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PROCESS
MEANING OF DECISION MAKING:
• The process by which a person is required to make a choice from
various alternative options is referred to as decision making.
• While the customer gains from having to decide and select from a
wide array of choices, the marketer will benefit from a substantial
increase in sales when the consumer decides to purchase their
brands.
PROBLEM RECOGNITION STAGE:
This is the first stage in consumer’s decision making process. During
this stage the consumer recognises the problem and feels that he has
to do something to reduce or solve the problem.
Actual state of the problem may occur when the consumer feels the
product or service is not giving the satisfactory performance.
Which product category or particular brand will best satisfy his or her
need?
A probable list of brands from which they plan to make the selection.
This set could include the small number of brands the consumer is
familiar with and finds acceptable too.
Ex: The evolved set for a DVD player by a consumer could include
Sony, Philips, LG, Videocon etc.
The marketers at this stage need to work on designing promotional
techniques which will communicate a favourable and relevant product
image to the target consumer.
The marketer should try to help the consumer in his decision making
process by providing all the necessary information through various
reliable sources and thus reduce the consumer’s perception of risk
POST PURCHASE BEHAVIOUR:
There is a general tendency among consumers to compare their
experience with their expectations when being involved in a post
purchase evaluation process.
In the last outcome the dissatisfied consumer will try to reduce the
dissatisfaction by:
MODELS OF CONSUMER
BEHAVIOUR
CONTEMPORARY
TRADITIONAL MODELS
MODELS
HORWARD SCHIFFMAN
ENGEL AND KANUK’S
LEARNING PSYCHOANALYTIC SHETH MODEL BLACKWELL
ECONOMIC OF BUYING MODEL OF
MODEL MODEL MODEL AND MINIARD
BEHAVIOUR CONSUMER
(EBM) MODEL DECISION
MAKING
HOWARD SHETH MODEL
Definition: The Howard Sheth Model is an approach for analysing the
combined impact of the social, psychological and marketing factors on
the buying behaviour or preference of the consumers and the industrial
buyers into a logical order of information processing.
John Howard and Jagadish Sheth introduced the Howard Sheth Model in
the year 1969. The concept was published in their book ‘The Theory of
Buyer Behaviour’.
Presents a comprehensive picture of consumer decision making. This
model represents the rational brand choice behaviour by buyers
when faced with situations involving incomplete information and
limited abilities.
Input Variables.
Output Variables.
Hypothetic Constructs.
Exogenous Variables.
INPUT VARIABLES:
The stimulus inputs refer to the idea or information clue about the brand and
its product in terms of product quality, distinctiveness, price, service offered
and availability. These can be further classified as follows:
Significant Stimuli: The significant stimuli are the physical traits of the
product and the brand. It includes the product’s price, quality, availability,
distinctive characteristics and service.
Purchase
Behaviour
Intention All of the
elements result
Attitude The brand in actual
which the purchase of a
Buyer’s buyer intends product by the
Comprehension evaluation of to buy. buyer.
the particular
Attention Store of brand potential
information the to satisfy his or
Based on the buyer has about
information the her motives.
the brand.
buyer has
about the
brand.
EXOGENOUS VARIABLES:
There are certain other external factors which influence the buying behaviour of an
individual or a firm by hampering the product purchase of a preferred brand.
These influence all or some of the constructs explained above and through them, the
output.
Some exogenous variables are importance of the purchase, time at the disposal of the
buyer, personality traits, financial status etc.
HYPOTHETICAL CONSTRUCTS:
BUYERS LEARNING CPONSTRUCTS:
• Some of the variables are not well defined and are difficult to measure
too.
Both have similar scope and have the same level of complexity.
• This model, like in other models, has gone through many revisions to
improve its descriptive ability of the basic relationships between
components and sub-components.
• If the consumer still does not arrive to a specific decision, the search
for external information will be activated in order to arrive to a choice
or in some cases if the consumer experience dissonance because the
selected alternative is less satisfactory than expected.
INFORMATION PROCESSING STAGE:
• This stage consists of the consumer’s exposure, attention, perception,
acceptance, and retention of incoming information.
• Three stages :
Input Stage.
Process Stage.
Output Stage.
INPUT STAGE:
• The input stage in the consumer decision making model consists of
external environmental influences, or two major sources of information.
• These sources are the firm’s marketing mix elements( including the
product or service, its price, its promotion and location of availability) as
well as the external sociological influences on the consumer (family,
peer and friends, neighbours, other informal and non-commercial
sources, social class, group influence, religion and cultural etc.)
PROCESS STAGE:
• The process stage of the model focuses on how consumers make
decisions.
• External factors can influence buying and include the marketing mix
offered by a business as well as dynamic uncontrollable factors such as
social, cultural and economic change.
OUTPUT STAGE:
• The Output Stage of the consumer decision making model consists of
two closely linked post decision activities namely purchase behaviour
and post purchase evaluation.
• Post purchase decision activities is also dependent upon the type of
decision involved.
• Ex: The purchase behaviour for a low cost non-durable product say a
new toothpaste may be influenced by the free coupon offer or may in
fact be a trial purchase.
• In case the consumer is satisfied with the product after use he or she
may repeat the purchase. A repeat purchase will indicate product
adoption by the consumer.
ADOPTER CATEGORIES:
Early adopters Early majority
Innovators
Early adopters are prestige They are the leading
Innovators are risk takers oriented opinion leaders. segment of the market,
and they seek changes. about one third of the
They have higher social
They are the first one to status, financial liquidity, target market.
buy a new product. education. Early Majority have above
They try the product in its They use the product average social status and
initial introduction phase. during its late introduction are not opinion leaders.
phase of its life cycle. They come into picture
during the growth phase of
the product.
Laggards
Late majority
Conservative, price
Followers of the early majority,
typically sceptical about an
conscious segment,
innovation, have below average aversion to change-agents.
social status and little financial They are oldest and most
liquidity. traditional.
They are about 36 percent of
the target market. They show their willingness
to use the product in its
They try the product in its late late maturity phase and
growth and maturity phase.
diminishing phase.
CHARACTERISTICS OF OPINION
LEADERS:
• Opinion leaders are perceived to be highly credible sources of product
related information.
• They have got greater exposure to the Media, especially in there area of
leadership.