MARK1012 Lecture Notes - Bmw K1600, Serah, Dollhouse
THE CONSUMER DECISION PROCESS
CONSUMER DECISION PROCESS MODEL The steps
consumers go through before, during and after making
purchases
1. NEED RECOGNITION
o Consumer recognises an unsatisfied need
o Needy state → Desired state
o Greater discrepancy between two states, greater need
recognition
o WANTS Goods or services that are not necessarily
needed but are desired
o FUNCTIONAL NEEDS Pertain to performance of a
product
o E.g. BMW k1600
o PSYCHOLOGICAL NEEDS Pertain to the personal
gratification consumers associate with a product
and/or service
o Shoes → functional need to keep feet clean and
protect from elements
▪ Willing to pay >$1000 for shoes is
seeking to satisfy psychological needs
o Key to successful market is determining the correct
balance of functional and psychological needs that
best appeals to firm’s target markets
2. SEARCH FOR INFORMATION
o INTERNAL SERACH Examines memory and
knowledge about the product gathered through past
experiences
o EXTERNAL SEARCH seeks info outside his or her
knowledge base
o Friends, family, salesperson, commercial media
o Factors affecting process
o Perceived benefits vs perceived costs of search
▪ Worth time and effort?
▪ E.g. time spent searching for house =\=
time spent looking for dollhouse
o Locus of control
o Actual or perceived risks
▪ Performance risk Perceived danger
inherent in product
▪ Financial risk monetary outlay and
includes initial cost of purchase and cost
of using item
• E.g. expensive dress + dry
cleaning cost
▪ Social risk fear that others will not
regard purchase positively
▪ Physiological/Safety risk fear of actual
harm should the product not perform
properly
• e.g. safety ratings of cars, health
risks
▪ Psychological risks fear people will feel
if the product does not convey the right
image
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3. EVALUATION OF ALTERNATIVES
o Occurs while the consumer is engaged in the
process of info search
o ATTRIBUTE SETS
o UNIVERSAL SETS All possibly choices for a
product category
o RETRIEVAL SETS brands or stores that can
be readily brought forth from memory
o EVOKED SET Altrnative brands or stores
that the consumer states he or she would
consider when making a purchase decision
▪ Increases likelihood of purchase and
therefore reduced search time
o EVALUATIVE CRITERIA Salient or important
attributes about a particular product
o DETERMINANT ATRRIBUTES Product features
that are important to the buyer and on which
competing brands or stores are perceived to differ
o CONSUMER DECISION RULES Set of criteria that
consumers use consciously or subconsciously to
select alternatives
o COMPENSATORY Assumes consumer
trades off one characteristic against another
▪ E.g. compensate for higher price
through overall rating
o MULTI-ATTRIBUTE MODEL allows the
trade-off between various factors be
incorporated into consumer’s purchase
decision
o NON-COMPENSATORY Choose a product
on basis of one subset of a characteristic,
regardless of value of other attributes
4. PURCHASE AND CONSUMPTION
o CONVERSION RATE Used to measure how well
they have converted purchase intentions into
purchases
o E.g. Number of real or virtual abandoned
shopping ‘carts’ in retailer’s store or website
o Retailers want to increase chances
customers convert positive evaluations into
purchases
▪ E.g. reduce number of abandoned
carts → make it easier to purchase
merch, have stock on hand, reduce
wait time with more checkouts or
placing items conveniently inside
store, install digital displays to
entertain waiting customers
o Conversion rate also refers to rentals
(Netflix) or outright purchase (haute couture)
o Lower for consumers using internet
▪ The Iconic offers 3-hr delivery, Virgin
tells us only 4 seats left, LivingSocial
has timed sales
▪ Reminder emails to visitors about
items they have abandoned
5. POSTPURCHASE
o Entails actual customers instead of potential ones
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