In what ways do consumers stray from a deliberative rational decision process?

Consumers often do not make purchase decisions based on a rational thought process

The manner in which a consumer makes a decision depends on several factors

Decision making

Central route(High involvement)

Peripheral route(Low involvement)

Central Route

Consumers possess enough time and information to evaluate the brand in detail

Based on positive cues such as a celebrity endorsement

Peripheral Route

Variety seeking behaviour

Consumers switch brands to try something new, rather than outof dissatisfaction

Behavioural Decision Theory

Consumer behaviour depends on the context of decision making

Behavioural theorists identified several situations where consumers make irrational decisions

Decision heuristics

AvailabilityBased on quickly available information

AnchoringBased on initial judgment.First impressions are critical

RepresentativeBased on similarity of products with each other

Decision framing

Manner in which choices are presented to and seen by a decision maker

For eg:Rs 20,000 not too expensive in the context of Rs 40,000 phones

Prospect Theory

Consumers frame their decision alternatives in terms of gain or loss according to a value function

For eg: Value function=Buying a house

Cost of interior works seen more favourably in this case

These slides were created by Anju Joseph, MEC Kochi during a Marketing internship by Prof. Sameer Mathur, IIM Lucknow

(See www.IIMInternship.com)