Consumer Decision Making Process
As consumers of myriad products we make decisions every moment, at times without realizing that we have actually taken one. Everyday people make consumer decisions on what cuisine to devour on a particular day, where to spend money on the next holiday vacation or simply how much in groceries do you need nee d to buy for this week. Thus consumer decision making process can be defined as the manner in which a buyer identifies or recognizes his requirements, gathers the necessary information related to his needs, assesses the alternatives, purchases the products and finally makes an evaluation of the same. The above definition encompasses certain stages in the whole process of a consumer decision making. According to the traditional consumer decision making model, there are five stages which consumers undergo while taking decisions. The first stage of this process comprises Problem Recognition in which the consumer identifies his problem or needs. For instance, suppose you feel that none of your dresses look good enough to wear to a wedding and you feel strongly you need to get a brand new dress. The next step of the consumer decision making process will thus automatically be Information Search. In this case, you may want to make a list of the brands you are interested in or consult your friends for where you can find that right dress. The third stage of the consumer decision making process consists in evaluating the various alternatives or their brands. Here the consumer assesses the attributes of the individual products to see which one will be closest to his/her requirements. The fourth stage entails decision implementation where there are two things to consider namely what product or which brand to purchase and from which outlet to purchase from. This is the most crucial step as this is the juncture where the actual decision making takes place. The last phase of the process consists in post-purchase evaluation whereby the buyer often thinks over his decision as to whether it was the right choice, especially when it is an expensive product. Autocratic Decision Making Style
As a leader, your first and foremost focus should be on taking apt decisions at various junctures of your professional career. Whether you choose to execute a democratic decision making style or adopt an autocratic one, depends on your personality as a leader and also on the specific situation that requires decision making. Though you might prefer adopting the democratic approach by involving all the members of your team, at times circumstances may demand taking up the autocratic decision making style on your part.
Autocratic decision making refers to the style in which the leader assumes total control over the problems and decisions, without consulting his team members. In such a style, the employer shoulders the whole encumbrance of the decisions and their consequences and banks on his own experience and acumen for taking the same. The autocratic style obviously has its own set of advantages and disadvantages. For instance, the advantages include quick decision making, avoiding delay and the complete liability of the leader. Autocratic style proves efficacious in emergency situations as the leader takes command of the situation and there are no scopes for discrepancies in opinions. The major disadvantage of the autocratic style consists mostly in the apathy on the part of the employees who do not feel motivated enough to carry out the orders of the employer as they are not shouldering any responsibility. Also if the outcome of the decision does not prove favorable or positive, they might harbor a grudge against their leader and might feel that they could have taken a better step. In such cases, the leader tends to lose his integrity in the eyes of his employers. However, there are certain variations to the above style such as the Autocratic Decision Making with Group Information Input and Group Decision Making with Feedback. In the former, the leader takes the control of the problem, but involves the group to extract data about the cause of the problem and goes on to suggest a solution. In the second variation, the leader, after diagnosing the problem and making the decisions, puts forth his views in front of the other members for review and assessment. Business
Decision Making Process
Decision making is vital to any kind of business. However, the process is complicated and involves several factors. An extremely important part of making a good decision is to receive, evaluate and process information. The ability to distinguish between right and wrong and accepting the responsibility of the consequences of a wrong decision is also important in expanding business. There exist different types of business decisions and various techniques that aid in the process of making them. The techniques help in reducing the subjectivity of the matter thereby enhancing the accuracy of a sound decision. The effectiveness of a business increases by promoting cooperation. Creativity and risk taking ability are important factors influencing the selection of the right course of action. If team members and managers always play it safe, then the prospective of the business gets hampered. Decision making is an integral part of running a company, where each and every department must contribute in its own way. The different types of business decisions include strategic, programmed, non programmed, tactical, and operational decisions. The process of decision making involves steps such as identification of the objectives, collection of information and ideas, analysis of the information, making the right choice pertaining to the course of action,
