Each buying decision you make involves an elaborate mental thought process, a degree of active reasoning, though on the surface it may not always seem to be so. This may be because over a period of time you have taken certain buying decisions so many times that they now seem to be made almost automatically but that is not true at all. Even your daily decision of buying a loaf of bread involves the element of active reasoning as buying a new sofa set for your drawing room. However, in the former case, the extent and intensity of active reasoning may be much less as compared to the latter case. In the case of bread, the only decision variables may be which brand, quantity and retail outlet. But in the case of buying a sofa set the decision variables are far more in number. These may be:
- Ready-made or made to order
- From a furniture shop or to be built at home
- Type of material for frame: wood, steel, aluminum
- Type of material for cushion: cloth, rexine, leather
- Design: with or without armrests, height, depth of seat, seating capacity, loose or fixed cushion.
Thus, depending on the type of decision being made, the degree and strength of active reasoning will vary. There are three factors, which influence the degree of active reasoning that is undertaken by the consumer in his process of decision-making. These are:
1. Involvement
The degree of personal involvement is a key factor in shaping the type of decision process that consumers will be followed. Involvement is the level of perceived personal importance and/or interest evoked by a stimulus within a specific situation. When a product is perceived to be of great importance to the customer, such as personal clothing, or its purchase involves a great deal of money or risk such as jeweler, car, house, company shares, the level of involvement in making the decision is likely to be very high. The consumer is likely to spend a great deal of time before arriving at the final decision. In contrast, when buying items which do not reflect much on the consumer’s personality or their purchase involves small amounts of money or the risks associated with them is not high, the degree of involvement of the consumer is likely to be low. Products such as shoes, polish, toilet soap, toothpaste, biscuits etc. would fall in this category. Several factors exist that determine the degree of involvement consumers have in making a decision. Some of them are as under:
- Personal Factors: The degree of involvement tends to be higher when the outcome of the decision affects the person directly. Personal factors include self-image, health, beauty, or physical condition. Without activation of need and drive, there will be no involvement, and it is strongest when the product or service is perceived as enhancing self image. When that is the case, involvement is likely to be enduring and no function as a stable trait, as opposed to being situational or temporary. For example, the purchase of the wedding trousseau, tends to be a high involvement decision because your wedding is a special occasion and it also affects directly your self-image and looks. A consumer’s physical handicap may also affect how involved he or she is in buying a home. Are there steps leading up to the house? Is there a bedroom on the first floor, and are doorways wide enough to accommodate a wheel chair?
- Product Factors: Products or brands also become involving if there is some perceived risk in purchasing and using them. Many types of perceived risks have been identified, including physical (risk of bodily harm), psychological (especially, a negative effect on self-image), performance (fear that the product will not perform as expected), and financial (risk that outcomes will lead to loss of earnings). As is logical, the greater the perceived risk, the greater the likelihood of high involvement. When perceived risk becomes unacceptably high, there is motivation either to avoid purchase and use altogether or to minimize risk through the search and pre-purchase alternative evaluation stages in extended problem solving. For example, we may become highly involved in the choice of a doctor, especially when surgery is required, because of the high-perceived risk.
- Situational Factors: Situational or instrumental involvement includes factors such as whether the product is purchased for personal use or as a gift, and whether it is consumed alone or with others. Situational involvement changes over time. It may be strong on a temporary basis and wanes once purchasing outcomes are resolved. This is usually the case with fads such as trendy clothing items in which involvement is high initially but quickly diminishes once the item is worn and fashions begin to change. There also are times when an otherwise uninvolving product takes on a different degree of relevance because
2. Differentiation
When the consumer perceives that the various alternatives which are available are very different from one another in terms of their features and benefits offered, he is likely to spend more time in gathering information about and evaluating these different features. On the other hand, in case of products which are not very different from one another either in terms of their features or benefits offered, the consumer is bound to perceive them as being almost the same and buy the first available product/brand which satisfies his minimum expectation. He will not like to spend much time in evaluating the various alternatives. The various brands of washing powder available in the market today are an excellent example of low level of differentiation with the consumer perceiving the different brands to be offering almost identical benefit. All the brands look similar with identical packing and carry almost the same price tag. Till a few years ago the branded shoes was highly undifferentiated with Bata offering standard options to consumers in terms of styles of shoes. Then came the different players in this market like Woodlands and a host of other multinational brands creating on the way a multitude of segments in the otherwise staid shoes market like formal, casual, sports shoes etc.
3. Time Pressure
When you are under pressure to make a decision, you cannot afford to spend a long time finding out about the various products or brands. You would probably buy whatever is readily available. While traveling your car tyre busts and you don’t have a spare and hence you need to buy a new one. At that time you would buy the brand that is available at whatever price without giving it too much thought. But under a different situation, when you need to buy new tyres, you would certainly like to find the features of nylon and radial tyres and evaluate various brands on their individual advantages and disadvantages.