The household decision making process in replacement of durable goods

Abstract: As durables are essential in many households, the level of ownership is high and, due to the high degree of penetration, a vast proportion of the current sales are replacement purchases. Even though a lot of research attention has been paid to decision making and decision processes many models are oriented towards non-durable goods and although a majority of purchases of many durable goods are replacements, few studies seem to make a distinction between a replacement purchase decision and a decision to buy an item for the first time.The purpose of this thesis has been to increase the understanding of the consumer decision process in replacement purchase. More specifically, the research focus has been on the cognitive mechanisms behind the formation of a replacement decision and on factors affecting the timing of a replacement purchase of durable goods. Choosing to study the timing of replacement decisions reflects the emphasis on the ongoing process, not merely on what is happening at a certain moment. Many studies in the consumer behaviour research are cross-sectional and by using cross-sectional data, there is a risk of identifying cohort effects rather then identifying effects stemming from the individual process over time. This thesis' focus on the process is reflected in and emphasised by the choice of method, both a cross-sectional and a longitudinal study have been undertaken.In order to address the research question, a theoretical framework and model were developed. The model is based on the traditional idea that many actual purchase decisions are realised through the approach of problem solving, entailing problem identification, information search, evaluation of alternatives, choice, and action. The underlying assumption of the model is that purchase expectations are related to a comparison between an aspiration level, defined in accordance with Simon's (1956) satisficing principle, and an evaluation of the currently owned product (current level). Purchase expectations are believed to be the result of a cognitive process encompassing the comparison between aspiration level and current level. When the discrepancy between aspiration level and current level goes beyond a noticeable difference, a purchase expectation is assumed to be formed and the purchase process initiated.The results from this studyreveal that the cognitive mechanism behind a replacement decision can be explained in accordance with the proposed model: Consumers compare the currently owned product with requirements of product for the same usage and if the current product falls below the requirements, replacement plans are formed. The timing of the replacement is therefore argued to depend both on factors effecting the requirements of a product for the same usage (the aspiration level), and on factors affecting the perception of the current product (the current level).Moreover, the study indicates that problem identification initiated through a change either in aspiration level or in current level might evoke different decision strategies and consequently, the problem identification stage might be more important for marketing strategies than previously assumed. The results aslo highlight the importance of considering the consumers present stage in the decision process for achieving an efficient segmentation for market communication as product attributes important early in the process might not be important later in the process.