announcement of the course, commencement of the action and finally evaluation of the result. The company may also apply the 80/20 principle in the process. This principle elaborates on using the time and information efficiently to derive positive outcome. It emphasizes that the company should choose the option which will produce 80% of output from only 20% input. It also stresses that within the first 20% of available time period, 80% of the information must be collected and assessed. Another method that can be applied to the process is known as Six Thinking Hats. This is an analysis tool formulated by Edward de Bono which aids in assessing particularly innovative ideas. This promotes parallel thinking in participants and eliminates adversarial proposals. Each participant is required to wear white, yellow, red, black, blue and green hats at the same time and think in a particular manner. It encourages full spectrum thinking and abolishes ego problems. Hence, many industrial tycoons employ this tool in the business decision making process. Components Of A Decision Support System
Decision making, becoming a more and more important and crucial aspect at every step of the functioning of an organization, it is imperative that such critical issues are handled deftly by the managers with alacrity and ease. Hence the advent of the Decision Support System in the world of technology, to help in managerial decision making, especially with unstructured information. Decision Support System, as the very name suggests, constituting myriad components, embraces certain computer-based information systems which support managers at all stages of an organization to take various significant decisions at the micro and macro levels. The Decision Support System comprises four major components, namely the user interface, the database management systems or DBMS, models and analytical tools constituting a model based management systems or MBMS and lastly the DSS architecture and network. Sprague also refers to dialog generation and management software which manages the interface between the user and the system. These four components of the Decision Support System are extremely significant both individually and collectively in taking strategic, technical and operational decisions of an organization. Among the components, the database management system or DBMS controls the information gathered from both the internal and external sources of the company. The model based management system components, on the other hand, is concerned with indepth analysis of sophisticated data and their proper interpretation. It provides various models for the purpose of assessing and interpreting that will help in forming decisions.
The Dialog Generation components of various DSS support the interface and its requirements and also satiate the thirst of the user by apt knowledge representation. Lastly, the User Interface components of Decision Support Systems present the user with tools to manage the various data and their models, thus presenting a coherent system and also providing immediate feedback. Another classification of the components of the Decision Support System has been in vogue which is in the form of Inputs consisting of factors, numbers, and characteristics that needs analysis; User Knowledge and Expertise that are the inputs which the user needs to analyze manually; Outputs or the ultimate information based on which the DSS decisions will be formatted; and Results that is the final decisions taken with the help of the DSS based on the requirements of the user. Consumer Decision Making Process
As consumers of myriad products we make decisions every moment, at times without realizing that we have actually taken one. Everyday people make consumer decisions on what cuisine to devour on a particular day, where to spend money on the next holiday vacation or simply how much in groceries do you need to buy for this week. Thus consumer decision making process can be defined as the manner in which a buyer identifies or recognizes his requirements, gathers the necessary information related to his needs, assesses the alternatives, purchases the products and finally makes an evaluation of the same. The above definition encompasses certain stages in the whole process of a consumer decision making. According to the traditional consumer decision making model, there are five stages which consumers undergo while taking decisions. The first stage of this process comprises Problem Recognition in which the consumer identifies his problem or needs. For instance, suppose you feel that none of your dresses look good enough to wear to a wedding and you feel strongly you need to get a brand new dress. The next step of the consumer decision making process will thus automatically be Information Search. In this case, you may want to make a list of the brands you are interested in or consult your friends for where you can find that right dress. The third stage of the consumer decision making process consists in evaluating the various alternatives or their brands. Here the consumer assesses the attributes of the individual products to see which one will be closest to his/her requirements. The fourth stage entails decision implementation where there are two things to consider namely what product or which brand to purchase and from which outlet to purchase from. This is the most crucial step as this is the juncture where the actual decision making takes place. The last phase of the process consists in post-purchase evaluation whereby the buyer often thinks over his decision as to whether it was the right choice, especially when it is an expensive product.
