CHAPTER TWO

Consumer Decision Processes

2.1. Definition of Decision

Every day, each of us makes numerous decisions concerning every aspect of our daily lives.
However, we generally make these decisions without stopping to think about how we made
them and what is involved in the particular decision-making process itself. In the most
general terms, a decision is the selection of an option from two or more alternative choices.
In other words, for a person to make a decision, a choice of alternatives must be available.
On the other hand, if the consumer has no alternatives from which to choose and is literally
forced to make a particular purchase or take a particular action, then this single “no-choice”
instance does not constitute a decision; such a no choice decision.

Consumer decision produces an image of an individual carefully evaluating the attributes of

a set of products, brands, or services and rationally selecting the one that solves a clearly
recognized need for the least cost. It has a rational, functional connotation. While consumers
do make many decisions in this manner, many others involve little conscious effort. Further,
many consumer decisions focus not on brand attributes but rather on the feelings or
emotions associated with acquiring or using the brand or with the environment in which the
product is purchased or used.

2.2. Level of Consumer Decision Making

On a continuum of effort ranging from very high to very low, we can distinguish three
specific levels of consumer decision making: extensive problem solving, limited problem
solving, and routinized response behavior.

1. Extensive Problem Solving

When consumers have no established criteria for evaluating a product category or specific
brands in that category or have not narrowed the number of brands they will consider to a
small, manageable subset, their decision-making efforts can be classified as extensive
problem solving. At this level, the consumer needs a great deal of information to establish a
set of criteria on which to judge specific brands and a correspondingly large amount of
information concerning each of the brands to be considered.

2. Limited Problem Solving

At this level of problem solving, consumers already have established the basic criteria for
evaluating the product category and the various brands in the category. However, they have
not fully established preferences concerning brands. Their search for additional information
is more like “fine-tuning”; they must gather additional brand information to discriminate
among the various brands.

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 3. Routinized Response Behavior
At this level, consumers have experience with the product category and a well-established
set of criteria with which to evaluate the brands they are considering. In some situations,
they may search for a small amount of additional information; in others, they simply review
what they already know. Just how extensive a consumer’s problem-solving task is depends
on how well established his or her criteria for selection are, how much information he or she
has about each brand being considered, and how narrow the set of brands is from which the
choice will be made. Clearly, extensive problem solving implies that the consumer must
seek more information to make a choice, whereas routinized response behavior implies little
need for additional information.

2.3. CONSUMER DECISION-MAKING PROCESS

Consumer decision-making process generally involves five stages:

Problem Recognition

Information Search

Alternative Evaluation

Store Selection and Purchase

Post Purchase

1. Problem Recognition

Purchase decision-making process begins when a buyer becomes aware of an unsatisfied

need or a problem. Problem recognition is a critical stage in consumer decision-making
process because without it, there is no deliberate search for information. We commonly face
problems such as the need to replenish items of everyday consumption. For example, the
consumer who runs out of milk or cooking oil has a clear definition of the problem. Such
problems are quickly recognized, defined and resolved. As another example of a routine
problem, we can think of an individual who notices that the fuel meter of her/his auto is
indicating very low level of fuel and goes to the first petrol pump on her/his way and gets
the tank filled with petrol. Unplanned problem occurs when, for example, the refrigerator or
some other major appliance breaks down.

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Recognition of a problem such as the need for a notebook computer may take much longer
as it may evolve slowly over time. The process of problem recognition combines some
highly relevant consumer behavior concepts such as information processing and the
motivation process. First of all, consumers must become aware of the problem through
information processing arising as a result of internal or external stimuli. This leads to
motivating consumers; they are aroused and activated to engage in some goal directed
activity (purchase decision making).

This kind of action in response to recognizing problems and finding solutions to problems
depends on the magnitude of the discrepancy between the current state and the desired or
ideal state and secondly, the importance of the problem for the concerned consumer. The
discrepancy and/or importance should be of sufficient magnitude to start the purchase
process. Without perception of a problem by the consumer, there is no recognition of an
existing problem and hence there is actually no need to engage in the process of decision-
making. Since the consumer does not perceive any discrepancy between her/his current state
and the desired state, the current state for the concerned consumer is apparently quite
satisfactory and does not need decision-making. It is important to appreciate that it is
actually the consumer’s perception of the actual state that stimulates problem recognition
and not some “objective” reality. Also, the relative importance is a critical concept in
several purchase decisions because almost all consumers have budgetary or time constraints.

