Chapter 16
Consumer Decision Making
Table 16.1 Types of Purchase or
Consumption Decisions
DECISION
CATEGORY
ALTERNATIVE A
ALERNATIVE B
Basic purchase or
consumption
decision
To purchase or consume Not to purchase or
a product (or service)
consume a product (or
service)
Brand purchase or
consumption
decision
To purchase or consume To purchase or consumer
a specific brand
another brand
To purchase or consume To purchase or consume
one’s usual brand
another established product
To purchase or consume To purchase or consume a
a basic model
luxury or status model
©2000 Prentice Hall
Table 16.1 continued
DECISION
CATEGORY
Brand purchase or
consumption
decision
ALTERNATIVE A
ALERNATIVE B
To purchase or consume To purchase or consumer
a new brand
one’s usual brand or some
other established brand
To purchase or consume To purchase or consume
a standard quantity
more or less than a
standard quantity
To purchase or consume
an on-sale brand
To purchase or consume
a national brand
To purchase or consume a
nonsale brand
To purchase or consume a
store brand
©2000 Prentice Hall
Table 16.1 continued
DECISION
CATEGORY
Channel purchase
decisions
Payment purchase
decisions
ALTERNATIVE A
ALERNATIVE B
To purchase from a
specific type of store
To purchase from some
other type of store
To purchase from one’s
usual store
To purchase from some
other store
To purchase in-home
To purchase from a
local store
To pay for the purchase
with cash
To purchase in-store
merchandise
To purchase from a store
requiring some travel
To pay for the purchase
with a credit card
To pay the bill in full
when it arrives
To pay for the purchase in
installments
©2000 Prentice Hall
Levels of Consumer Decision Making
Extensive Problem
Solving
Limited Problem
Solving
Routinized
Response Behavior
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Extensive
Problem
Solving
A search by the consumer to
establish the necessary
product criteria to evaluate
knowledgeably the most
suitable product to fulfill a
need.
©2000 Prentice Hall
Limited
Problem
Solving
A limited search by a
consumer for a product that
will satisfy his or her basic
criteria from among a
selected group of brands.
©2000 Prentice Hall
Routinized
Response
Behavior
A habitual purchase response
based on predetermined
criteria.
©2000 Prentice Hall
Models of Consumers: Four Views of
Consumer Decision Making
•
•
•
•
An Economic View
A Passive View
A Cognitive View
An Emotional View
©2000 Prentice Hall
Rational Customers Have To …
• Be aware of all available
product alternatives
• Be capable of correctly
ranking each alternative in
terms of its benefits and
disadvantages
• Be able to identify the one
best alternative
©2000 Prentice Hall
Why is the Classical Economic Model
Considered Unrealistic?
• People are limited by their
existing skills, habits, and
reflexes
• People are limited by their
existing values and goals
• People are limited by the
extent of their knowledge
©2000 Prentice Hall
Information
Overload
A situation in which the
consumer is presented with
too much product- or brandrelated information.
©2000 Prentice Hall
A Model of Consumer Decision Making
INPUT
PROCESS
OUTPUT
©2000 Prentice Hall
Figure 16.2 A Simple Model of Consumer Decision Making
External Influences
Input
Firm’s Marketing Efforts
1. Product
2. Promotion
3. Price
4. Channels of distribution
Sociocultural Environment
1. Family
2. Informal sources
3. Other noncommercial sources
4. Social class
5. Subculture and culture
Consumer Decision Making
Need Recognition
Process
Prepurchase Search
Evaluation of Alternatives
Psychological Field
1. Motivation
2. Perception
3. Learning
4. Personality
5. Attitudes
Experience
Postdecision Behavior
Output
Purchase
1. Trial
2. Repeat purchase
Postpurchase Evaluation
©2000 Prentice Hall
Need
Recognition
The realization by the
consumer that there is a
difference between “what is”
and “what should be.”
©2000 Prentice Hall
Prepurchase
Search
A stage in the consumer
decision-making process in
which the consumer
perceives a need and actively
seeks out information
concerning products that will
help satisfy that need.
©2000 Prentice Hall
Evaluation of
Alternatives
A stage in the consumer
decision-making process in
which the consumer
appraises the benefits to be
derived from each of the
product alternatives being
considered.