Decision Making For Management
Making the right decisions at the right time is extremely crucial at all management levels for the smooth functioning of an organization. Proper decision making, whether at the strategic, tactical or operational stages, is essential for the improvement of the company¶s profits and to achieve its goals. Thus a lot depends on the skill, adroitness, wit and analytical deftness of the managers of an organization. There are various models for decision making management such as business ideas, managing teams, strategic planning decision making, thinking techniques for various problems, business communication, and advertising strategy. The major part of the decision making process for management lies in problem solving and continuous reassessment of the decisions taken. As a manager, you can go through the following steps which can aid you in making a quicker and intelligent a decision. As with any other decisions, the first step to managerial decision making is to identify and define the problem which needs attention. You can involve your team members in the same and ask yourself and the others questions like where and how the problem is occurring, when and with whom is it taking place. If a number of problems crop up simultaneously, prioritize which of them needs immediate attention and then go on to make a list of things that should be ideally happening and the obstacles leading to them. It is also important to judge your role in the whole process of decision making. The next stage in the decision making procedure for management entails in carrying out an in-depth analysis of the potential causes that led to the situation. It is always beneficial to consult your team members or someone who you think can act as an expert guide. Once you have identified the reasons that are causing the problems for the management, check out the plausible options and alternatives for the solution of the same. Collect as much data and ideas as you can as this can help you in opening up a wide array of solutions. The following step in decision making for management is in selecting a particular approach as a solution to the problem. Plan the ways to make the decisions work and execute them at the management level and finally review and monitor your decisions. Womens Role In Family Decision Making
With the changing outlook of the society towards women and her role in various activities both inside and outside the family system, the traditional, male chauvinistic role of the father as one to possess the best decision making ability in the family has also undergone drastic transformation. Women, in most part of the world today are no longer compelled to be under the garb of veils and are coming out in the open, shouldering responsibilities in various kinds of decision making and standing at par with men at every tread.
This attitude was a thought completely undreamt of four or five decades back when the men of the family were the sole bread earners and the only person involved in the role of any sort of decision making. The women, on the other hand, were meant to bear the encumbrance of childbirth and rearing and bringing up children along with the responsibility of looking after the home front and the myriad needs of the husband. Education has contributed to a great extent in opening up wide spheres of knowledge both for men and women, whereby people's superstitions regarding the women as the weaker sex has encountered a considerable change. Women are no longer confined to the four walls of the house and take active role in the family decision making, whether it is finances, or earning money, running the household or making decision about the future of her children. Studies have revealed an increasing number of cases where the role of women in the family decision making is primary or at least shared equally with the men. Their role in controlling family finances and making decision as to where the various expenses should be incurred has come to the forefront with researches depicting 37 per cent men dealing with the same individually, 28 per cent with their wives and 30 per cent solely controlled by women. Another direction to the role of women in the family decision making process has been lent by the role of parenting children. Unlike days of yore, when rearing up children was the duty of the mother, as the male members were busy outside, today, with women taking active part in the professional genre, fathers are taking equal interest in the family and molding their child's life. Types
Of Decision Making
Decision Making can be classified under a plethora of types depending upon the kind of decisions taken, the impact of such decisions on the individual, the styles of decision making and the situation in which the decisions are being made. Based on the nature of the decisions, decision making may be of the following 7 types namely Irreversible, Reversible, Delayed, Quick Decisions, Experimental, Trial and Error, and Conditional. The Irreversible decision making type is the one which once made cannot be undone and its consequences will be permanent for a long time to come. Reversible decisions, on the other hand, are transcendental and temporary and can be changed if one wishes to. The third of the 7 types is the Delayed ones; those decisions that need deeper thinking and consideration and can be put on hold for some time. Quick decisions are immediate types which have to be taken at the spur of the moment because of matters of urgency.
The fourth one of the varied decision making types is the Experimental one where the final decisions cannot be taken immediately unless the preliminary consequences are known and the choice is made in an experimental pattern. The Trial and Error types are very similar to the experimental type where the individual goes on taking decisions till the time their consequences prove successful and positive. The Conditional decisions are taken recourse to till the time the person or the manager in an organization sees that it reaps benefits, but changes it as soon as his competitor goes on to take up a new path. Decision making by leaders can also be of various types. Authoritative decision making is said to be in execution when the leader assumes the sole responsibility of the decisions and their consequences, without consulting others. In Facilitative one, both the leader and his group members work together towards a decision. The Consultative type is taken when the leader holds the power to make decisions, but does so in consultation with his members. Lastly, the Delegative type comprises in the leader endowing the responsibility of taking decisions on one or more of his subordinates. Six Step Decision Making Process
Decision making is an art in itself and can often pose to be a tough job. The process of decision making however, can be made less cumbersome by following the six steps which involves certain cognitive procedures such as thinking, evaluation, memory, perception etc. y
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Identify the problem:Defining the problem and the objectives of the decisions that you are about to take and then proceed towards the next pedestal is the first step. Develop alternatives:Gather and develop the myriad alternatives to the problem, taking into account the plausible and even the impossible options. Evaluate alternatives:Evaluating each of the alternatives in details is necessary. An in-depth analysis of the pros and cons of every single alternative is necessary as through this you can exclude the options that you may deem unimportant. Making the decision:After a thorough assessment of all the available options, you are now in a position to make a choice, often assimilating more than one alternative together to arrive at better decisions. Understand the decision:You as well as the others involved in the process get enlightened about the ramifications of the decision making. Audit & Tracking:Auditing and keeping track of the outcome and its progress is extremely essential on a regular basis, as it will tell you whether your six steps of the process has yielded any success.
