Chapter 8
Consumer
Consumer Decision Making
Decision Making
Snapshot from the Marketplace
One culprit in our economy’s recent downturn
was the subprime mortgage crisis.
View vary regarding precisely who was
responsible for the collapse of the market.
Many observers blame faulty decision making on
the part of consumers to take out such loans just
as much as faulty decision making on the part of
the banks that issued these loans.
Consumers and Decisions
The U.S. consumer is one of the most
cared for and pampered in the world.
Consumers in our society are faced with a
wide product selection, vast product
information, and myriads of places at
which to shop.
The process of buying is almost always
preceded by some sort of decision
process.
The Decision Process
A decision is an act that occurs only if we
are faced with two or more alternative
courses of action, all of which have high
probabilities of bringing about a desired end
result.
Are Consumers Rational?
Unlike the rational decision maker picture
painted by classical economic theory, we as
consumers are unlikely to act as computing
entities that mathematically gauge the outcomes
of each alternative considered.
We engage in a variety of shortcuts to make
choices by weighing shopping effort against task
importance, a tendency known as constructive
processing.
Q. 1. Define Involvement.
Effort Variation in Decision Making
Effort consumers expend when buying is largely
a function of involvement.
Involvement: Degree of personal
relevance a product or service
holds for the consumer
Two degrees of involvement:
Low involvement
High involvement
Marketing Implications of Different
Levels of Involvement
High-Involvement Purchase and Consumption
Complex purchase process by highly involved
consumers
Attention is increased and more importance is
attached to the stimulus object.
Low-Involvement Purchase and Consumption
Minimal decision making for low-involvement
products
Attention is low and less importance is attached to
the stimulus object
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Classification of Decision-Making
Decisions fall somewhere between the two extremes of:
Nonprogrammed Decisions: Novel or infrequently
encountered decisions requiring a tailored approach
 These include:
Extended problem solving
Limited problem solving
Impulse purchases
Programmed Decisions:
Habitual routines requiring no
special thought
Q. 2. What are types and
characteristics of
consumer involvement?
Consumer Involvement
 Cognitive involvement
involvement that includes heightened thinking and
processing of information about the goal object.
 Affective involvement
involvement that includes heightened feelings and
emotional energy.
 Enduring involvement
represents the long-term interest that a consumer has
in a product class.
 Situational involvement
temporary interest in a purchase or consumption
process.
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Q. 3. What is the nature of
the consumer decision
process?
Stages in Problem Solving
1. Problem recognition
2. Search activity
3. Identifying and evaluating
alternative solutions
4. Purchase or commitment
5. Postpurchase considerations
Problem
Recognition
Internal
Search
External
Postpurchase
Considerations
Purchase
Identifying and
Evaluating Alternative
1. Problem Recognition
To get consumers to act, it is
necessary for marketers to
arouse in consumers a state of
tension or incongruity between
an actual and a desired state of
affairs.
Problem recognition &
its associated tension state
trigger behavior
Sources of Problem Recognition
Assortment depletions
Assortment inadequacies due to changing
life circumstances
Other product acquisitions
Product obsolescence
Expanded or contracted means
Expanded awareness via marketing stimuli
2. Search Activity
Familiarizing oneself with courses of action
available to solve the problem
Types of search
Internal Search: Retrieving relevant
information from memory
Sharpening
Leveling
External Search: Seeking
information from exogenous (outside)
sources
3. Identifying & Evaluating Alternative
Solutions
Two activities are involved in the
evaluation process:
A. To narrow down product alternatives to a
manageable number
B. To evaluate attributes of each alternative
in order to select the best option
3. Identifying & Evaluating Alternative
Solutions (cont’d)
A. Narrowing down product alternatives calls to
mind our evoked set
An evoked set is a small number of brands that we
recall when we contemplate buying a particular
product
Consumers often seek to simplify purchase
decisions by seeking shortcuts to reduce both
mental and physical shopping effort—a practice
known as employing heuristics
3. Identifying & Evaluating Alternative
Solutions (cont’d)
B. Evaluating attributes of the
contemplated choices can be either effortladen (in the case of systematic information
search) or effortless (in the case of
heuristic processing).