©2000 Prentice Hall
Table 16.2 Factors that are Likely to
Increase Prepurchase Search
Product Factors
Long interpurchase time (a long-lasting or
infrequently used product)
Frequent changes in product styling
Volume purchasing (large number of units)
High price
Many alternative brands
Much variation in features
©2000 Prentice Hall
Table 16.2 continued
Experience
First-time purchase
No past experience because the product is new
Unsatisfactory past experience within the product category
Social Acceptability
The purchase is for a gift
The product is socially visible
Value-Related Considerations
Purchase is discretionary rather than necessary
Al alternatives have both desirable and undesirable consequences
Family members disagree on product requirements or evaluation of
alternatives
Product usage deviates from important reference group
The purchase involves ecological considerations
Many sources of conflicting information
©2000 Prentice Hall
Table 16.2 continued
Product Factors
Demographic Characteristics of Consumer
Well-educated
High-income
White-collar occupation
Under 35 years of age
Personality
Low dogmatic
Low-risk perceiver (broad categorizer)
Other personal factors, such as high product involvement and
enjoyment of shopping and search
©2000 Prentice Hall
Table 16.3 Alternative Prepurchse
Information Sources for a Home Security
System
PERSONAL
IMPERSONAL
Friends
Neighbors
Relatives
Coworkers
Security system salespeople
Calling the security alarm
company
Newspaper articles
Magazine articles
Consumer Reports
Direct-mail brochures
Information from product
advertisements
Internal web-site
©2000 Prentice Hall
Issues in Alternative Evaluation
•
•
•
•
•
Evoked Set
Criteria Used for Evaluating Brands
Consumer Decision Rules
Lifestyles as a Consumer Decision Strategy
Incomplete Information and Noncomparable
Alternatives
• Series of Decisions
• Decision Rules and Marketing Strategy
• Consumption Vision
©2000 Prentice Hall
Figure 16.3 The Evoked Set as a Subset
of All Brands in a Product Class
All
Brands
Known
Brands
Unknown
Brands
Evoked Set
Acceptable
Brands
Inept Set
Unacceptable
Brands
(2)
Purchased
Brands
(1)
Inert Set
Indifferent
Brands
(3)
Overlooked
Brands
(4)
Not Purchased
Brands
(5)
©2000 Prentice Hall
Evoked Set
The specific brands a
consumer considers in
making a purchase choice in
a particular product category.
©2000 Prentice Hall
Inept Set
Brands that a consumer
excludes from purchase
consideration.
©2000 Prentice Hall
Inert Set
Brands that a consumer is
indifferent towards because
they are perceived as having
no particular advantage.
©2000 Prentice Hall
Table 16.4 Possible Product Attributes
Used as Purchase Criteria for Nine Product
Categories
PERSONAL COMPUTERS
Processing speed
Price
Type of display
Hard-disk size
Amount of memory
Laptop or desktop
CD PLAYER
Mega bass
Electronic shock protection
Length of play on batteries
Random play feature
Water resistance
Size of dial
WRISTWATCHES
Watchband
Alarm feature
Price
Water-resistant
Quartz movement
VCRs
Ease of programming
Number of heads
Number of tape speeds
Sow-motion feature
Automatic tracking
©2000 Prentice Hall
Table 16.4 continued
COLOR TVs
Picture quality
Length of warranty
Cable-ready
Price
Size of screen
FROZEN DINNERS
Taste
Type of main course
Type of side dishes
Price
Preparation requirements
35-MM CAMERAS
Autofocus
Built-in flash
Automatic film loading
Lens type
Size and weight
FOUNTAIN PENS
Balance
Price
Gold nib
Smoothness
Ink reserve
COLOR INKJET PRINTER
Output speed
Number of ink colors
Resolution (DPI)
Length of warranty
USB capability
©2000 Prentice Hall
Table 16.5 Comparison of Selected
Characteristics of Home Security Systems
FEATURE
ST. LOUIS ALARM
SYSTEM
$99
$19.95
CLAYTON SECURITY
SERVICES
$1950
$19.95
MISSOURI
BUGLARY
$999
$19.95
Number of
entry doors
protected
1
3
2
Number of
keypads
included
1
3
2
System Price
Monthly
monitoring
fee
©2000 Prentice Hall
Need to check about the price of additional keypads
Table 16.5 continued
FEATURE
Price for each
additional
keypad
Number of
included
smoke
detectors
wired to
system
How home is
protected
ST. LOUIS ALARM
SYSTEM
($75)
CLAYTON SECURITY
SERVICES
($90)
MISSOURI
BUGLARY
(no more
needed)
0 ($100 each, if desired) 3
0
2 motion detectors plus
contact on front door
2 motion
detectors
plus contacts
on all outer
doors
2 motion detectors plus
contacts on all windows
and outer doors
©2000 Prentice Hall
Consumer Decision Rules
• Compensatory
• Noncompensatory
– Conjunctive Decision Rule
– Disjunctive Decision Rule
– Lexicographic Rule
©2000 Prentice Hall
Compensatory
Decision Rules
A type of decision rule in
which a consumer evaluates
each brand in terms of each
relevant attribute and then
selects the brand with the
highest weighted score.
