Republic of the Philippines

CAVITE STATE UNIVERSITY

IMUS CAMPUS
Imus, Cavite

Reporter: Saymon Jason Buhi Gigantoca

Professor: Dr. Alfe M. Solina

Narrative Report

Examining Consumer Markets

The Buying Decision Process

The consumer typically passes through five stages: problem recognition, information
search, evaluation of alternatives, purchase decision, and post purchase behavior. Clearly, the
buying process starts long before the actual purchase and has consequences long afterward.
Some consumers passively shop and may decide to make a purchase from unsolicited
information they encounter in the normal course of events.
Consumers don’t always pass through all five stages—they may skip or reverse some.
When you buy your regular brand of toothpaste, you go directly from the need to the purchase
decision, skipping information search and evaluation.

Stages of Buying Decision Process

Problem Recognition
The buying process starts when the buyer recognizes a problem or need triggered by
internal or external stimuli. With an internal stimulus, one of the person’s normal needs—
hunger, thirst, sex—rises to a threshold level and becomes a drive. A need can also be aroused
by an external stimulus. A person may admire a friend’s new car or see a television ad for a
Hawaiian vacation, which inspires thoughts about the possibility of making a purchase.
 Marketers need to identify the circumstances that trigger a particular need by gathering
information from a number of consumers. They can then develop marketing strategies that
spark consumer interest. Particularly for discretionary purchases such as luxury goods, vacation
packages, and entertainment options, marketers may need to increase consumer motivation so
a potential purchase gets serious consideration.
Information Search
Surprisingly, consumers often search for only limited information. Surveys have shown
that for durables, half of all consumers look at only one store, and only 30 percent look at more
than one brand of appliances. We can distinguish between two levels of engagement in the
search. The milder search state is called heightened attention. At this level a person simply
becomes more receptive to information about a product. At the next level, the person may
enter an active information search: looking for reading material, phoning friends, going online,
and visiting stores to learn about the product.
Information Sources
• Personal. Family, friends, neighbors, acquaintances
• Commercial. Advertising, Web sites, e-mails, salespersons, dealers, packaging, displays
• Public. Mass media, social media, consumer-rating organizations
• Experiential. Handling, examining, using the product

Search Dynamics By gathering information, the consumer learns about competing

brands and their features.

Successive Sets Involved in Consumer Decision Making

 Evaluation of Alternatives
How does the consumer process competitive brand information and make a final value
judgment? No single process is used by all consumers or by one consumer in all buying
situations. There are several processes, and the most current models see the consumer forming
judgments largely on a conscious and rational basis. Some basic concepts will help us
understand consumer evaluation processes. First, the consumer is trying to satisfy a need.
Second, the consumer is looking for certain benefits from the product solution. Third, the
consumer sees each product as a bundle of attributes with varying abilities to deliver the
benefits. The attributes of interest to buyers vary by product—for example:
1. Hotels—Location, cleanliness, atmosphere, price
2. Mouthwash—Color, effectiveness, germ-killing capacity, taste/flavor, price
3. Tires—Safety, tread life, ride quality, price
Consumers will pay the most attention to attributes that deliver the sought-after
benefits. We can often segment the market for a product according to attributes and benefits
important to different consumer groups.

Beliefs and Attitudes

A belief is a descriptive thought that a person holds about something.
Attitudes put us into a frame of mind: liking or disliking an object, moving toward or
away from it.
As a general rule, a company is well advised to fit its product into existing attitudes
rather than try to change attitudes. If beliefs and attitudes become too negative, however,
more active steps may be necessary.

The expectancy-value model of attitude formation posits that consumers evaluate

products and services by combining their brand beliefs—the positives and negatives—according
to importance.
Strategies that Laptop B can make
• Redesign the laptop. This technique is called real repositioning.
• Alter beliefs about the brand. Attempting to alter beliefs about the brand is called
psychological repositioning.
• Alter beliefs about competitors’ brands. This strategy, called competitive depositioning,
makes sense when buyers mistakenly believe a competitor’s brand is higher quality than it
actually is.
• Alter the importance weights. The marketer could try to persuade buyers to attach more
importance to the attributes in which the brand excels.
• Call attention to neglected attributes. The marketer could draw buyers’ attention to neglected
attributes, such as styling or processing speed.
• Shift the buyer’s ideals. The marketer could try to persuade buyers to change their ideal levels
for one or more attributes.

Purchase Decision
In the evaluation stage, the consumer forms preferences among the brands in the
choice set and may also form an intention to buy the most preferred brand. In executing a
purchase intention, the consumer may make as many as five subdecisions: brand (brand A),
dealer (dealer 2), quantity (one computer), timing (weekend), and payment method (credit
card).
 Noncompensatory Models of Consumer Choice The expectancy-value model is a
compensatory model, in that perceived good things about a product can help to overcome
perceived bad things. But consumers often take “mental shortcuts” called heuristics or rules of
thumb in the decision process. With noncompensatory models of consumer choice, positive
and negative attribute considerations don’t necessarily net out.
1. Using the conjunctive heuristic, the consumer sets a minimum acceptable cutoff level for
each attribute and chooses the first alternative that meets the minimum standard for all
attributes. For example, if Linda decided all attributes had to rate at least 5, she would choose
laptop B.
2. With the lexicographic heuristic, the consumer chooses the best brand on the basis of its
perceived most important attribute. With this decision rule, Linda would choose laptop C.
3. Using the elimination-by-aspects heuristic, the consumer compares brands on an attribute
selected probabilistically— where the probability of choosing an attribute is positively related
to its importance—and eliminates brands that do not meet minimum acceptable cutoffs.

