INDIVIDUAL DECISION MAKING Faisal Kalkatawi TA0048 Introduction ◦ Understanding consumer behavior is crucial in marketing. ◦ It allows businesses to create strategies that cater to their customers' needs and preferences. ◦ Our aim is to explore these theories, compare them, and apply them in real-world scenarios involving specific products or brands. ◦ This will help us understand the varying degrees of consumer involvement in the buying process. Theories in Decision Making ◦ The process of making decisions involves a complex interplay of cognitive processes, preferences, and environmental influences. There are multiple theories that seek to explain this process in consumers' decision making. ◦ Main Theories in Focus: ◦ Extended Problem Solving, ◦ Limited Problem Solving, and ◦ Habitual Buying (Solomon, 2014). Extended Problem Solving • The Extended Problem Solving theory is most often applied when a consumer is considering a purchase that could have a significant impact on their life (Solomon, 2014). • This process is characterized by a thorough search for information and a careful evaluation of alternatives before making a decision. • Such decisions are often associated with high-risk, high-cost, or infrequently bought products or services. • For instance, when a consumer is buying a house, they engage in an extensive decision-making process. They collect and evaluate information about the location, price, size, neighborhood safety, proximity to amenities, and more. • Marketers aiming to influence this process need to provide comprehensive, trustworthy information, and highlight the unique selling points of their offerings. They can use tools such as detailed product descriptions, customer reviews, and comparison charts. Limited Problem Solving ◦ The Limited Problem Solving theory comes into play when consumers have some prior experience or knowledge about a product, but still need additional information or persuasion to make a purchase decision (Solomon, 2014). ◦ This decision-making process is typically used for less risky or less expensive purchases than those involving extended problem solving. ◦ Consumers may rely on simple decision rules or heuristics, such as choosing a product because it's on sale or has the highest rating. ◦ For example, when deciding on a new brand of coffee, a consumer might consider factors like price, flavor variety, and customer reviews, but the overall decision-making process would be less intensive compared to buying a car or a house. Habitual Buying ◦ The Habitual Buying theory is used to explain situations where consumers make purchases with minimal thought or information processing (Solomon, 2014). ◦ These decisions typically involve low-cost, frequently purchased products where the perceived risk is low. ◦ Consumers often rely on habits or routines in these situations. ◦ An example of this is when a consumer buys the same brand of toothpaste every time they shop. The consumer has likely had a satisfactory experience with the product in the past, so they continue to purchase it without seeking additional information or considering other brands. Comparison of Theories Extended Problem Solving Limited Problem Solving Habitual Buying Definition Involves extensive information search and careful evaluation of alternatives Consumers have some knowledge but need more information or persuasion Decisions are made with minimal thought, often out of habit When it is used High-risk, high-cost, infrequently bought products Less risky or less expensive purchases Low-cost, frequently purchased products Examples Buying a house, selecting a university, choosing a new car Choosing a new brand of coffee, deciding on a new type of clothing, picking a restaurant Buying the same brand of milk, choosing the same brand of toothpaste Marketing Strategies Provide comprehensive, trustworthy information; highlight unique selling points Highlight unique attributes; offer promotions; showcase positive customer reviews Create strong brand loyalty; maintain product quality; utilize reward programs PRODUCT EXAMPLES AND CONSUMER DECISION PROCESS Extended Problem Solving: Buying a Tesla Model S • Product Involvement: High involvement due to high cost, significance, and perceived risk. • Decision Process: • Consumers would start with a comprehensive research about the vehicle's features, its performance, safety ratings, and customer reviews. They may visit a Tesla showroom for a test drive, compare it to other electric cars, and consider factors such as cost, maintenance, charging infrastructure, and environmental impact before making a final decision. Limited Problem Solving: Choosing Starbucks Coffee • Product Involvement: Moderate involvement due to previous experience but need for additional information. • Decision Process: Consumers already know they like coffee but need to decide why to choose Starbucks over other brands. They might consider factors such as taste, price, location