Module No. 3: Consumer Decision-Making Process 10 Hours
Steps in the consumer decision process; the diffusion process- the adoption process; levels of consumer decision-making; models of consumer decision-making. Industrial buyer decision-making process and factors influencing Industrial buying.
1. Consumer Decision Process
Meaning
The consumer decision process refers to the series of steps through which a consumer passes before, during, and after purchasing a product or service.
A consumer generally does not simply see a product and purchase it immediately. The consumer first recognizes a need, searches for information, evaluates alternatives, makes a purchase decision, and finally evaluates whether the purchase was satisfactory.
Simple Model
Need Recognition → Information Search → Evaluation of Alternatives → Purchase Decision → Post-Purchase Behaviour
Step 1: Need Recognition
Need recognition is the first stage of the consumer decision-making process.
It occurs when a consumer realizes a difference between their current state and their desired state.
Example
A student has an old smartphone whose battery does not last through the day. The student wants a phone with better battery life.
The difference between the existing situation and the desired situation creates a need.
Sources of Need Recognition
Needs may arise from:
1. Internal stimuli
- * Hunger
- * Thirst
- * Fatigue
- * Desire for comfort
- * Desire for achievement
2. External stimuli
- * Advertising
- * Social media
- * Friends
- * Attractive product displays
- * Discounts and promotional offers
Example
A student may not initially plan to buy new shoes. After seeing an advertisement for sports shoes on Instagram, the student may realize that the existing shoes are old and decide to purchase a new pair.
Step 2: Information Search
Once consumers recognize a need, they may search for information about products or services that can satisfy that need.
The amount of information search depends on the importance, cost, risk, and complexity of the purchase.
Sources of Information
1. Personal sources
- * Family
- * Friends
- * Relatives
- * Colleagues
2. Commercial sources
- * Advertisements
- * Salespersons
- * Company websites
- * Product brochures
- * Retailers
3. Public sources
- * Newspapers
- * Consumer organizations
- * Online reviews
- * Rating websites
4. Experiential sources
- * Product demonstrations
- * Trial use
- * Previous experience
- * Product samples
Example
Before purchasing a laptop, a student may:
- * Search Google
- * Watch YouTube reviews
- * Ask friends
- * Compare prices on shopping websites
- * Visit an electronics store.
Step 3: Evaluation of Alternatives
After collecting information, consumers identify different brands or products and compare them.
The consumer evaluates alternatives based on criteria that are important to them.
Common Evaluation Criteria
- * Price
- * Quality
- * Brand reputation
- * Features
- * Design
- * Durability
- * Convenience
- * Warranty
- * After-sales service
- * Availability
Example
Suppose a student is considering three smartphones:
Criteria Brand A Brand B Brand C
Price Medium High Low
Camera Excellent Excellent Good
Battery Good Excellent Good
Brand image Good Excellent Average
The student compares these alternatives before selecting one.
Important Point
Different consumers may evaluate the same products differently because their needs, income, preferences and personalities differ.
Step 4: Purchase Decision
After evaluating alternatives, the consumer normally decides whether to purchase a product and which brand to purchase.
The purchase decision involves:
- * What product to buy?
- * Which brand?
- * Where to buy?
- * When to buy?
- * How much to buy?
- * Which payment method to use?
Example
After comparing smartphones, a student decides to purchase a Samsung smartphone from an online retailer during a festival sale.
Factors That Can Change the Purchase Decision
Even after deciding to buy a particular product, the consumer's final decision can be influenced by:
- * Price changes
- * Discounts
- * Availability
- * Opinions of others
- * Unexpected financial problems
- * Stock availability
- * Better competing offers
Step 5: Post-Purchase Behaviour
The consumer's decision process does not end with the purchase.
After using the product, the consumer evaluates whether the product has met expectations.
There are three possible outcomes:
1. Satisfaction
When performance meets or exceeds expectations.
Example: A consumer purchases a laptop and finds that it performs exactly as promised.
2. Dissatisfaction
When actual performance is below expectations.
Example: A consumer buys an expensive smartphone but finds that its battery performance is poor.
3. Cognitive Dissonance
Cognitive dissonance refers to doubt, anxiety or discomfort that consumers may experience after making a purchase, particularly when the purchase is expensive or when several attractive alternatives were available.
