How do consumers make decisions and decide what to buy?

Consumer Behaviour provides
the answer…
Consumer behaviour is the study of the
processes involved when individuals or
groups select, purchase, use, or dispose
of products, services, ideas, or
experiences to satisfy needs and desires.
Lesson 1:
Consumers are
problem solvers
• Purchases are responses to
problems consumers face.
• After realising that they
want to make a purchase,
they go through a series of
steps in order to make it.
• It can seem automatic or
• It’s normally complicated
by consumer hyperchoice.
Lesson 2: Consumers think differently
Rationally: integrating as much information as possible
with what they already know about a product, weighing
pluses and minuses of each alternative and arriving at a
satisfactory decision.
Externally: buying products based on environmental
cues, such as a sale or promotion.
Experientially: buying products based on totality of their
Momentarily: buying beyond satisfaction of their needs.
Lesson 3: Consumers act differently
a) Routinely: making decisions with little to no conscious effort.
b) Partially: not as motivated to search for information or to
evaluate rigorously. They use simple decision rules to choose.
c) Extensively: feel that eventual decision carries a degree of risk.
Lesson 4:
want more stuff
• Consumers recognise the
difference between current
state and ideal state.
• When the ideal state moves
upward, they recognise an
• When the actual state
moves downward, they
recognise a need.
Lesson 5: Consumers search for more info
Pre-purchase: involved with the purchase to make better
Ongoing: involved with the product to build a bank of info for
the future.
Internal: scanning memory to gather product alternative
External: obtaining information from ads, retailers, catalogs,
friends, family and web sites.
Deliberate: existing product knowledge obtained from previous
information search or experience of alternatives.
Accidental: exposure over time to observations of others.
Lesson 6: Consumers are
Some consumers avoid external search, especially with
minimal time to do so.
Others spend more time doing external search, especially
for symbolic items.
Some consumers select familiar brands when decision
situation is ambiguous (i.e. Brand Switching).
Others have a desire to choose new alternatives over
more familiar ones (i.e. Variety Seeking).
Lesson 7: Consumers are
biased…(most of the times)
Consumers frame problems in terms of
gains/losses and this influences their decisions
(i.e. Mental Accounting).
Consumers are reluctant to waste something
they have paid for (i.e. Sunk-cost Fallacy).
Consumers assessment of risk differs when they
face options involving gains versus those
involving losses (i.e. Prospect Theory).
Lesson 8: Consumers try to avoid risk
Examples of perceived risk
Social risk and Physical risk
Lesson 9: Consumers can NOT
remember every single brand
• Consumer usually don’t seriously consider every brand
they know about.
• They often include only a surprisingly small number of
alternatives in their choice set (evoked set).
• Marketers must focus on getting their brands in
consumers’ choice set.
• Consumers often do not give rejected brands a second
Lesson 10: Consumers use known knowns
to know about the unknown knowns!
Consumer evaluate products in terms of what they already
know about a (similar) product.
Choice-set products usually share similar features
When faced with a new product, consumers refer to
existing product category knowledge to form new
Marketers want to ensure that their products are correctly
grouped in the right category in the knowledge structure.

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