Routine problems are those where the difference between actual and desired states is
expected to be felt and would call for immediate solution. For instance, convenience goods
of everyday use are associated with this category of problem recognition. Both routine and
emergency problems stimulate purchases of goods and services with a minimum time lag
between purchase and actual consumption. Emergency problems are possible but are
unexpected and necessarily need immediate solutions. For example, say a consumer meets
an accident while on his/her way to office, gets injured and the vehicle is badly damaged. In
such an emergency, she/he needs a quick solution to reach a hospital’s emergency room.

2. Information Search
After problem or need recognition, consumers generally take steps to gather adequate
information to select the appropriate solution. Information search refers to what consumer
surveys in her/his environment for suitable information to make a satisfying purchase
decision. Problem recognition is an ongoing process for consumers and they use internal and
external searches to solve these problems. Consumers may also be involved in ongoing
search activities to acquire information for possible future use. No sooner does a consumer
recognizes a problem, than she/he in a reflexive manner first thinks or tries to remember
how she/he usually solves this kind of problem. The recall may be immediate or occur
slowly as a result of conscious effort. This recall from long-term memory might produce a
satisfactory solution in case of many problems, and no further information search is likely to
occur.

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In case of high involvement purchases, the relative importance of external information
search tends to increase. In general, it seems the type of information sought by a consumer
depends on what she/he already knows. If the consumer possesses little knowledge about
available alternatives, the tendency is to learn about the existence of alternatives and after
acquiring sufficient information, to redirect efforts towards learning more about the
attributes of available alternatives to develop suitable evaluative criteria and evaluate them.
Purchase decisions of this type involving perceived risk, extensive information search, and
serious evaluation efforts are called extended decision-making.
Sources of external information include:
 Relatives, friends, neighbors, and Chat groups.
 Professional information from handouts, pamphlets, articles, magazines, journals,
books, professional contacts, and the Internet.
 Direct experience through trial, inspection, and observation.
 Marketer initiated efforts included in advertisements, displays, and sales people.

Besides recalling and learning about the availability of different solutions, an important
objective of information collection is to determine appropriate evaluative criteria. These
criteria are the standards and specifications that the consumer uses in evaluating products
and brands. The consumer establishes what features or attributes are required to meet her/his
needs. For several types of products such as computer, car, cellphone and others, these
criteria may vary from consumer to consumer.

In most cases, consumers usually undertake brand processing or attribute processing. Brand
processing involves evaluating one brand at a time on several attributes, then a second, and
so on in the evoked set. Attribute processing involves examining a specific attribute and
comparing other brands on that attribute. In this manner, one by one, a second, a third, or
fourth attribute may be selected for comparison. The information collection yields an
awareness set of brands/products.
Awareness set includes, quite simply, the set of brands or alternatives of which a consumer
is aware. The consideration set of customers in order to learn about the total number of
brands, or alternatives, that are considered in consumer decision making. Awareness set
contains evoked set, inept set, and inert set. Evoked set is composed of those brands the
consumer will evaluate to choose the solution of a particular problem or need. Inept set
includes those brands that the consumer finds unworthy of consideration. Inert set is
composed of alternatives that the consumer is aware of but would not consider buying and
would treat with indifference.
3. Alternatives’ Evaluation
Consumers’ evaluative criteria refer to various dimensions, features, characteristics and
benefits that a consumer desires to solve a certain problem. For example, a consumer’s
evaluative criteria for a laptop computer may include processor speed, operating system,
memory, graphics, sound, display, software included, cost and warranty, etc. However, for
another consumer the set of evaluative criteria may be entirely different from the same
product.

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Any product feature or characteristic has meaning for a consumer only to the extent that it
can provide a desired benefit. Consumers who want to avoid dental cavities would use the
toothpaste that contains fluoride in its formulation. For this particular consumer, fluoride
content would probably be the most important evaluative criterion. Fluoride feature is
important because it provides a desired benefit, otherwise it has no value. What is more
important for marketers are to stress upon — and convince consumers about - the benefit
that a particular feature provides rather than mentioning the feature only?

To evaluate different alternatives in the evoked set, the consumer examines products or
brands against-the desired set of criteria, and also those that are not desired. Consumers use
either attitude-based choice that involves the use of general attitudes, impressions, beliefs,
intuition, or heuristics and form overall preferences about brands, or attribute-based choice
that requires the knowledge of specific attributes at the time of choosing a brand by
comparing each brand alternative on specific attributes. This attribute-based choice process
is cumbersome and time consuming.

Generally, the importance of an optimal decision is related to the value of the product under
consideration and the consequence associated with a non-optimal decision.
The purchase decision of certain products is primarily based on affective choice or what we
call feeling-based purchases. The evaluation is simply based on how the product makes the
consumer feel while he/she is using the product or service. Probably most of us can recall
certain purchases we made based on our overall feelings associated with product usage.