Example
A person buys a ₹70,000 laptop and later sees another model offering better features at a similar price. The consumer may begin wondering:
"Did I make the right choice?"
This is post-purchase cognitive dissonance.
Importance of Post-Purchase Behaviour
Satisfied consumers are more likely to:
- * Buy again
- * Recommend the brand
- * Give positive reviews
- * Develop brand loyalty
Dissatisfied consumers may:
- * Stop buying the brand
- * Complain
- * Return the product
- * Give negative reviews
- * Discourage others from purchasing it
Complete Consumer Decision Process
Need Recognition ↓ Information Search ↓ Evaluation of Alternatives ↓ Purchase Decision ↓ Post-Purchase Behaviour ↓ Satisfaction / Dissatisfaction / Cognitive Dissonance
2. Diffusion Process
Meaning
The diffusion process refers to the manner in which an innovation or new product spreads through a social system over time.
In simple words:
Diffusion explains how a new idea, product, technology or practice spreads from a few consumers to a larger number of consumers.
Examples
The diffusion of innovations can be observed in:
- * Smartphones
- * Online banking
- * Digital payments
- * Electric vehicles
- * Artificial intelligence tools
- * Online shopping
- * Food delivery applications
- * Wearable fitness devices
For example, when UPI was introduced, only a relatively small group initially used it. Over time, more consumers began using digital payments until they became widely accepted.
Elements of the Diffusion Process
The diffusion process generally involves four major elements:
1. Innovation
An innovation is an idea, product, service or practice perceived as new by consumers.
Examples:
- * Electric vehicle
- * AI-based application
- * New payment technology
- * New type of smartphone
2. Communication Channels
Information about the innovation spreads through communication channels.
Examples:
- * Television
- * Newspapers
- * Social media
- * Websites
- * Influencers
- * Friends
- * Family
- * Salespersons
3. Time
Diffusion takes place over a period of time.
Consumers do not all adopt an innovation simultaneously.
Some consumers adopt it immediately, while others take months or years.
4. Social System
A social system consists of the people, groups and institutions among whom the innovation spreads.
Examples:
- * Families
- * Students
- * Professional groups
- * Communities
- * Organisations
- * Society
Consumer Categories in the Diffusion Process
Consumers can be classified according to how quickly they adopt an innovation.
1. Innovators
Innovators are the first consumers to adopt a new product or idea.
Characteristics
- * Willing to take risks
- * Curious about new products
- * Technology-oriented
- * Willing to experiment
- * Less dependent on traditional practices
Example
A consumer who purchases a newly launched smartphone immediately, even before many reviews are available, may be an innovator.
2. Early Adopters
Early adopters adopt innovations relatively early but are generally more selective than innovators.
They often influence other consumers.
Characteristics
- * Respected by others
- * Opinion leaders
- * Open to change
- * More informed
- * Willing to try new products
Example
A popular student who starts using a new AI application and recommends it to classmates may act as an early adopter and opinion leader.
3. Early Majority
The early majority adopts a product before the average consumer, but usually after receiving sufficient information and observing the experiences of others.
Characteristics
- * Practical
- * Less risk-taking than early adopters
- * Need evidence of usefulness
- * Interested in reviews and recommendations
Example
A consumer may purchase an electric scooter after seeing friends successfully using it for several months.
4. Late Majority
The late majority adopts innovations after a large proportion of society has already adopted them.
Characteristics
- * Cautious
- * Risk-averse
- * Price-sensitive
- * Less enthusiastic about change
- * Influenced strongly by social pressure
Example
A consumer may continue using cash for years and begin using digital payments only when almost all local shops start accepting them.
5. Laggards
Laggards are the last group to adopt an innovation.
They tend to be strongly attached to traditional products and practices.
Characteristics
- * Resistant to change
- * Traditional
- * Highly cautious
- * Less interested in innovations
- * Prefer familiar products
Example
A person who continues using a traditional feature phone long after smartphones have become common may be considered a laggard.
Diffusion Categories – Summary
Category Adoption Time Main Characteristics
Innovators First Risk-taking, adventurous
Early Adopters Early Opinion leaders, influential
Early Majority Before average Practical, deliberate
Late Majority After average Cautious, sceptical
Laggards Last Traditional, resistant to change
A useful way to remember the sequence is:
Innovators → Early Adopters → Early Majority → Late Majority → Laggards
3. Adoption Process
Meaning
The adoption process refers to the mental and behavioural stages through which an individual consumer passes from first becoming aware of a new product or innovation to finally accepting and regularly using it.
