CONSUMER DECISION MAKING
The EBM (Engel, Blackwell & Miniard) model, identified a number of different decision-making or problem-solving processes that consumers could follow when purchasing a product or service. They are extended problem-solving, limited problem-solving and midrange problem-solving. In addition to the three decision-making processes listed in the EBM model, Engel et al. (1995: 155) provide an additional decision-making process, applicable to repeat purchases, namely habitual decision-making. The Assael model identified four different decision-making processes, namely complex decision-making, brand loyalty, limited decision-making and inertia.
The different types of decision-making processes can be explained as a continuum ranging from high to low involvement. The decision-making continuum suggests that decision-making becomes more complex as consumers move from a very low level of involvement with a purchase situation to a high level of involvement.
Engel et al. (1995: 158) identify two special decision-making processes that do not fit neatly into the decision continuum, namely impulse buying and variety seeking.
There are three different decision-making processes with initial purchases, namely extended, midrange and limited decision-making. With initial purchases, consumers often establish enduring buying patterns through extended decision-making. Limited decision-making leads to inertia-based habits where it is easier to purchase the same product than to change to a different brand. The differences between the processes will become clearer from the discussion below, focusing on extended, midrange and limited decision-making.
Extended decision-making refers to a very high level of purchase involvement. A characteristic of extended decision-making is an extensive internal and external search for information, followed by a complex evaluation process where multiple alternatives are evaluated. The purchase of a product is likely to be followed by post-purchase doubts and the consumer will, therefore, engage in a thorough evaluation of the purchased product. It occurs when consumers have no established criteria for evaluating either the product category or specific product brands within the product category. Consumers, therefore, need a great deal of information regarding different products and information that will assist them in establishing a set of criteria for evaluation purposes. Extended decision-making occurs when the decision-making process followed by the consumer is especially detailed and rigorous. Consumers use an extended decision-making process when purchasing motor vehicles, expensive items and products and services for which the cost and perceived risk is high for making an incorrect purchase decision. It is characterized by high risk and involvement by the consumer, resulting in extensive search for information from multiple sources prior to store visits.
Midrange decision-making falls somewhere between extended and limited decision-making. Limited information is therefore required and can be easily found. Since a number of alternatives are available, the consumer has to evaluate and choose one option. The process usually requires limited time and deliberation and an alternative can be chosen relatively easily. An example of midrange decision-making is deciding which movie to see, with a number of alternatives available. The information is easily obtainable in newspapers and the evaluation of the options is usually done quickly, often influenced by the opinion of a friend or an article by a critic.
Limited decision-making is the final decision-making process on the continuum applicable to initial purchases. This process of decision-making is characterized by little information search and evaluation before purchase and the consumer not having the time, resources or motivation to engage in extended decision-making. The consumer will, therefore, simplify the process by reducing the number and variety of information sources and alternatives as well as the evaluation criteria. Consumers already have established criteria for evaluating both the product category and individual brands within the category. They will often apply a decision rule when engaging in limited decision-making, for example to purchase a brand that is recognized or alternatively to simply purchase the cheapest option available. The consumer may also decide to purchase a new brand (a ”why not try it” response), resulting in brand switching.
For limited decision-making, need recognition leads to buying action; extensive search and evaluation are avoided because the purchase does not assume great importance. A competitive product, regardless how small the difference, can therefore gain temporary advantage when the consumer identifies the product at the point of purchase and decides to change brands as a result of a ”why not try it” response.
Repeated purchases imply purchase decisions made over a period of time and comprise repeated and habitual decision-making. It occurs when the consumer continuously needs to make a decision regarding repeated purchases, often as a result of dissatisfaction with a previously purchased alternative.
Repeated decision-making occurs when, for example, the retail outlet usually supported by the consumer is out of stock, or when the situation changes in some other way. The consumer now has to weigh the consequences of investing effort and time in finding another acceptable alternative.