The six steps decision making process proves quite helpful in solving problems in organizations and in any type of decision making. However, in situations which need
immediate response, this may act as a barrier to taking decisions quickly and may delay the process. Decision Making Styles
Decision making involves a complex process and quite a few styles are followed while making it. Some decision making styles are quite accurately behavioral while others are derived from various models that are followed. Some of the most popular styles of decision making include conceptual style, analytical, impulsive, fatalistic, proactive, flexible, behavioral, dependant and normative styles. Others are also followed while making a decision which include compliance, escape, agony, play it safe, procrastination, intuitive, rational, avoidant and spontaneous. Among these styles, the fatalistic one is an extreme example. This usually means that the decision maker has resigned to fate and believes that he cannot change whatever is happening. The rational and analytical styles are largely dependant on various models of decision making. The impulsive style of arriving at a conclusion does not take into account the consequences. The individual normally follows his first reaction. Agony can also be a tool of deciding a matter at hand. It is an extremely powerful emotion which can force an individual into jumping to a conclusion. When one deliberately chooses a false alternative to avoid being involved in the entire process, he is guided by the emotion to escape. Compliance is basically deciding on going with someone else¶s judgment. Procrastination and play it safe methods are loosely related. Play it safe involves an evaluation of the alternatives available and choosing the one with least risk involvement. The Vroom-Jago model throws light on the dependant type. This model explains the situations when one must follow the dependant approach. Someone taking the flexible approach can move freely between all the other styles. This method is mostly based on the circumstances that an individual is in. The normative approach preoccupies in how the verdict must be arrived at. The famous behaviorist Isabel Briggs Myers propounded a theory that the decision making process is dependant on the cognitive style of human being to a large extent. This personality indicator is based on four dichotomies including extroversion/introversion, thinking/feeling, sensing/intuition and judgment/perception. According to her, the other styles are determined by how people are scoring on these grounds. For instance, if an individual scores more on thinking, extroversion, judgment and sensing, he is more logical and empirical in decision making.
Group Decision Making Exercises
As a leader of your group, you have a lot of responsibilities to execute and one of these is to build up a good team spirit so as to extract proper decision making abilities from each of your group members. In order to do so, it is imperative that you conduct group decision making exercises in the form of role playing and situational games, whereby each of your team members should have the opportunity to participate in groups and thus be motivated to work together as a team. There are a lot of games and role plays that you can choose as group decision making exercises. Generally they are in the form of survival strategies or problematic situations, wherein each group has to come up with inputs from each of its members. One of such group decision making exercises is the Lost At Sea. It aims at building the belief that in such survival situations, a consensus arrived at by considering team decisions rather than that of an individual person helps in better decision making. Here, the whole group may be divided into smaller subgroups consisting of 5 to 12 persons and each person should be given two copies of individual worksheet and each subgroup one copy of Lost At Sea group worksheet. The end product of this game, apart from the various decision making exercises, will be to see who are the most influential persons in each subgroup and how each of them have carried out their leadership duties. A number of survival items are to be mentioned in each of the worksheet given in the exercises and the leader of each subgroup is to see to the fact that all the members arrive at a general consensus as to the hierarchical order in which the items are important. Other such team decision making exercises include Wilderness Survival, Prisoners Dilemma, Plane Crashing Survival Equipments and simple situational problem solving exercises. Consumer Behavior ± The Adult Consumer¶s Decision-Making Process Consumer Behavior ± The Adult Consumer¶s Decision-Making Process Consumer behavior is when people look for products to purchase, use and to evaluate before they buy or dispose of products and services in which they expect will satisfy their wants and needs. Add to this, there are two different types of consumers, the ones that buy for themselves, for gifts or for their house. Next, they purchase for their organizational needs including businesses for profit or non-profit, schools, hospitals, etc. (Schiffman & Kanuk, 2007). Further, this report will give more detail on the adult consumer¶s decision-making process.