Simple Definition
Adoption is the process by which an individual consumer decides to accept and use an innovation.
Stages of the Consumer Adoption Process
The traditional adoption process consists of five stages:
Awareness → Interest → Evaluation → Trial → Adoption
Stage 1: Awareness
At this stage, the consumer becomes aware that the innovation exists.
The consumer has basic information but may not know much about it.
Example
A student sees an advertisement for a newly launched AI-powered learning application.
The student now knows that the application exists.
Stage 2: Interest
The consumer becomes interested in the innovation and seeks more information.
The consumer wants to know:
- * What does it do?
- * How does it work?
- * What are its benefits?
- * How much does it cost?
- * Is it better than existing products?
Example
The student searches YouTube and Google for reviews of the AI learning application.
Stage 3: Evaluation
The consumer mentally evaluates whether the innovation is suitable for their needs.
The consumer considers:
- * Benefits
- * Cost
- * Risk
- * Compatibility
- * Ease of use
- * Performance
- * Alternatives
Example
The student thinks:
"Will this application really help me study better? Is it worth paying for?"
Stage 4: Trial
The consumer uses the product on a limited basis to determine whether it is satisfactory.
Trial reduces the perceived risk of adoption.
Example
The student uses the free version of the AI learning application for two weeks before deciding whether to purchase the premium version.
Stage 5: Adoption
If the consumer is satisfied with the trial, they decide to regularly use the innovation.
Example
The student subscribes to the application and begins using it regularly.
Thus:
Awareness → Interest → Evaluation → Trial → Adoption
Difference Between Diffusion and Adoption
This is an important examination question.
Basis Diffusion Adoption
Meaning Spread of an innovation through a social system Individual acceptance of an innovation
Focus Society/group/market Individual consumer
Nature Collective process Individual process
Concerned with How quickly an innovation spreads How an individual decides to accept it
Example Spread of UPI across India One consumer deciding to start using UPI
Simple way to remember
Adoption = Individual
Diffusion = Society/Market
Factors Affecting the Adoption of an Innovation
The speed at which consumers adopt an innovation depends on several characteristics.
1. Relative Advantage
The degree to which an innovation is perceived to be better than the existing product or method.
Example
An electric scooter that provides lower running costs than a petrol scooter has a relative advantage.
2. Compatibility
The degree to which the innovation fits the consumer's:
- * Lifestyle
- * Values
- * Needs
- * Existing habits
- * Previous experiences
Example
Online banking is highly compatible with consumers who regularly use smartphones and digital services.
3. Complexity
The degree to which an innovation is perceived as difficult to understand or use.
Example
An easy-to-use mobile payment application is likely to be adopted faster than a complicated one.
Lower complexity → Faster adoption
4. Trialability
The degree to which an innovation can be experimented with on a limited basis.
Example
Free trials of streaming platforms allow consumers to experience the service before subscribing.
Higher trialability → Greater willingness to adopt
5. Observability
The degree to which the results or benefits of an innovation can be seen or communicated to others.
Example
When people see their friends using smartwatches to track fitness, they can easily observe the benefits and may become interested in buying one.
Diffusion Process vs Adoption Process
For examination purposes, students should clearly understand the distinction.
Diffusion
"How does a new product spread among consumers?"
Adoption
"How does an individual consumer decide to accept a new product?"
For example, consider electric vehicles:
* When electric vehicles spread from a small number of users to a large percentage of the population, this is diffusion.
* When one particular consumer learns about an electric vehicle, evaluates it, tries it and finally purchases one, this is adoption.
