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Consumer Decision Making II. MKT 750 Dr. West. Agenda. Back to Stages of Decision Making Evaluation of Alternative, Decision Rules, Choice and Post-purchase Evaluation A Model of Customer Satisfaction. Need Recognition. Search. Alternative Evaluation. Choice. Post-Purchase

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Consumer Decision Making II

MKT 750

Dr. West


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Agenda

  • Back to Stages of Decision Making

    • Evaluation of Alternative, Decision Rules, Choice and Post-purchase Evaluation

  • A Model of Customer Satisfaction


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Need

Recognition

Search

Alternative

Evaluation

Choice

Post-Purchase

Evaluation

Rational Decision Making:


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Evaluating Alternatives

  • Determine criteria to be used for

  • evaluation of products

  • Assess the relative importance of the

  • each criteria

  • Evaluate each product based on the

  • identified criteria


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Evaluating Alternatives

  • Criteria for the purchase of a car:

    • Space

    • Reliability

    • Safety

    • Longevity

    • Handling

    • Styling


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Evaluating Alternatives

  • Assessing Importance: ei

    • Space 5

    • Reliability 4

    • Safety 4

    • Longevity 3

    • Handling 3

    • Styling 2

* Importance: 5=Most Important, 1=Least Important


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Evaluating Alternatives

  • Beliefs Regarding Product Performance:

Product Evaluation: 4=Excellent, 3=Very Good, 2=Good, 1=Fair


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Decision Rules

  • Cutoffs/Thresholds: restriction or requirements for acceptable performance

  • Signals are product attributes used to infer other product attributes (e.g. high price often infers higher quality)


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Decision Rules

  • Compensatory Rule: a perceived weakness of one attribute may be offset or compensated for by the perceived strength of another attribute

  • Noncompensatory Rule: a product’s weakness on one attribute cannot be offset by strong performance on another attribute


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Compensatory Decision Rules

  • Simple additive (Equal Weight):bi

    The consumer adds the product evaluations across the set of salient evaluative criteria. The product with the largest score is chosen.

  • Weighted additive:biei

    Judgments of product evaluations are weighted according to importance




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Noncompensatory Decision Rules:

  • Lexicographic strategy:

    • Brands are compared on their most important attribute, and the winner is chosen.

    • If there is a tie the second most-important is considered, and so on, until a choice is identified





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Noncompensatory Decision Rules:

  • Elimination by aspects (EBA):

    • Brands are compared on an attribute by attribute basis.

    • Alternatives are eliminated that fall below the consumer imposed cutoffs.

    • Process continues until a single alternative remains.



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Noncompensatory Decision Rules:

  • Conjunctive strategy (Satisficing):

    • Brand are evaluated, one at a time, against a set of thresholds established for each attribute.

    • The first brand that meets or exceeds the threshold for each attribute is chosen.



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Determinants of Satisfaction:

  • What happens when product performance doesn’t meet expectations?

    • Assimilation – a reluctance to acknowledge discrepancies via rationalization and attribution

    • Contrast – the tendency to exaggerate differences, a phenomenon known as reactance


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Assimilation & Contrast

Assimilation Contrast

10

Favorable 9

Performance 8

7

6 Expectation

Unfavorable 5

Performance 4

3

2

1

Zone of Tolerance


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Negative Disconfirmation

“Disappointment”

Expectancy Disconfirmation

10High Expectations

Favorable 9

Performance 8

7

6

Unfavorable 5

Performance 4

3

2

1

Dissatisfaction Satisfaction

Zone Zone


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Negative Disconfirmation

“Betrayal”

Expectancy Disconfirmation

10High Expectations

Favorable 9

Performance 8

7

6

Unfavorable 5

Performance 4

3

2

1

Dissatisfaction Satisfaction

Zone Zone


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Positive Disconfirmation

“Ambivalence”

Expectancy Disconfirmation

10

Favorable 9

Performance 8

7

6

Unfavorable 5

Performance 4

3

2

1Low Expectations

Dissatisfaction Satisfaction

Zone Zone


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Expectancy Disconfirmation

10

Favorable 9

Performance 8

7

6

Unfavorable 5

Performance 4

3

2

1Low Expectations

Dissatisfaction Satisfaction

Zone Zone

Positive Disconfirmation

“Elation”


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Customer Satisfaction

  • Satisfaction influences repeat buying

  • Positive post-consumption evaluations

  • are essential for retaining customers

  • The likelihood that customers will

  • remain loyal depends on their level of

  • satisfaction


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Customer Satisfaction

  • It Shapes Word-of-Mouth

  • Consumers often talk about their

  • consumption experiences

  • A firm’s ability to satisfy customers will

  • affect its success in retaining current

  • customers as well as recruiting new ones


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Customer Satisfaction

  • Implications for Competitive Strategy

  • Monitor satisfaction levels

  • Encourage dissatisfied customers to

  • voice their concerns

  • Have a recovery system in place to

  • address customer concerns


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Influencing Expectations

  • Advertising claims

  • Brand names

  • Packaging

  • Price