Consumers imagine or picture themselves using the product or service and evaluate the
associated feelings that this use will produce. Marketers’ messages must attempt to furnish
information and experiences by using suitable spokespersons to help develop a strong
attitude-based position. Marketers’ must also provide performance levels and supporting
information to help those consumers who tend to develop preference based on attribute
based choice.

4. Store Selection and Purchase Decision

Making a purchase is often a simple, routine matter of going to a retail outlet where the
consumer looks around and quickly picks out something needed. All consumers like to view
themselves as intelligent shoppers and make decisions regarding the retail outlet choice in
which they will shop.

Generally, consumers decide about the maker of the computer first then choose the dealer to
buy it from. Frequently, it happens that consumers choose the retail outlet first and this
influences their choice of the brand. For example, when consumers shop for clothes, they
generally decide about a retail outlet first, or go to a market area where several such stores
exist. Similarly, they often make a brand decision in the retail store when they shop for
appliances.

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Increasingly, consumers are exposed to product introductions and their descriptions in
direct-mail pieces and catalogues, in various print media vehicles, on television and on the
internet and buy them through mail, telephone, or computer orders. In case of some product
categories, Internet offers greater selection, convenience and lower prices than other
distribution outlets for at least some consumers. So far, this in-home shopping is not so
common in Ethiopia. A large number of companies with websites are encouraging
consumers to buy products through computer orders. Retail outlet image and location has an
obvious impact on store patronage and consumers’ outlet choice often depends on its
location. Consumers generally will choose the store that is closest. Similarly, the size of the
store is also an important factor that influences consumers’ outlet choice.

For minor shopping goods or convenience items, consumers are unwilling to travel very far.
However, for high-involvement purchases, consumers do not mind travelling to distant
shopping areas. Retail outlets are also perceived as having varying degrees of risk.
Consumers perceive less risk with traditional retail outlets compared to more innovative
outlets such as the internet. Once the consumer has chosen a brand and selected a retail
outlet, the actual purchase action is performed. Traditionally, this would involve offering the
cash to acquire the rights to the product. In developed and many developing countries, credit
often plays an important role in completing the purchase transaction. Credit cards are
popular in developed economies, as a convenient way of financing many purchases.

Many retail outlets overlook the fact that the purchase action is generally the termination of
last contact that the customer will have with the store on that shopping trip. This presents
the business an opportunity to create a lasting impression on the customer.

5. Post-Purchase Action
Consumers’ favorable post-purchase evaluation leads to satisfaction. Consumers choose a
particular brand or retail outlet because they perceive it as a better overall choice than other
alternatives that were evaluated while making the purchase decision. They expect a level of
performance from their selected item that can range from quite low to quite high.
Expectations and perceived performance are not independent and consumers tend to
perceive performance in line with their expectations. After using the product, service, or
retail outlet, the consumer will perceive some level of performance that could be noticeably
more than the expected level, noticeably below expectations, or match the expected level of
performance. Thus, satisfaction with a purchase is basically a function of the initial
performance level expectations, and perceived performance relative to those expectations.

Consumers engage in a constant process of evaluating the things that they buy as these
products are integrated into their daily consumption activities. In case of certain purchases,
consumers experience post-purchase dissonance. This occurs as a result of the consumer
doubting her/his wisdom of a purchase. After purchase, most products are put to use by
consumers, even when they experience dissonance. Consumers experience post purchase
dissonance because making a relatively longer commitment to a selected alternative requires
one to forgo the alternative not purchased. Thus, in case of nominal-decisions and most

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cases of limited-decisions, consumers are unlikely to experience post-purchase dissonance
because in such decisions consumers do not consider attractive attributes in a brand not
selected.

As one may expect, a positive post-purchase evaluation results in satisfaction and the
negative evaluation causes dissatisfaction. In case the consumer’s perceived performance
level is below expectations and fails to meet the expectations, this will definitely cause
dissatisfaction and the product or the outlet will be most likely pushed in the inept set and
dropped from being considered on future occasions. Thus, the consumer is also likely to
initiate complaint behavior and spread negative word-of-mouth.

The consumer generally experiences satisfaction when the performance level meets or
exceeds the minimum performance expectations. Similarly, when the performance level far
exceeds the desired performance level, the consumer will not only be satisfied but also will
most likely be delighted. Such an outcome tends to reduce the consumer’s decision-making
efforts on future purchase occasions of the same product or service to accomplish need
satisfaction. Thus, rewarding purchase experience encourages consumers to repeat the same
behavior in future. A delighted consumer is likely to be committed and enthusiastic about a
particular brand and usually unlikely to be influenced by competitors’ actions. A delighted
consumer is also inclined to spread favorable word-of-mouth.

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