Important Examination Questions
Short-answer questions
1. What is consumer decision-making?
2. Define need recognition.
3. What is information search?
4. What is post-purchase behaviour?
5. Define cognitive dissonance.
6. What is diffusion?
7. Who are innovators?
8. Who are laggards?
9. Define adoption.
10. What is trialability?
11. What is relative advantage?
12. What is compatibility?
Higher-mark questions
1. Explain the steps in the consumer decision-making process with suitable examples.
2. Explain the diffusion process and its major elements.
3. Discuss the five categories of consumers in the diffusion process.
4. Explain the stages of the consumer adoption process.
5. Distinguish between diffusion and adoption.
6. Explain the factors affecting the adoption of innovations.
7. Discuss the relationship between diffusion and adoption with suitable examples.
Quick Revision
Consumer Decision Process
Need Recognition ↓ Information Search ↓ Evaluation of Alternatives ↓ Purchase Decision ↓ Post-Purchase Behaviour
Diffusion Categories
Innovators → Early Adopters → Early Majority → Late Majority → Laggards
Adoption Process
Awareness → Interest → Evaluation → Trial → Adoption
Key Difference
Adoption = Individual acceptance
Diffusion = Spread among a social system/market
These three sequences are particularly important for students to memorise and reproduce correctly in examinations.
Levels of Consumer Decision-Making and Models of Consumer Decision-Making
1. Meaning of Consumer Decision-Making
Consumer decision-making refers to the process through which consumers identify a need, search for information, evaluate alternatives, choose a product or service, make a purchase, and evaluate the purchase after consumption.
In simple words, it is the process by which a consumer decides what to buy, when to buy, where to buy, how much to buy, and from whom to buy.
Consumer decisions differ considerably. Buying a packet of biscuits may require only a few seconds, whereas buying a car, house, laptop or insurance policy may involve extensive information search and careful evaluation.
PART I – LEVELS OF CONSUMER DECISION-MAKING
Consumer decision-making can be classified into three major levels:
1. Extensive Problem Solving (EPS)
2. Limited Problem Solving (LPS)
3. Routine Problem Solving / Habitual Decision-Making (RPS)
These levels differ according to the consumer's involvement, familiarity with the product, perceived risk, time spent, and amount of information searched.
1. Extensive Problem Solving (EPS)
Meaning
Extensive Problem Solving occurs when a consumer faces a new, important, expensive or risky purchase and has little previous experience with the product or brand.
The consumer spends considerable time collecting information and evaluating different alternatives before making the purchase.
Characteristics
- * High level of consumer involvement.
- * Consumer has little or no previous experience.
- * Extensive information search.
- * Many alternatives are considered.
- * Considerable time is spent on evaluation.
- * Perceived financial, social or psychological risk is high.
- * The consumer carefully compares brands, features, prices and quality.
- * Post-purchase evaluation is usually significant.
Examples
A student buying a laptop for the first time may compare:
- * Processor
- * RAM
- * Storage
- * Battery life
- * Brand
- * Price
- * Warranty
- * Reviews
- * After-sales service
Similarly, buying a car, house, health insurance policy or expensive electronic equipment may involve extensive problem solving.
Example
Suppose Rahul wants to purchase his first car. He has no previous experience with cars. He:
Recognises need → searches online → asks friends → visits dealers → compares brands → takes test drives → compares prices and features → makes the purchase.
This is extensive problem solving.
2. Limited Problem Solving (LPS)
Meaning: Limited Problem Solving occurs when consumers have some previous knowledge or experience, but still need to obtain additional information before making their decision.
The consumer does not undertake an exhaustive search but evaluates a limited number of alternatives.
Characteristics
- * Moderate involvement.
- * Consumer has some previous experience.
- * Limited information search.
- * Relatively few alternatives are considered.
- * Less time is spent compared with extensive problem solving.
- * Perceived risk is moderate.
- * Consumer may rely on previous experience, advertisements, reviews or recommendations.
Examples
A consumer who has previously purchased a smartphone may want to buy a new one. Since the consumer already knows about smartphones, operating systems and brands, the search will be relatively limited.
For example, the consumer may compare only:
- * Samsung
- * OnePlus
- * Apple
and choose one after checking price, camera and features.
Other examples
- * Buying a new pair of shoes.
- * Selecting a restaurant in a new city.
- * Buying a television after having purchased one earlier.
- * Choosing a new brand of shampoo.
- * Purchasing a mixer-grinder.
3. Routine Problem Solving (RPS) / Habitual Decision-Making
Meaning: Routine Problem Solving occurs when consumers regularly purchase familiar products and therefore do not need to undertake extensive information search or evaluation.
The purchase is largely based on habit, familiarity and previous satisfaction.
Characteristics
* Very low involvement.
