The Consumer Decision Making Conceptual Framework

Utilising the Neal et al. (2006) and McCarthy et al. (1997) models as a basis some adjustments were made to accommodate financial services decision making. These included the recognition of a highly complicated high-credence problem that is undertaken over large time frames with many moderating variables (Chung-Herrera, 2007; Ennew, 1993; Harrison, 2003b; Harrison, et al., 2006; McKechnie, 1993). As a result the model was adapted by broadening the concepts of process and time. The outcome of this is a model proposed to be suited to addressing the decision making process relevant to financial services. The following generic process was adopted to explore the impact life events have on decision-making.

Figure 2-5: Conceptual Framework for the study

There are ten components in the model and they are broadly grouped into three categories which are consistent with other decision making models; inputs, processes and outputs (Engel, et al., 1968; Harrison, et al., 2006). The component of purchase situation (1.1) includes contextual and environmental variables as well as the purchase purpose (Novak & Hoffman, 2008). Purchase situation is directly relevant to this study

Life Events

because it includes life events. This study seeks to recognise the change a life event will have on the resultant expected heightening of need arousal. From a communications perspective this is important. Individuals are more likely to change values, attitudes and priorities in response to a combination of a life event and communication than in response to marketing communications alone (Mackay, 1998). The second component of the conceptual framework is consumer characteristics (1.2) which are an amalgam of the two inputs from the McCarthy et al. model (1997). The two inputs being psychological and social influences or simply described by Neal et al. (2006) as the consumer. The third component is information (1.3) from organisations or interpersonal sources which can arouse need (Neal, et al., 2006). Need arousal is the fourth component of the conceptual framework (2.1). It is the first procedural component of the decision making process and is seen as the trigger for the continuation of the process (Bruner & Pomazal, 1993). In the context of this study it has been raised above the other procedural components to indicate the order established by previous models (McCarthy, et al., 1997; Neal, et al., 2006). Information gathering is the fifth component (2.2) and is the collection of information, from any source, to aid in the resolution of the problem (Mata & Nunes, 2010; Punj & Moore, 2009). The sixth component (2.3) is criteria development which will be used to evaluate the different alternatives (IsIklar &

Büyüközkan, 2007; McCarthy, et al., 1997). Evaluation of alternatives (2.4) is seventh component and includes mechanisms such as heuristics or decision strategies (Plous, 1993) used to evaluate goods (IsIklar & Büyüközkan, 2007; Pfeiffer, et al., 2009).

Contingent processing (Olshavsky & Granbois, 1979; Plous, 1993) meant that evaluation techniques for financial services needed to be broadened to include choice rules such as agency, conformity, imitation and recommendations.

The output variables, whilst unable to be tested in a cross-sectional study are present in the conceptual framework for perspective. Decision or choice is the eighth component

of the conceptual framework (Figure 2-5, step 3.1) and is considered separate to purchase as it does not necessarily lead to purchase. The ninth component is purchase (3.2) which involves the act of exchanging value. Post-decision evaluation is the tenth component (3.3). This variable has been altered from the norm of post-purchase evaluation. These decision making processes are considered to be iterative and can be seen as trials or shopping experiences leading to ‘no- decision’. They are recycled into consumer’s memories, attitudes and further experiences through the feedback loop.

It has been suggested that many consumers, particularly mature aged consumers, rely largely on prior knowledge and in-built preconceived criteria when making a decision (Mata & Nunes, 2010; Yoon, Cole, & Lee, 2009). Thus particular emphasis will be placed on information search.

2.4.2.1 Discussion of the conceptual framework for the study

The conceptual framework is based on the models developed by Neal et al. (2006) and McCarthy et al. (1997). It is adapted slightly in terms of direction and relationship between variables as well as timeliness to complete the process.

Financial services are considered to be high in credence qualities (Darby & Karni, 1973;

Nelson, 1970) as they are complex to evaluate even after purchase. For example, consumers have difficulty evaluating the advice provided after a meeting with a financial planner. Often an assessment of this value requires further cost such as an investment of funds in accordance with the advice (Eisingerich & Bell, 2007; Harrison, et al., 2006).

It has been noted that financial services may have decisions that last over many years with several failed attempts to purchase (Harrison, et al., 2006; McKechnie, 1993;

McKechnie & Harrison, 1995).They may also be shopping without purchase intentions (Bloch & Richins, 1983; Bloch, et al., 1986; Earl & Potts, 2000). This implies that not

only can consumers stop mid-decision but that they may also pause for months at a time (Greenleaf & Lehmann, 1995). Furthermore, the concept of consumers moving in a linear process through decision making is debatable with the findings that some decision making processes involve screening, phasing and multiple stages (Aribarg &

Foutz, 2009; Payne, Bettman, & Johnson, 1988). There are indications that complex decisions that can take many years to develop may not follow the path of arousal, search, evaluate and choice but rather sample the components in magnitude and the direction as experienced by the consumer (Harrison, et al., 2006; Malhotra, 1982; Witte, 1972). For these reasons the conceptual framework has been depicted with out a time frame and a non-discrete direction of process elements.