*Class 16
Consumer Decision
Making
CA 2018 Consumer Insight
A.Kwanta Sirivajjanangkul
A.Panitta Kanchanavasita
Albert Laurence School of Communication Arts
Department of Advertising
*
Decision Making
• Basic sequence of steps we undergo when we make
decisions
Buying and
Disposing
• How the particular situation in which we find ourselves
affects these decisions and how we go about evaluating
the results of our choices
Group Influence
and Opinion
Leadership
• An overview of group processes and discusses the
reasons we are motivated to conform to the
expectations of others when we choose and display our
phurchases
Organizational
and Household
Decision Making
• The purchase decisions in conjunction with others,
especially coworkers or family members
*
1. We Are Problem Solvers
2. Type of Consumer Decisions
3. Steps in Decision Making Process
*Problem Recognition
*Information Search
*Evaluation of Alternatives
*Product Choice
4. Rules-of Thumb
1
*
1
*
Problem Recognition
Information Search
Evaluation of
Alternatives
Product Choice
Outcomes
*Consumer purchase is a response to a problem
2
*
2
*
1. Extended Problem Solving:
*Most closely to traditional decision making
*Collect as much as information search both from
our memory (internal search) and from outside
source such as Google
*Evaluate each product alternative – often
consider the attributes of one brand at a time
2
*
2. Limited Problem Solving:
*More straightforward and simple
*We are likely to use simple decision rules as we
choose among alternatives
*These cognitive shortcuts enable us to fall back
on general guidelines, instead of having to start
from scratch every time we need to decide
2
*
3. Habitual Problem Solving:
*We choose choices with little conscious effort
*Many purchases are so routinized that we may
not realize we have made them until we look in
our shopping carts
*We make these choices without conscious
control – “automaticity”
2
*
Routine Response
Behavior
Limited Problem
Solving
Low cost products
Frequent purchasing
Low consumer involvement
Familiar product class and brands
Little thought search or time given
to purchase
Extended Problem
Solving
Expensive product
infrequent purchasing
High consumer involvement
Unfamiliar product class and brands
Extensive thought search or time given
to purchase
*
2
Limited Problem Solving
Motivation
Low risk and involvement
Information Search Little search
Information processed
passively
In-store decision likely
Extended Problem Solving
High risk and involvement
Extensive search
Information processed actively
Multiple sources consulted prior
to visits
Alternative
Evaluation
Weakly held beliefs
Only most prominent criteria
used
Alternatives perceived as
basically similar
Noncompensatory strategy
used
Strongly held beliefs
Many criteria used
Significant differences perceived
among alternatives
Compensatory strategy used
Purchase
Limited shopping time; may
prefer self-service
Choice often influenced by
store displays
Many outlets shopped if needed
Communication with store
personnel often desirable
3
*
3
*
* When we experience a significant between our current
state of affairs and some state we desire
* We realize that to get from here to there we need to
solve problem
* Problem could be small, large or complex
* Ex. We are hungry  we need to find something to eat
* Ex. We are tired  we need to take a rest
* Ex. We need a new eco car  we need to buy a new car
?