* High familiarity with the product.
* Little or no information search.
* Very few alternatives are considered.
* Purchase decision is made quickly.
* Consumer relies heavily on habit and previous experience.
* Switching brands may require a reason or incentive.
Examples
A consumer who regularly purchases the same brand of toothpaste may simply pick it up from the supermarket without comparing other brands.
Other examples
- * Milk
- * Bread
- * Salt
- * Soap
- * Toothpaste
- * Newspapers
- * Regular household groceries
Example
If Priya always buys Amul milk, she may not compare Amul with other brands every time she purchases milk. Her previous experience and habit make the decision almost automatic.
Comparison of the Three Levels
Basis Extensive Problem Solving Limited Problem Solving Routine Problem Solving
Involvement High Moderate Low
Product familiarity Low Moderate High
Information search Extensive Limited Very little
Alternatives considered Many Few Very few
Time required High Moderate Very low
Perceived risk High Moderate Low
Decision effort High Moderate Low
Example Buying a car Buying a smartphone Buying toothpaste
Important Point
The same consumer can use different levels of decision-making for different products.
For example:
* Buying a car → Extensive problem solving
* Buying a shirt → Limited problem solving
* Buying toothpaste → Routine problem solving
Therefore, the level of decision-making depends not only on the consumer but also on the product, situation, involvement and perceived risk.
PART II – MODELS OF CONSUMER DECISION-MAKING
Meaning of a Consumer Decision-Making Model
A consumer decision-making model is a conceptual framework that explains how consumers process information, evaluate alternatives and arrive at purchase decisions.
Models help marketers understand:
- * Why consumers buy.
- * How consumers process information.
- * What factors influence purchase decisions.
- * How consumers evaluate alternatives.
- * What happens before and after purchase.
Some important models include:
1. Nicosia Model
2. Howard–Sheth Model
3. Engel–Kollat–Blackwell (EKB) Model
4. Input–Process–Output Model
5. Consumer Decision Process Model
1. Nicosia Model of Consumer Decision-Making
The Nicosia Model, developed by Francesco Nicosia, explains the relationship between the firm and the consumer and how marketing communication can influence consumer behaviour.
The model views consumer decision-making as a process involving interaction between the organisation and the consumer.
Major Fields of the Nicosia Model
The model consists of four major fields.
Field 1 – Exposure to Marketing Communication
The organisation communicates with consumers through:
- * Advertising
- * Sales promotion
- * Social media
- * Publicity
- * Product information
This communication creates an initial attitude or awareness in the consumer.
Example: A consumer sees an advertisement for a new smartphone.
Field 2 – Consumer Search and Evaluation
The consumer develops an attitude towards the product and begins to:
- * Search for information.
- * Evaluate alternatives.
- * Compare brands.
- * Assess product benefits.
Example: The consumer checks smartphone reviews, specifications and prices.
Field 3 – Purchase Decision
After evaluating alternatives, the consumer decides whether to purchase the product.
Example: The consumer chooses a particular smartphone and purchases it.
Field 4 – Feedback
After consumption, the consumer develops an experience or attitude based on satisfaction or dissatisfaction.
This experience can influence:
- * Future purchases.
- * Brand loyalty.
- * Word-of-mouth communication.
Simple Representation
Firm's Communication ↓ Consumer Attitude ↓ Information Search & Evaluation ↓ Purchase Decision ↓ Consumption & Experience ↓ Feedback
Importance
The Nicosia Model is useful because it highlights the interaction between marketing communication and consumer behaviour.
2. Howard–Sheth Model
The Howard–Sheth Model is one of the most comprehensive models of consumer buying behaviour.
It explains how consumers receive information, process it and ultimately make purchasing decisions.
The model is particularly useful for understanding complex consumer behaviour and brand choice.
Major Components
The model broadly consists of:
1. Input Variables
2. Constructs / Internal Processing
3. Output Variables
4. Exogenous Variables
A. Input Variables
Inputs are stimuli received by the consumer.
They include:
1. Significative Stimuli
These are actual characteristics of the product communicated to consumers.
Examples:
- * Price
- * Quality
- * Features
- * Colour
- * Packaging
2. Symbolic Stimuli
These are symbolic representations of the product, mainly through advertising and promotional communication.