of the coffee shop, ambiance, customer service, and the social image associated with the brand. They might also consider promotional offers and reward programs. Habitual Buying: Purchasing Colgate Toothpaste • Product Involvement: Low involvement because of routine purchase and low perceived risk. • Decision Process: Consumers have been using Colgate toothpaste for years and are satisfied with the product. Their decision to continue buying it is likely based on habit and positive past experience. They don't feel the need to reconsider their decision unless the product changes significantly or they have a negative experience. ENHANCING THE MARKETING EXPERIENCE Extended Problem Solving: Buying a Tesla Model S • As a marketer, one can influence this decision-making process by providing comprehensive, accurate, and easily accessible information about the product. Highlight unique selling points like cutting-edge technology, autopilot features, and environmental benefits. • Offer personalized consultations or test-drive experiences to help consumers better understand the product. • Address concerns about electric vehicles, such as battery life and charging stations, to reduce perceived risk. Limited Problem Solving: Choosing Starbucks Coffee • Marketers can use strategies like loyalty programs, special promotions, or highlighting unique product attributes to influence consumers' decisions. • Enhance the customer experience by maintaining a consistent, pleasant store ambiance and excellent customer service. • Use social media marketing to build a strong brand image and create positive associations with the Starbucks experience. Habitual Buying: Purchasing Colgate Toothpaste • To influence habitual buying, marketers should focus on building and maintaining strong brand loyalty. This can be done by ensuring consistent product quality and creating positive associations with the brand. • Use marketing strategies like reminder advertising, loyalty programs, and in-store promotions to reinforce the habit and encourage repeat purchases. • Respond quickly and effectively to any customer concerns or complaints to prevent negative experiences from disrupting the habitual buying process. Reflection on Knowledge ◦ Understanding the theories of Extended Problem Solving, Limited Problem Solving, and Habitual Buying has deepened our insight into the complexities of consumer decision-making processes (Solomon, 2014). ◦ Each theory applies to different types of purchases and involves varying degrees of consumer involvement, information search, and evaluation of alternatives. ◦ The examples of buying a Tesla Model S, choosing Starbucks coffee, and purchasing Colgate toothpaste have further illustrated how these theories apply to real-life situations and how they can guide marketing strategies. ◦ As marketers, these theories can help us better cater to our consumers' needs, depending on the type of purchase decision they are making. Whether it's providing detailed information, offering promotions, or building strong brand loyalty, each strategy corresponds to a specific decision-making process. Conclusion and Recommendation • The theories of Extended Problem Solving, Limited Problem Solving, and Habitual Buying provide valuable insights into consumer decision-making processes (Solomon, 2014). • By understanding these theories, marketers can better predict consumer behavior and tailor their strategies accordingly. Recommendations: • Extended Problem Solving: For products or services that fall into this category, marketers should focus on providing comprehensive, accurate, and easily accessible information. Offering personalized consultations or experiences may also be beneficial. • Limited Problem Solving: Marketers should aim to highlight the unique attributes of their product or service, offer promotions or discounts, and build a strong brand image to influence consumers' decisions. • Habitual Buying: To influence this process, marketers should aim to build and maintain strong brand loyalty. Consistency in product quality, effective reminder advertising, and quick response to customer concerns are key. References ◦ Solomon, M. R. (2014). Consumer behavior: Buying, having, and being (10th ed.). Pearson. ◦ Jurevičienė, D., Skvarciany, V. and Lagunavičiūtė, A., 2020. Factors influencing individuals’ decision-making and causing financial crisis. Journal of Business Economics and Management, 21, pp.1149-1164. ◦ Varah, F., Mahongnao, M., Pani, B. and Khamrang, S., 2021. Exploring young consumers’ intention toward green products: applying an extended theory of planned behavior. Environment, Development and Sustainability, 23, pp.91819195. ◦ Sethna, Z. and Blythe, J., 2019. Consumer behaviour. Sage. ◦ Brandtner, P., Darbanian, F., Falatouri, T. and Udokwu, C., 2021. Impact of COVID-19 on the customer end of retail supply chains: A big data analysis of consumer satisfaction. Sustainability, 13(3), p.1464.
