.

c) Decider: The person who decides on the final choice: what is to be bought, when,
from where and how.

d) Buyer: The person who enters into the final transaction and exchange process or is
involved in the physical activity of making a purchase.

e) User: The person(s) who actually consumes the product or service offering.

Q 7. Write down the stages in consumer decision making process?

Ans :- There are five stages in the consumer decision making process. These are
1. Need recognition/Problem recognition
2. Pre-purchase information search

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 3. Evaluation of alternatives
4. Purchase decision
5. Post-purchase outcome and reactions

Q 8. Explain the stage Need recognition/Problem recognition in consumer behaviour:

Ans :- This is a stage of perceiving a deficiency/need. A need could be triggered off by
an internal stimulus or an external stimulus. For example, a person is thirsty and feels like
having a cola drink. The stimulus is internal. On the other hand, while walking across the
street, he sees a hoarding which shows a person having a frosted, chilled cola, and he too
desires to have the same, the need is said to have been stimulated by an external stimuli.

Q9. Explain stage Pre-purchase information search in decision making?

Ans :- After a need is recognized, the consumer goes for an information search, so as to be
able to make the right purchase decision. He gathers information about the:

(i) product category and the variations

(ii) various alternatives

(iii) various brands.

The amount of information a consumer will gather depends on the following:

i) the consumer: demographics (age, gender, education), psychographics (learning, attitudes,

involvement, personality type)

ii) product category: differentiation and alternative brands available,

risk, price, social visibility and acceptance of the product.

iii) Situation: time available at hand, first time purchase, quantity of information required,
availability of information.

Q.10 Explain Evaluation of alternatives in decision making

Ans : Once the consumer has gathered information and identified the alternatives, he
compares the different alternatives available on certain criteria. This involves: i) Generation of
choice alternatives; ii) Identification of evaluative criteria: Attributes and Benefits; iii) Application
of Decision Rules.

i) Generation of choice alternatives: While generation of alternatives, a consumer moves

from an evoked set towards the choice set.

-Evoked set/Consideration set: This is the set of alternatives that he actively considers while
making a purchase decision; these exist either in his memory or feature prominently in the

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environment. The consumer perceives them to be acceptable.

-Inept set: These are those alternatives from the evoked set that the consumer excludes from
further consideration, as he perceives them to be inferior and unacceptable.

-Inert set: These are those alternatives from the evoked set that the consumer excludes from
further consideration, as he is indifferent towards them and perceives them as ones without
much advantages or benefits.

-Choice set: This comprises the final set of one or two brands from which he finally decides.

Q 11 What is the meaning of post purchase dissonance?

Ans :- Buyer's remorse. From Wikipedia, the free encyclopedia. ... Buyer's remorse is
thought to stem from cognitive dissonance, specifically post-decision dissonance that arises
when a person must make a difficult decision, such as a heavily invested purchase between
two similarly appealing alternatives.

Post-Purchase Behavior: All the activities and experiences that follow purchase are included
in the post purchase behavior. Usually, after making a purchase, consumers experience
post-purchase dissonance. They sometimes regret their decisions made. It mainly occurs
due to a large number of alternatives available, good performance of alternatives or
attractiveness of alternatives, etc.

The marketers sometimes need to assure the consumer that the choice made by
them is the right one. The seller can mention or even highlight the important features or
attributes and benefits of the product to address and solve their concerns ifany.

A high level of post-purchase dissonance is negatively related to the level of

satisfaction which the consumer draws out of product usage. To reduce post-purchase
dissonance, consumers may sometimes even return or exchange the product.

Q 12. What is diffusion of an innovation?

Ans :- Diffusion of innovations is a theory that seeks to explain how, why, and at what rate
new ideas and technology spread. ... Rogers proposes that four main elements influence the
spread of a new idea: the innovation itself, communication channels, time, and a social
system.

Q 13 What is diffusion in consumer behaviour?

Ans :- Diffusion is the process by which a new idea or new product is accepted by the market.
The rate of diffusion is the speed with which the new idea spreads from one consumer to the
next. The definition of the term innovation canbe:
1. Firm oriented(new to the firm),
2. Product oriented(a continuous innovation, a dynamically continuous innovation, or A
discontinuous innovation),
3. Market oriented(how long the product has been on the market or an arbitrary percentage
of the potential target market that has purchased it),or
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4. Consumer oriented (new to the customer).
Market-oriented definitions of innovation are most useful to consumer researchers in the
study of the diffusion and adoption of new products.