Examples:
- * Advertisements
- * Brand images
- * Celebrity endorsements
- * Social media campaigns
3. Social Stimuli
These originate from the consumer's social environment.
Examples:
- * Family
- * Friends
- * Reference groups
- * Social class
B. Internal Processing
The consumer processes the information received.
Important psychological processes include:
- * Motivation
- * Perception
- * Learning
- * Attitude
- * Brand evaluation
The consumer develops preferences based on this internal processing.
C. Output Variables
The model explains several consumer responses:
Attention → Comprehension → Attitude → Intention → Purchase
For example:
Advertisement ↓ Consumer notices it ↓ Understands the product ↓ Develops favourable attitude ↓ Forms purchase intention ↓ Purchases product
D. Exogenous Variables
These are external factors that influence the decision-making process.
Examples include:
- * Personality
- * Social class
- * Culture
- * Financial status
- * Time pressure
Importance of the Howard–Sheth Model
It helps marketers understand how marketing stimuli, psychological factors and social influences interact to produce purchasing behaviour.
3. Engel–Kollat–Blackwell (EKB) Model
The Engel–Kollat–Blackwell Model explains consumer decision-making as a systematic process involving information processing, decision-making and outcomes.
It is especially useful for understanding the consumer decision process.
Major Components
The model can be understood through the following stages:
Input → Information Processing → Decision Process → Variables Influencing Decision → Outcomes
Stage 1 – Need Recognition
The consumer recognises a difference between the current state and desired state.
Example
A student's existing laptop becomes slow and unreliable.
The student realises:
"I need a new laptop."
Stage 2 – Information Search
The consumer searches for relevant information.
Sources include:
- * Personal experience
- * Friends and family
- * Websites
- * Social media
- * Advertisements
- * Online reviews
- * Salespeople
Stage 3 – Evaluation of Alternatives
The consumer compares different brands or products.
For a laptop, the consumer may compare:
Brand Price RAM Processor Battery
A ₹50,000 16 GB i5 High
B ₹55,000 16 GB Ryzen 7 High
C ₹48,000 8 GB i5 Moderate
Stage 4 – Purchase
The consumer selects the preferred alternative and purchases it.
Stage 5 – Outcomes
The consumer evaluates the product after purchase.
If satisfied:
- * Repeat purchase
- * Brand loyalty
- * Positive word-of-mouth
If dissatisfied:
- * Complaint
- * Brand switching
- * Negative word-of-mouth
4. Input–Process–Output Model
The Input–Process–Output model presents consumer decision-making in a simple and systematic manner.
Basic Structure
INPUT → PROCESS → OUTPUT
A. Input
The consumer receives different types of stimuli.
Marketing Inputs
- * Product
- * Price
- * Place
- * Promotion
Environmental Inputs
- * Family
- * Culture
- * Social class
- * Reference groups
- * Economic conditions
- * Technology
B. Process
The consumer internally processes these inputs.
The process includes:
Need Recognition → Information Search → Evaluation → Decision
Psychological factors such as:
- * Motivation
- * Perception
- * Learning
- * Personality
- * Attitudes
influence this process.
C. Output
The result of the decision-making process includes:
- * Purchase
- * Non-purchase
- * Product choice
- * Brand choice
- * Store choice
- * Post-purchase satisfaction or dissatisfaction
Example
Advertisement for a smartphone ↓ Consumer notices and understands it ↓ Searches for information ↓ Compares brands ↓ Develops preference ↓ Purchases smartphone ↓ Evaluates satisfaction
5. Consumer Decision Process Model
A widely used approach to understanding consumer decision-making identifies five major stages:
1. Need Recognition
↓
2. Information Search
↓
3. Evaluation of Alternatives
↓
4. Purchase Decision
↓
5. Post-Purchase Evaluation
This model is particularly useful for understanding how a consumer moves from recognising a need to evaluating the purchase.
Stage 1: Need Recognition
The decision process begins when the consumer recognises a need or problem.
The need can be triggered by:
- * Internal stimuli
- * External stimuli
Example
A person's old mobile phone stops working properly.
Need: A new mobile phone.
Stage 2: Information Search
The consumer searches for information about possible solutions.
