Consumer Decision Making

1. Consumer Decision Making

2. Three Perspectives on Decision Making • Decision making perspective • High involvement decisions • Low involvement decisions • Experiential perspective • Behavioral influence perspective

3. Decision Making PerspectiveHigh Involvement Decisions Extended Alternative Evaluation Problem Recognition Extensive Search Complex Choice Acquisition Evaluation

4. Decision Making PerspectiveLow Involvement Decisions Minimal Alternative Evaluation Simple Choice Processes Problem Recognition Limited Search Acquisition Evaluation

5. Experiential Perspective Alternative Evaluation (comparison of affect) Choice (affect-based) Problem Recognition (affect driven) Search for Affect-based Solutions Acquisition Evaluation

6. Behavioral Influence Perspective Choice (behavior results from reinforcers) Problem Recognition (results from discriminative stimulus) Search (learned Response) Acquisition Evaluation (self-perception process)

7. Initial vs. Repeat Purchases • Initial purchases • Tend to require more extensive problem solving • Repeat purchases • Tend to require limited problem solving, sometimes habitual decisions

8. Basic Decision Making Process Problem/Need Recognition Information Search Evaluation of Alternatives Purchase Post-Purchase Evaluation

9. Problem/Need Recognition • Consumer recognizes a gap or discrepancy between his/her current state and his/her desired state.

12. Information Search • Deliberate attempt to gain knowledge about a purchase decision; goal is to reduce uncertainty. • Internal search • Retrieve information from long term memory • External search • Gather information from external sources, e.g., ads, media, friends, stores

13. Determinants of External Search

14. Evaluation of Alternatives • Occurs either separately or in conjunction with information search. • We rely on internal processes to help us organize the evaluation process. • Consideration (evoked set) • Decision rules (heuristics)

15. Consideration Set

16. Decision Rules • Strategies used by consumers to guide decision making. • Some decision rules use product characteristics to guide decisions. • Compensatory • Noncompensatory • Some decision rules rely on stored information in consumers’ memories to guide decisions.

17. Compensatory Decision Rule • Select the best overall brand • Consumer evaluates brand options in terms of each relevant attribute and computes a weighted or summated score for each brand. The consumer chooses the brand with the highest score. • A compensatory model because a positive score on one attribute can outweigh a negative score on another attribute.

18. Noncompensatory Decision Rules • Conjunctive Decision Rule • Consumer sets a minimum standard for each attribute and if a brand fails to pass any standard, it is dropped from consideration. • Reduces a large consideration set to a manageable size. • Often used in conjunction with another decision rule.

19. Noncompensatory Decision Rules • Disjunctive Decision Rule • Consumer sets a minimum acceptable standard as the cutoff point for each attribute--any brand that exceeds the cutoff point is accepted. • Reduces large consideration set to a more manageable number of alternatives. • Consumer may settle for the first satisfactory brand as final choice or may use another decision rule.

20. Noncompensatory Decision Rules • Lexicographic Decision Rule • The consumer ranks the attributes according to importance and then selects the brand that is superior on the most important attribute. • If one brand ranks sufficiently high on just one attribute, it will be selected regardless of how it scores on other attributes.

21. Affect-Referral Rule • Synthesized decision rule • Consumers maintain overall evaluations of brands in their long term memories. Brands on not evaluated on individual attributes but on the highest perceived overall rating.

22. Frame of Reference • Another way in which consumers evaluate information is the frame of reference from which s/he subjectively evaluates messages related to a decision problem. • “Percent lean” vs. “Percent fat” • “Sale” vs. “Clearance”

23. Purchase Decision

24. Post-Purchase Evaluation • Consumers evaluate purchases during consumption process. • Three possible outcomes. • Postpurchase cognitive dissonance. • Complaining behavior.

25. Outcomes • Actual product performance matches prepurchase expectations • Neutral Feeling

26. Outcomes • Actual product performance exceeds prepurchase expectations. • Positive disconfirmation of expectations • Satisfaction

27. Outcomes • Actual product performance is below prepurchase expectations. • Negative disconfirmation of expectations • Dissatisfaction

28. A Continuum of Satisfaction Dissatisfaction Satisfaction Delighted

29. If dissatisfied…. • Alternative actions • Do nothing • Avoid seller/brand in the future • Negative WOM to friends • Seek redress of problem from seller • Complain to outside agency

30. Decision to complain... • Is based on: • Level of dissatisfaction • Importance of decision/purchase • Costs/benefits of actions • Personal characteristics • Attribution of blame

31. Managerial Implications Related to Consumer Decision Making • Understanding decision making process enables marketers to assist consumers along decision pathway. • Offer products that meet needs/wants • Advertising • Making information available • Making product available • Follow-up sales calls, good service