©2000 Prentice Hall
Table 16.6 Hypothetical Ratings for Security Systems
FEATURE
System Price
Monthly
monitoring fee
ST. LOUIS
CLAYTON SECURITY MISSOURI
ALARM SYSTEM SERVICES
BUGLARY
10
1
5
4
6
5
1
10
5
3
10
6
3
10
6
Number of included
smoke detectors
wired to system
3
2
1
How home is
protected
2
10
6
27
56
34
Number of entry
doors protected
Number of keypads
included
Price for each
additional keypad
©2000 Prentice Hall
Noncompensatory
Decision
Rules
A type of consumer decision
rule by which positive
evaluation of a brand
attribute does not
compensate for a negative
evaluation of the same brand
on some other attribute.
©2000 Prentice Hall
Conjunctive
Decision Rule
A noncompensatory decision
rule in which consumers
establish a minimally
acceptable cutoff point for
each attribute evaluated.
Brands that fall below the
cutoff point on any one
attribute are eliminated from
further consideration.
©2000 Prentice Hall
Disjunctive
Rule
A noncompensatory decision
rule in which consumers
establish a minimally
acceptable cutoff point for
each relevant product
attribute; any brand meeting
or surpassing the cutoff point
for any one attribute is
considered an acceptable
choice.
©2000 Prentice Hall
Lexicographic
Rule
A noncompensatory decision
rule in which consumers first
rank product attributes in
terms of their importance,
then compare brands in
terms of the attribute
considered most important.
If one brand scores higher
than the other brands, it is
selected; if not, the process
is continued with the second
ranked attribute, and so on.
©2000 Prentice Hall
Affect
Referral
Decision Rule
A simplified decision rule by
which consumers make a
product choice on the basis
of their previously
established overall ratings of
the brands considered, rather
than on specific attributes.
©2000 Prentice Hall
Table 16.7 Hypothetical Use of Popular
Decision Rules in Making a Decision to
Purchase a Home Security System
DECISION RULE MENTAL STATEMENT
Compensatory rule “We selected the security system that came out
best when we balanced the good ratings against
the bad ratings.”
Conjunctive rule
“We picked the security system that had no bad
features.”
Disjunctive rule
“We selected the security system that excelled in at
least one attribute.”
Lexicographic rule
“We looked at the feature that was most important
to us and chose the security system that ranked
highest on that attribute.”
Affect referral rule
“Everything they do is outstanding, so we decided
to have them install our security system.”
©2000 Prentice Hall
Types of Purchases
Trial
Purchases
Repeat
Purchases
Long-Term
Commitmen
t Purchases
©2000 Prentice Hall
Postpurchase
Evaluation
An assessment of a product
based on actual trial after
purchase.
©2000 Prentice Hall
Outcomes of Postpurchase Evaluation
• Actual Performance Matches Expectations
– Neutral Feeling
• Actual Performance Exceeds Expectations
– Positive Disconfirmation of Expectations
• Performance is Below Expectations
– Negative Disconfirmation of Expectations
©2000 Prentice Hall
Table 16.8 Five Giver-Receiver Gifting
Subdivisions
GIVERS
INDIVIDUAL
GROUP
INDIVIDUAL
RECEIVES
“OTHER”
GROUP
SELF*
Interpersonal
gifting
Intercategory
gifting
Intercategory
gifting
Intergroup
gifting
Intrapersonal
gifting
Intragroup
gifting
*This “SELF” is either singular self (“me”) or plural (“us”).