Sources
- * Personal sources
- * Commercial sources
- * Public sources
- * Experiential sources
Stage 3: Evaluation of Alternatives
The consumer compares different alternatives according to criteria such as:
- * Price
- * Quality
- * Brand
- * Features
- * Design
- * Convenience
- * Warranty
- * After-sales service
Stage 4: Purchase Decision
The consumer selects the preferred alternative and makes the purchase.
However, the final decision may be influenced by:
- * Availability
- * Price changes
- * Opinions of others
- * Discounts
- * Store environment
- * Unexpected circumstances
Stage 5: Post-Purchase Evaluation
After purchasing and using the product, the consumer evaluates the decision.
Satisfaction
If performance meets or exceeds expectations:
Satisfaction → Repeat Purchase → Loyalty
Dissatisfaction
If performance falls below expectations:
Dissatisfaction → Complaints → Brand Switching
Comparison of Major Consumer Decision-Making Models
Model Main Focus Important Feature
Nicosia Model Firm–consumer relationship Marketing communication and feedback
Howard–Sheth Model Complex buying behaviour Inputs, internal processing and outputs
EKB Model Consumer decision process Information processing and decision stages
Input–Process–Output Model Stimulus and response Inputs are processed to produce outcomes
Consumer Decision Process Model Purchase journey Need recognition to post-purchase evaluation
Relationship Between Levels and Models
It is important to understand that levels of decision-making and models of decision-making are not the same thing.
Levels answer:
"How much effort does the consumer put into making a decision?"
For example:
- * Extensive
- * Limited
- * Routine/Habitual
Models answer:
"How does the consumer arrive at the decision?"
For example:
- * Nicosia Model
- * Howard–Sheth Model
- * EKB Model
- * Input–Process–Output Model
Example
A consumer buying a car may use:
Extensive Problem Solving
and the process can be explained using:
Howard–Sheth Model / EKB Model / Consumer Decision Process Model.
A consumer buying toothpaste may use:
Routine Problem Solving, where information search and evaluation are minimal.
Key Factors Determining the Level of Consumer Decision-Making
The level of decision-making is influenced by several factors:
1. Consumer Involvement
Higher involvement generally leads to greater decision-making effort.
2. Perceived Risk
Expensive or risky purchases require more information.
3. Product Knowledge
Greater knowledge generally reduces the need for information search.
4. Previous Experience
Satisfied previous experience may lead to habitual purchases.
5. Product Price
Higher-priced products usually involve greater evaluation.
6. Time Available
Consumers with more time may undertake greater information search.
7. Availability of Information
Online reviews, comparison websites and social media can influence the decision process.
8. Social Influence
Family, friends, colleagues and reference groups can influence decisions.
9. Nature of the Product
Buying a house is fundamentally different from buying a packet of biscuits.
Exam-Oriented Summary
Levels of Consumer Decision-Making
1. Extensive Problem Solving
- * High involvement
- * High risk
- * Little product knowledge
- * Extensive search
- * Example: car, house, insurance
2. Limited Problem Solving
- * Moderate involvement
- * Some product knowledge
- * Limited search
- * Example: smartphone, television, clothing
3. Routine Problem Solving
- * Low involvement
- * High familiarity
- * Little search
- * Habitual purchase
- * Example: toothpaste, milk, brea
Major Models
Nicosia Model
Firm communication → Consumer attitude → Search/evaluation → Purchase → Feedback
Howard–Sheth Model
Inputs → Internal processing → Outputs, influenced by external factors
EKB Model
Information input → Information processing → Decision process → Purchase → Outcomes
Input–Process–Output Model
Stimuli → Consumer processing → Response
Consumer Decision Process Model
Need recognition → Information search → Evaluation → Purchase → Post-purchase evaluation
Questions for Classroom Discussion
1. Why does a consumer spend more time buying a car than buying toothpaste?
2. Can the same product involve extensive decision-making for one consumer and routine decision-making for another? Give an example.
3. How does previous experience affect consumer decision-making?
4. What role does social media play in the consumer decision process?
5. Explain the Howard–Sheth Model with a suitable example.
6. Distinguish between Extensive, Limited and Routine Problem Solving.
7. Explain the five stages of the consumer decision process with an example.
8. Compare the Nicosia Model and Howard–Sheth Model.
9. Explain the Input–Process–Output model of consumer decision-making.
10. Why is post-purchase evaluation important to marketers?