3. Identifying & Evaluating Alternative
Solutions (cont’d)
Assessing the positiveness or negativeness of
alternatives can be explained by Prospect theory.
This theory suggests that a consumer’s perceptual
apparatus is attuned to the evaluation of relative
rather than absolute magnitude of value.
According to this theory, as a consumer
psychologically evaluates the positiveness or
negativeness of prospects (options), the evaluation
of the impact of these possible outcomes does not
always align with their actual value.
4. Purchase or Commitment
The purchase decision is the outcome of the search
process.
Consumers use a number of decision rules
(analytical procedures) to reach a choice among
alternatives.
Types of decision rules:
Compensatory: simultaneous evaluation of alternatives
on various product attributes—a high score on one
attribute of a brand can offset a low score on another
Noncompensatory: alternatives are evaluated singly,
eliminating options that fail to meet a specific important
attribute
5. Postpurchase Considerations
Feelings of satisfaction or dissatisfaction due
to product performance are natural outcomes
of the purchase process
Distinguish between:
Instrumental performance: utilitarian
performance of the product as a means to a set
of ends
Expressive performance: the social or
psychological aspects of the product that
consumers regard as ends in themselves
Q. 4. How can
involvement be used as a
segmentation variable?
Involvement as a Segmentation Variable
 Brand loyalists
those who are highly involved both with the product
category and with particular brands.
 Information seekers
those who are highly involved with a product category
but who do not have a preferred brand.
 Routine brand buyers
those who are not highly involved with the product
category but are involved with a particular brand in that
category.
 Brand switchers
those who are not involved with the product category or
with particular brands.
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Q. 5. Define Satisfaction.
Satisfaction
The mental state of feeling adequately
rewarded in a buying situation.
Judgment of a pleasurable level of
consumption-related fulfillment, including
levels of under fulfillment or over fulfillment.
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Consumer Satisfaction/Dissatisfaction
Consumer dissatisfaction is an attitude
formed toward a product, place, or action.
This attitude is influenced by both the level of
expended effort and by the level of
expectations of the outcome.
Effort is equated with financial, physical, and/or
mental sacrifice.
Satisfaction is equated with feelings of being
adequately or inadequately rewarded for the
sacrifice made.
Marketing Implications of Consumer
Satisfaction or Dissatisfaction
Satisfaction or dissatisfaction is a function of
the discrepancy between obtained versus
expected outcomes.
If expectations are high, but product
performance falls below expectations,
dissatisfaction arises.
Since overstated product claims can
unrealistically raise consumers’ expectation
levels, use of such strategy may be
counterproductive in promotional efforts.
Consumer Complaints
Consumer dissatisfaction is of great
concern to marketers.
It is more cost-effective to keep existing
customers than to win new ones.
A typical dissatisfied customer informs
a number of others about the incident.
It is vital that companies immediately
redress consumer dissatisfaction.
To Whom Do Consumers Complain?
Consumers direct their complaints to a
variety of places including:
The firm’s customer service department
State agencies
The Federal Trade Commission
The mass media
Credit card companies
The Better Business Bureau (BBB)
Q. 6. What are the five
emotional response
modes?
Response Modes
Satisfaction as Contentment
Satisfaction as Pleasure
Satisfaction as Delight
Satisfaction as Relief
Satisfaction as Ambivalence
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Q. 7. What are the
consequences of
satisfaction and
dissatisfaction?
Response Modes
Exit
Voice
Continued Patronage
Twist
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Methods of Redressing Consumer
Complaints
Establishing web-based service centers (or
web-enabled customer contact centers) to
facilitate communication with consumers
Establishing a customer service
department to collect, analyze, and
diligently respond to consumer complaints
Providing consumers with factual and
objective information from credible sources
including blogs, testimonials, and experts