Consumer Decision Making I
MKT 750
Dr. West
Agenda
Shopping insights diary assignment
Stages of Decision Making
Three Routes to Decision Making
The Role of Involvement
Shopping Insights Diary
Shopping Insights Diary
Introspective Approach vs DepthInterview
Think through the purchase process
involved in three recent purchases.
You will need to provide a description of
how and why you decided to purchase the
product, as well as offer insights to other
consumers like yourself, and marketers.
Means-End Chain Analysis:
Consumer behavior is both:
Purposeful
We strive to achieve short-term, and
long-term goals
Revealing
Our behavior reflects our values
Trade-offs
Laddering Technique
Values
Consequences
Attributes
I: “Why is it important to you to use a
camcorder that allows for five hours on one
tape and one battery?”
R: “Because I can take it to outside events,
like baseball games.”
I: “Why is that important to you?”
R: “It assures me that I will capture
important moments in my kids lives without
worrying.”
I: “Why is that important to you?”
R: “Being a good parent requires that kids
are left with visual images of their childhood
to enjoy as adults..”
Consumer Decision Making
Consumer-side
Need
Recognition
Search
Alternative
Evaluation
Choice
Post-Purchase
Evaluation
Consumer Decision Making
Consumer-side
Need
Recognition
Alternative
Evaluation
Search
Choice
Post-Purchase
Evaluation
Marketer-side
Awareness
Interest
Desire
Action
Consumer Decision Making
Consumers make a wide variety of
choices that range from life-altering
(the decision to go to grad school,
getting married) to mundane (filling
your car with gasoline).
From Inertia to Passion
Habitual
Problem
Solving
Limited
Problem
Solving
Midrange
Problem
Solving
Inertia
Simple
Extended
Problem
Solving
Passion
Nature of Processing
Elaboration
Nature of the Decision:
First time vs Repeat purchase
Purchase for Self versus Another
Functional products
(e.g. washing machine)
Experiential products
clothing)
(e.g. perfume,
Consumers are “cognitive misers”
Heuristics are used as shortcuts to
decision making
What might some of these be?
12
Rational Decision Making:
Need
Recognition
Search
Alternative
Evaluation
Choice
Post-Purchase
Evaluation
13
Need Recognition
Ideal State
Ideal State
Actual State
No Problem
Ideal State
Actual State
Opportunity
Recognition
Actual State
Problem
Recognition
How are Needs Activated?
Changed circumstances
Graduation, new job, marriage, first baby …
Product acquisition
DVD player, Xbox
Product consumption
Toothpaste, milk, gasoline…
Product innovation
Software
Marketing influence
The Role of Self-Concept
Alter the buyer’s perception of “ideal self”
Ideal
Self
Actual
Self
Products that enhance
“self-concept” reduce
the dissonance between
the ideal and actual
self.
Extended
Self
Possessions and the
Extended Self
James
Bond
Actual
Self
BMW
Z3
How Companies Can
Activate Need Recognition
Instill fear
Gets attention
Memorable
Need to provide
a solution
Rational Decision Making:
Need
Recognition
Search
Alternative
Evaluation
Choice
Post-Purchase
Evaluation
19
Information Search
Information Search
Types of Information
Search Information -- observable prior to
purchase
Experience Information -- can be obtained
from direct experience with the product or
service
Credence Information – product claims that
are not readily observed even post purchase
Information Search
Information Search
Search is usually limited
Surveys indicate that 50% of consumers shop
at a single store for a durable good, only 30%
look at more than one brand of appliance
Highlights why top-of-mind awareness is
crucial
What determines search?
Cost
Effort, time, delay, immediacy of need,
money
The internet can lower search costs
Benefits
Savings, performance, satisfaction,
avoidance of regret, ease of justification
What determines search?
Rational Decision Making:
Need
Recognition
Search
Alternative
Evaluation
Choice
Post-Purchase
Evaluation
26
Evaluation & Choice
Evaluating Alternatives
Determine criteria to be used for
evaluation of products
Assess the relative importance of the
each criteria
Evaluate each alternative based on the
identified criteria
Evaluating Alternatives
Criteria for the purchase of a car:
Space
Reliability
Safety
Longevity
Handling
Styling
Evaluating Alternatives
Assessing Importance: ei
Space
Reliability
Safety
Longevity
Handling
Styling
5
4
4
3
3
2
* Importance: 5=Most Important, 1=Least Important
Evaluating Alternatives
Beliefs Regarding Product Performance:
bi’s
Importance
ei
Toyota
Sienna
Subaru
Outback
Volvo
Cross Country
Space
5
4
2
4
Reliability
4
3
4
3
Safety
4
3
3
4
Longevity
3
2
4
4
Handling
3
1
4
2
Styling
2
2
4
3
Product Evaluation: 4=Excellent, 3=Very Good, 2=Good, 1=Fair
Decision Rules
Cutoffs/Thresholds: restriction or
requirements for acceptable performance
Signals (surrogate indicators) are
product attributes used to infer other
product attributes (e.g. high price often
infers higher quality)
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
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
Simple Additive (Equal Weight)
b i
Toyota
Sienna
Subaru
Outback
Volvo
Cross Country
Space
4
2
4
Reliability
3
4
3
Safety
3
3
4
Longevity
2
4
4
Handling
1
4
2
Styling
2
4
3
15
21
20
Weighted Additive
biei
Importance
Toyota
Sienna
Subaru
Outback
Volvo
Cross Country
Space
5
4 (20)
2 (10)
4 (20)
Reliability
4
3 (12)
4 (16)
3 (12)
Safety
4
3 (12)
3 (12)
4 (16)
Longevity
3
2 (6)
4 (12)
4 (12)
Handling
3
1 (3)
4 (12)
2 (6)
Styling
2
2 (4)
4 (8)
3 (6)
57
70
72
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
Lexicographic Rule
Importance
Toyota
Sienna
Subaru
Outback
Volvo
Cross Country
Space
5
4
2
4
Reliability
4
3
4
3
Safety
4
3
3
4
Longevity
3
2
4
4
Handling
3
1
4
2
Styling
2
2
4
3
Lexicographic Rule
Importance
Toyota
Sienna
Subaru
Outback
Volvo
Cross Country
Space
5
4
2
4
Reliability
4
3
4
3
Safety
4
3
3
4
Longevity
3
2
4
4
Handling
3
1
4
2
Styling
2
2
4
3
Lexicographic Rule
Importance
Toyota
Sienna
Subaru
Outback
Volvo
Cross Country
Space
5
4
2
4
Reliability
4
3
4
3
Safety
4
3
3
4
Longevity
3
2
4
4
Handling
3
1
4
2
Styling
2
2
4
3
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.
Elimination by Aspects Rule
Cutoff = 3
Importance
Toyota
Sienna
Subaru
Outback
Volvo
Cross Country
Space
5
4
2
4
Reliability
4
3
4
3
Safety
4
3
3
4
Longevity
3
2
4
4
Handling
3
1
4
2
Styling
2
2
4
3
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.
Conjunctive Rule
Cutoff = 2
Toyota
Sienna
Subaru
Outback
Volvo
Cross Country
Space
3
2
4
Reliability
3
4
3
Safety
3
3
4
Longevity
2
4
4
Handling
1
4
2
Styling
2
4
3
Very sensitive to order
Assignment
Reading:
Chapters 17 - 18 (pp 604 - 616, 626 - 629,
637 - 651)
Topic:
Consumer Decision Making II
Assignment:
Write-up your Shopping Insights for next
Wednesday.
Find a team of up to six class members