Intervening Factors
Even if consumers form brand evaluations, two general factors can intervene between
the purchase intention and the purchase decision. The first factor is the attitudes of others. The
influence on us of another person’s attitude depends on two things: (1) the intensity of the
other person’s negative attitude toward our preferred alternative and (2) our motivation to
comply with the other person’s wishes. The more intense the other person’s negativism and the
closer he or she is to us, the more we will adjust our purchase intention
The second factor is unanticipated situational factors that may erupt to change the
purchase intention. Consumer might lose her job before they purchase a laptop, some other
purchase might become more urgent, or a store salesperson may turn her off.

Postpurchase Behavior
After the purchase, the consumer might experience dissonance from noticing certain
disquieting features or hearing favorable things about other brands and will be alert to
information that supports his or her decision. Marketing communications should supply beliefs
and evaluations that reinforce the consumer’s choice and help him or her feel good about the
brand. The marketer’s job therefore doesn’t end with the purchase. Marketers must monitor
postpurchase satisfaction, postpurchase actions, and postpurchase product uses and disposal.
 Postpurchase Satisfaction
Satisfaction is a function of the closeness between expectations and the product’s
perceived performance. If performance falls short of expectations, the consumer is
disappointed; if it meets expectations, the consumer is satisfied; if it exceeds expectations, the
consumer is delighted. These feelings make a difference in whether the customer buys the
product again and talks favorably or unfavorably about it to others. The larger the gap between
expectations and performance, the greater the dissatisfaction. Here the consumer’s coping
style comes into play. Some consumers magnify the gap when the product isn’t perfect and are
highly dissatisfied; others minimize it and are less dissatisfied.
Postpurchase Actions
A satisfied consumer is more likely to purchase the product again and will also tend to
say good things about the brand to others. Dissatisfied consumers may abandon or return the
product. They may seek information that confirms its high value. They may take public action by
complaining to the company, going to a lawyer, or complaining directly to other groups (such as
business, private, or government agencies) or to many others online. Private actions include
deciding to stop buying the product (exit option) or warning friends (voice option).
Postpurchase Uses and Disposal
Marketers should also monitor how buyers use and dispose of the product. A key driver
of sales frequency is product consumption rate—the more quickly buyers consume a product,
the sooner they may be back in the market to repurchase it. strategy is to provide consumers
with better information about either (1) the time they first used the product or need to replace
it or (2) its current level of performance. Batteries have built-in gauges that show how much
power they have left; razors have color in their lubricating strips to indicate when blades may
be worn; and so on. Perhaps the simplest way to increase usage is to learn when actual usage is
lower than recommended and persuade customers that more regular usage has benefits,
overcoming potential hurdles. If consumers throw the product away, the marketer needs to
know how they dispose of it, especially if—like batteries, beverage containers, electronic
equipment, and disposable diapers—it can damage the environment.

Theories
1. The Rational Decision-Making Model: This model suggests that consumers make
rational decisions by systematically evaluating available information and selecting the
option that maximizes their utility or satisfaction. For example, a consumer comparing
the features, prices, and reviews of different smartphones before selecting the one that
best meets their needs and offers the highest value for money.
 2. The Prospect Theory: This theory posits that consumer decisions are influenced by the
perceived gains and losses associated with different options. Consumers are more
sensitive to losses than gains, and they weigh the potential outcomes and probabilities
when making choices. An example is a consumer who is more likely to take risks to avoid
a perceived loss, such as buying an extended warranty to protect against potential
future repair costs.
3. The Theory of Planned Behavior: This theory suggests that consumer behavior is driven
by intention, which is influenced by attitudes, subjective norms, and perceived
behavioral control. For instance, a consumer intending to buy an electric vehicle due to
positive attitudes towards sustainability, the influence of friends and family who also
own electric vehicles (subjective norms), and the belief that charging infrastructure is
readily available (perceived behavioral control).
4. The Maslow's Hierarchy of Needs: Maslow's theory suggests that individuals have a
hierarchy of needs, starting from physiological needs (e.g., food, shelter) and
progressing to higher-level needs such as safety, love and belonging, esteem, and self-
actualization. Consumer decisions can be influenced by which level of needs is most
prominent. For example, a consumer purchasing a luxury car to fulfill their need for
status and self-esteem.
5. The Behavioral Economics: Behavioral economics incorporates psychological and social
factors into economic decision-making. It recognizes that consumers may not always
make rational choices but can be influenced by biases, emotions, social norms, and
context. An example is a consumer who buys a product impulsively due to the influence
of persuasive advertising or the fear of missing out on a limited-time offer.
These theories provide frameworks for understanding consumer decision-making
processes and the factors that influence choices. However, it's important to note that actual
consumer behavior can be complex and influenced by a combination of factors beyond these
theories.