Reference no: EM13854503

Decision making part 1 (Problem Recognition and Information Search)

The most comprehensive decision making model is presented hereafter. This logico-rational model details all the steps that a consumer may go through when purchasing a product. Obviously, as consumers, we do not use such a complex process every time we make a purchase. Often some of these steps are shorter or performed in an automated fashion, but by studying each of these steps, one can better understand even the most complex decisions making processes as well as the simple ones.

Problem Recognition

As mentioned in the motivation chapter, in order to start the decision making process, consumers are urged to fulfill a need or reach an opportunity that arises because their current state is not at the same level as their ideal state. As they are driven toward returning to the equilibrium, consumers will recognize the need to act and start their decision making process.

Information Search

Information search is a critical step in the logico-rational approach for complex decision as the quality of information and the way it is presented will have a direct influence on the chosen option. There are different types of information search. First we can distinguish between Internal search (retrieving knowledge and past experience stored in memory) and External search (collecting information from peers, family, and the marketplace) as well as a passive search (information we gather without an immediate goal in mind) and active information search (consumers engage in active information search to help them reach an immediate goal). Additional categorizations are presented in the table below. These categorizations are important because they show that consumers have the tendency to trust personal sources more than any other type of sources. However, the most reliable and impartial sources are independent sources. This bias in information value often introduces questionable decision making process as they are not made on the best possible information sources.

In addition, several variables have an influence on the amount of information search that consumers make when making a decision. These influences are detailed hereafter.

- The higher the Perceived risk associated with the purchase, the more information the consumers will search for.

- The higher the Involvement in the product to purchase, the more information the consumers will search for.

- The higher the Expertise of the consumer with the product, the less pre-purchase information the consumers will search for.

- The more time pressure consumers have when purchasing a product, the less information the consumers will search for.

Discussion question: Describe the latest important purchase you have made. What kind of information have you used to help you in your decision making process? Repeat the question for the latest trivial purchase you have just made.