Habitual decision-making takes many forms depending on the initial decision-making process followed by the consumer. Habitual decision-making comprises brand or company loyalty and inertia. Habitual decision-making is a process more likely to be followed by consumers for repeat purchases than repeated decision-making, since consumers will engage in repeat purchases on a basis of habits or routines that are formed in an effort to cope more effectively with the pressures of life.
On brand or company loyalty, if a consumer has been purchasing the same product or service over a period of time due to satisfaction with the purchase and service received, the consumer will reward the organization selling the product or rendering the service by means of continued support over a period of time. Brand loyalty refers to the preference for a particular brand that results in its repeated purchase. An example of brand or company loyalty is where a motor vehicle owner is satisfied with the maintenance service received from a dealer and will, therefore, reward the dealer through continued support. Brand loyalty, the objective of any marketer, can be extremely difficult to change. Competitors to brands that consumers purchase out of habit, based on brand loyalty will battle to convince these consumers to change brands to that of the competitor.
In the case of limited brand loyalty for a product category. If any brand loyalty does exist, it usually is for a number of different brands that are all considered about equal, for example potato crisps, where a salt and vinegar flavour is preferred regardless of the brand.
Purchasing habits are therefore based on inertia and are considered unstable. With this decision-making process there is no incentive to switch brands although it may occur readily when prices are lowered or another brand is offering something new.
Special Categories of Buying Behaviour
There are two special categories of buying behaviour namely impulse buying and variety seeking.
Impulse buying refers to a spur-of-the-moment purchase triggered by product display or point-of-sale promotion. Simply, the urge to buy something immediately.
The main characteristics of impulsive buying are:
- Sudden and spontaneous desire to act accompanied by urgency.
- A state of psychological disequilibria in which a person can feel temporarily out of control.
- The onset of conflict and struggle that is resolved by an immediate action.
- Minimal objective evaluation – where emotional considerations are dominant.
- A lack of regard for consequences.
Impulsive purchases are prone to occur with diminished regard for the consequences of such purchases.
Variety seeking implies that although the consumer expresses satisfaction with a current brand selection, brand switching may occur due to a motive of variety seeking. Variety seeking occurs especially for products in product categories with many similar alternatives and high purchase frequencies where the consumer may express a feeling of “tired of the same old thing”.
Factors Influencing the Extent of Decision Making
The extent of decision-making is determined by three factors, namely the degree to which the consumer is involved in the purchase, the differentiation of alternatives and time available for deliberation.
The degree of personal involvement is considered the most important factor influencing the type of decision-making process. The consumer will act with deliberation to maximize the benefits and minimize the risk of a purchase and the use thereof, depending on the extent of involvement. Involvement is furthermore a function of the person, object and situation. The starting point for involvement is always the person with underlying motives, values and needs, activated by an object that is being perceived as important in satisfying needs, goals and values. Examples of the object include a product, service and promotional message.
The significance of the object in satisfying a need is determined by the situation that differs from time to time, resulting in consideration for all three factors (person, object and situation) when reflecting on involvement.
Consumers are most likely to be involved with a product and therefore a purchase decision if one or more of the following applies (the presence of these conditions will most probably lead to extended decision-making):
- the product purchase is important to the consumer,
- the product is of interest to the consumer;
- the purchase entails significant risks;
- the product has some form of emotional appeal; and
- the product can be identified with the norms of a group.
The extent to which alternatives are perceived to be different forms the second factor determining the extent of decision-making. Extended decision-making is therefore the most probable decision-making process when alternatives are perceived as being significantly differentiated and limited and midrange decision-making when alternatives are considered to be similar.
Time availability is the final factor influencing the extent of decision-making. The more time the consumer has available to make a purchase decision, the greater the chance is of extended decision-making. For example, a consumer deciding to purchase a new television to replace an existing older model may engage in extended decision-making, while for the same example the consumer may engage in mid-range or limited decision-making when the current television breaks the day before a major football or tennis game.