First, others can have an influence on the consumer¶s decision-making process such as friends, relatives and there are occurrences that influence the consumers¶ acceptance. Next, word-of-mouth by the opinion leader is the first person that influences the second person by giving their opinion on a product. Further the receiver is the person that accepts the knowledge from the opinion leader. People that look for new products and seek out information are called the opinion seekers (Schiffman & Kanuk, 2007). Next, that 68% of Americans use the internet for work or their personal use (Schiffman & Kanuk, 2007). However, surveys show Americans (adult decision makers) are texting less due to the high cost of texting. As a consequence, an internet poll of 507 consumers by WPP Group-owned Lightspeed Research for Advertising Age found 80% no longer buy texting with their phones to curtail costs in today¶s economy (Creamer, 2008). Further, in this recession consumers are watching less television, text less and use the internet less due to added costs beyond the plans that are basic. The OMD study tested consumer feelings in regards to advertising and there needs to be more advertising that is geared towards products and ways that are savings costs for the consumer (Creamer, 2008). Hence, the adult decision-makers will then look at the advertisements as highly credible sources of information (Schiffman & Kanuk, 2007). For example, GE is advertising that their washing machines are gentle on their clothes and the consumer¶s garments are safe, in order to make up for the higher cost for the quality machines (Helm & Kiley, 2008). In other words, there is good news for the indecision adult for lessexpensive luxuries, because advertisers will be focusing on selling products that make them feel good about their purchases (Creamer, 2008). Add to this, the opinion leaders can give both advice and the proper information when they tell the adult decision-maker they can purchase a product that has higher quality for example saving their clothes and having them last longer in the newest washing machines (Helm & Kiley, 2008). The opinion leaders will again focus on the quality and product category and the decision-maker (the receiver) seeks their advice (Schiffman & Kanuk, 2007).
By comparison, the receiver (the seeker) may end up with post-purchase if he perceives the advertisement a different way or perceives the information from the leader in the wrong way. Therefore, we much examine the motivation so that there is good judgment in choosing the product. The opinion leader good be the person at the store at GE convinced that the product is the best quality, and he will try to convince the opinion receivers. The opinion receiver may end up being a friend and that friend through wordof-mouth will tell the opinion seeker (Schiffman & Kanuk, 2007). Conceivably, there could be a mechanism of fear in regards to emotion from an evolutionary perspective which comes from the front of the brain. Furthermore, this is the part of the brain that the adult makes rational decision-making. At present consumers are suffering from post-traumatic stress disorders, because of the highest point on adult uncertainty in this shaky economy (Herper & Woolley, 2008). In fact, people do not like to take risks and if decisions are difficult they will go to the opinion seeker to get advice from the opinion leader (Schiffman & Kanuk, 2007). Still further, the surrogate buyer will make decisions in the purchase in influencing the buyer, because more people for example need help is purchasing parts for their cars, newest designer clothes, what type of kitchen gadgets to buy, etc. There are four different types of measures in opinion leadership. In the socio metric method the communication is informal and geared towards certain individuals that gave the consumer the advice. Next, is the objective method which in interpersonal in which information was obtained from the internet or research sources. Third, is the self-designating method is when others were given the information by the respondent. This in turn influenced their decision-making process. Fourth is the key informant that analysis the information carefully in socialization and opinion leaders are chosen, which would be the ones that give the most influence (Schiffman & Kanuk, 2007). There were two graduate students from the Massachusetts Institute of Technology that came to the conclusion in their research that the traditional rational model of adult decision-making has no explanation why bad things happen in the short run, because adult consumer decision-makers get tempted to make decisions that are harmful to their