*
3
Problem Recognition: Shifts in actual or ideal state
Ideal
Ideal
Ideal state
Actual state
Actual
Actual
No Problem
Opportunity
Recognition
Need Recognition
3
*
* The process by which we survey the environment for
appropriate data to make a reasonable decision
* Recognizing a need and search the marketplace for
specific information  prepurchase search
* Browsing and searching to stay up-to-date on what’s
happening in the marketplace  ongoing search
* Internal search: scan our own memory banks to
assemble information about different product
alternatives
* External search: obtain information from
advertisements, friends, or just plain people watching
3 *
Prepurchase Search
Ongoing Search
Determinants
Involvement in the purchase
Market environment
Situational factors
Determinants
Involvement in the product
Market environment
Situational factors
Motives
Making better purchase decisions
Motives
Building a bank of information for future
use
Experiencing fun and pleasure
Outcomes
Increased product and market
knowledge
Better purchase decisions
Increased satisfaction with the
purchase outcome
Outcomes
Increased product and market knowledge
leading to
• Future buying efficiencies
• Personal influence
Increase impulse buying
Increased satisfaction from search and
other outcomes
*
3
* We search more:
Amount of Search
* when the purchase is important
* when we have more of a need to learn more about the purchase
* when it is easy to obtain the relevant information
Product Knowledge
* The Relationship Between Amount of Information Search and Product Knowledge
3
*
3
*
* Evoked set: the alternatives that consumers know
* Consideration set: the alternatives that consumers
consider
* Consumers do not consider every single brand they know
about because it is out of their price range or they have
had a bad experience with it
* Consumers often consider a small number of
alternatives
3
*
* How do we put products into categories?
* Knowledge Structure: a set of beliefs
and the way we
organize these beliefs in our minds
* Marketers need to ensure that customers correctly group
their products
* There are basically 3 levels for product category:
* Superordinate category: is more abstract ex. Dessert
* Basic level category: the most useful to classify product, group
product that have a lot in common with each other, but still
have a broad enough range of alternatives ex. Fatterning
dessert or Nonfatterning dessert
* Subordinate category: is more specific, often include individual
brands ex. Ice cream, pie, cake
3
*
3*
1.
Position a Product
*
2.
Positioning strategy has ability to convince consumers to consider
products within a given category
Identify Competitors
* At the abstract, superordinate level, many products will be compared
with other brands in the same category
* Creating an overlapping category can associate consumers to think
about different attributes
3.
Create an Examplar Product
* Create a sample to make product to be easy to recognize and recall
4.
Locate Products in a Store
* Product categorization also can affect consumers’ expectations
regarding the places they can locate a desired product
3
*
3*
* Evaluation Criteria: the dimensions we use to judge
the merits of competing options
* Mostly, the choices will be considered based on each
product attributes of each brand
* Determinant Attributes: are the feature we actually
use to differentiate among our choices
3*
* Recommendations for marketers to create a new
decision criterion
* Messages should convey 3 pieces of information:
1. There are significant among brands on the attributes
2. There is a decision making rule ex. If…(deciding
among competing brands), then … (use the attributes
as a criterion).
3.
There is a rule that consistent with how the person
made the decision on prior occasions
4
*
4
*
“rules-of-thumb”
*
4
* Heuristics: or mental rules-of-thumb to make a speedy
decision
* It happens especially when limited problems solving occurs
prior to making a choice
* These rules can range from the very general
* Ex. Higher priced product = higher quality
* Ex. Buy the same brand I bought last time
* And it could range to the very specific
* Ex. Buy Domino, the brand of sugar my mother always
bought
* Consumers often simplify when they use heuristics
such as automatically choosing a favorite color or
brand
4
*
* Product signal: the visible elements ex. Brand names,
country of origin, price, the retail outlets that carry the
product
* Country of Origin: is a determinant attribute in the
decision-making process
* Consumers strongly associate certain items with specific
countries and products from those countries often attempt
to benefit from these linkages
* Ethnocentrism: is the tendency to prefer products or
people of one’s own culture to those of other countries
* Ethnocentric consumers are likely to feel it is wrong to
buy products made elsewhere, particularly this may have a
negative effect on the domestic industry
4
* Do We Choose Familiar
Brand Names Because of
Loyalty or Habit?
*
4
*Inertia: The Lazy Customer
* Consumers buy a brand out of habit because it requires less
effort
* If the product is out of stock, they will not hesitate to change
their mind
*Brand Loyalty: A “Friend”, “Tried-and- True”
* Brand loyalty describes repeat purchasing behavior that
reflects a conscious decision to continue buying the same
brand
* They will not only buy the brand but they will also have a
strong positive attitude toward the brand
*Any Questions