health (smoke, eat too much). Hence, to giving long-term consequences. These gentlemen came up with a website encouraging adult decision-makers to sign a contract that they will either give up smoking or lose weight. Furthermore, they breach the contract they will have to pay a fine and it goes to charity (Karlan, 2008). In fact, marketers have to look at the construct of interest, innovativeness and market maven-ism of adult decision-makers. For example, consumers that are concerned about the information and knowledge, are opinion leaders, are involved with the new products, heavy users of shopping lists (promotional interest consumers). Still further, consumers involved specifically in the brand, fashion conscious or more concerned about the value of the product (Schiffman & Kanuk, 2007). Furthermore, when an adult consumer decision maker consumes a new product they are in the consumption process. First, they want to solve the problem so they start by doing information research. They want to evaluate various brands in their favorite brand category and make a preferred decision based on their perceptions or how they perceive the product will help them. Still further, they evaluate the brand in regards to their usual brand, standard quantity, or usual store, in-home, internet, phone catalog, or paying with cash or credit card (Schiffman & Kanuk, 2007). Add to this, there are four ways that an adult decision maker can view in making decisions. First, an economic views by making decisions that are rational and using the right side of the brain. Further, by evaluating all alternatives and putting them in proper order and is usually based on their knowledge. Next, is the passive view in which the adult decision maker with look at themselves and usually they think about what they want rather then what they need. Therefore, they may end up buying impulsively or irrationally. Third, the cognitive view which is the best view because the adult consumer buys the products because they need them and it is a product or service that adheres to their needs. Finally, is the emotional view that marketers really like to focus on because it has nothing to do with the passive or economic view, and the adult decision maker will buy on emotion rather than on need. For example, the adult consumer sees a model on television wearing the newest fashions and they look beautiful, then the adult consumer
decision maker will want to look like that person. They then have an emotional attraction to the product. Add to this, some emotional decision making can also be rational. For example, a person can treat themselves to a pedicure because it is needed and it is also to pamper oneself because they deserve it (Schiffman & Kanuk, 2007). In other words, the process is how the consumers make the decision and it is based on need recognition or pre-purchase search to search for the product to satisfy the need. Further, the internet provides heavily in this area. Then there are the specific brands that attract to the adult consumer decision maker which is the product, their past experiences can have influence. Additionally, they may want it to buy as a gift socially, and it has to do with their personality, age, income, occupation and value-related considerations (ecological, conflicting, desires, discretion, etc.). Further, there are different attributes in choosing product brands. For example, price, color, size of a TV (Schiffman & Kanuk, 2007). Moreover, the adult consumer decision-maker besides comparison characteristic shopping will have certain rules to go by before making decisions. There¶s compensatory rule in comparing the product and non-compensatory rules, that¶s evaluating the product or service and putting a positive score on the brand or non-compensatory is having a negative evaluation of the brand. Further, the conjunctive decision rule is partially acceptable to the brand. Add to this, the disjunctive rule exceed the meets the expectation of the brand and lexicographic decision rule having to do with the brand importance. In the end, when the adult consumer decision-maker selects the brand it¶s called the affect referral decision rule. To this end, a person can decide on the service or product or they can avoid the product or service. They could have time constraints in which they may make hasty decision-making or maybe they did not get the right information to compare with the alternatives. Also, the marketing strategies can make a difference in their decision-making. There¶s trial purchase for example trying a new software program for thirty days on line. Then, repeat purchases is when the adult consumer decision-maker to back to the store to get a product they have bought before because of its value to them (Schiffman & Kanuk, 2007).
Finally, long-term commitment in which they have bought the product or service and it provided for their needs or solved their problem so they keep going back. In addition if a person has post-purchase cognitive dissonance it means they have purchased a product and then changed their mind about it after the purchase. It depends on the purpose and their past experiences that can have an effect on this pos-purchase cognitive dissonance. They may buy as a gift or again for themselves to treat themselves with something they really want sometimes more so than the need (Schiffman & Kanuk, 2007). In fact, another example of consumer behavior is when a consumer fast forwards the channels to skip the commercials. Cox Communications and Verizon¶s Fios, is working on disabling their fast-forwarding for the ads in order to be ad-skip-free. Hence, to giving media advertisers a way to reach the consumer without being shut out (Learmouth, 2008). In conclusion, the consumption process in when the choice to purchase something is the input and establishing consumption set. Then the style of consuming based on the consumer¶s perspective and experiences which depends on their moods, emotions, etc. To this end it is very important that marketers learn to use relationship marketing in their marketing techniques. The adult consumer decision-makers will end up having trust and loyalty to the brand because they will have felt less insecure in purchasing the product or service.