©2000 Prentice Hall
Table 16.9 Major Differences Between
Gift-Giving Behavior or Anglo-Celtic,
Sino-Vietnamese, and Israeli Mothers
GIFT-GIVING
ELEMENTS:
ANGLOCELTIC
SINOVIETNAMESE
1. MOTIVATION
Justification
Short-term goals
Long-term goals
Long-term/shortterm goals
Significance
Prestige gifts
Birthday gifts
Practical gifts
Lucky Money
Importance to
recipient
Timing
Special occasions, Chinese New
e.g. birthdays,
Year and
Christmas
academic reward
ISRAELI
Birthdays and
general needs
©2000 Prentice Hall
Table 16.9 continued
GIFT-GIVING
ELEMENTS:
ANGLOCELTIC
SINOVIETNAMESE
High Priority
Social and
psychological
risks
Children
Low Priority
Financial Risks
Low Priority
Mother
Mother dominant
with younger
children and
influenced by
older children
Promotional
Influences
Status Symbols
Sale Items
Sale Items
Gift Attributes
Quality
Money unsuitable
Price
Money suitable
Price
Money suitable
2. SELECTION
Involvement
Family Influences
ISRAELI
©2000 Prentice Hall
Table 16.9 continued
GIFT-GIVING
ELEMENTS:
ANGLOCELTIC
3. PRESENTATION
Presentation
Immediate selfMessages
gratification
SINOVIETNAMESE
ISRAELI
Delayed selfgratification
Immediate selfgratification
Single gifts
Allocation
Messages
Multiple gifts
Mothers favored
Understanding of
Messages
Always
Single gifts
Eldest child
favored
Not always
Achievement
Often
Most of the time
Never
Feedback
More expensive
Less expensive
Least expensive
Usage
Often private
Often shared
Never shared
Never
4. REACTION
©2000 Prentice Hall
Table 16.10 Reported Circumstances
and Motivations for Self-Gift Behavior
CIRCUMSTANCES
MOTIVATIONS
Personal accomplishment
Feeling down
Holiday
Feeling stressed
Have some extra money
Need
Had not bought for self in awhile
Attainment of a desired goal
Others
To reward oneself
To be nice to oneself
To cheer up oneself
To fulfill a need
To celebrate
To relieve stress
To maintain a good feeling
To provide an incentive toward a goal
Others
©2000 Prentice Hall
Table 16.11 Gifting Relationship
Categories: Definitions and Examples
GIFTING
RELATIONSHIP DEFINITION
EXAMPLE
Intergroup
A group giving a gift to
another group
A Christmas gift from one
family to another family
Intercategory
An individual giving a gift to
a group or a group giving a
gift to an individual
A group of friends chips in
to buy a new mother a
baby gift
Intragroup
A group giving a gift to itself
or its members
A family buys a VCR for
itself as a Christmas gift
Interpersonal
An individual giving a gift to
another individual
Valentine’s Day chocolates
presented from a boyfriend
to a girlfriend
Intrapersonal
Self-gift
A woman buys herself
jewelry to cheer herself up
©2000 Prentice Hall
Figure 16.5 A Simple Model of Consumption
Choice or Purchase Decision
Input
Consumption Set
Added to one’s assortment or portfolio
Consuming Style
How the individual fulfills his or her
consumption requirements
Process of
Consuming
and
Possessing
Output
Consuming and Possessing Things and Experiences
Using, Possessing, Collecting, Disposing
Feelings, Moods, Attitudes, Behavior
Altered consumer satisfaction, change in lifestyle and/or
quality of life, learning and knowledge, expressing and
entertaining oneself
©2000 Prentice Hall
Relationship
Marketing
Marketing aimed at creating
strong, lasting relationships
with a core group of
customers by making them
feel good about the company
and by giving them some
kind of personal connection
with the business.
©2000 Prentice Hall
Table 16.12 Examples of Relationship
Marketing Techniques
COMPANY
PROGRAM TYPE AND
MEMBERSHIP
CRITERIA
BENEFITS
AT&T
“True Rewards” points
earned for dollars spent on
long distance calling (no fee
to join)
American
Express
Platinum Card Program “By Invitations to special cultural,
invitation only” offered to the culinary, and artistic events based
top 1 percent of AmEx
on member’s personal profile
cardholders (fee to join)
Points may be redeemed for free
minutes, frequent flyer miles, and
other rewards. Toll-free number for
member questions, quarterly point
statement, and informational
mailings.
©2000 Prentice Hall
Table 16.12 continued
COMPANY
PROGRAM TYPE AND
MEMBERSHIP
CRITERIA
Road Runner “Run America Club” (fee to
Sports
join)
World Yacht
“World Yacht club” “flags”
earned each time a member
dines aboard World Yacht
BENEFITS
Discounts on merchandise and
“shoe analysis program,” quarterly
newsletter “Running Shorts,” free
shipping upgrades, and travel and
car rental discounts.
“Flags” redeemed for awards such
as free brunch, caviar, champagne,
and discounts on dinner cruises.
Five “flags” earn VIP status for
preferred seating and additional
discounts.
©2000 Prentice Hall
Table 16.12 continued
COMPANY
PROGRAM TYPE AND
MEMBERSHIP
CRITERIA
Neiman
Marcus
“InCircle” point system
(minimum purchases of
$3,000 per year to join)
Pacific Bell
“California Gold” points
earned for dollars spent
BENEFITS
Quarterly newsletter, travel
discounts, credit card registration,
perfume, magazine subscriptions,
special offer mailings, and
dedicated toll-free telephone
number.
Newsletter, toll-free customer
service number, and third-party
discounts.
©2000 Prentice Hall
Table 16.13 A Broad-based Relationship
Program
AIRLINES
Canadian Airlines International
Cathay Pacific Airlines
Hawaiian Airlines
Qantas Airways
Keno Air
Singapore Airlines
TWA
US Airways
HOTELS
Conrad Hotels
Forte Hotels
Forum Hotels
Hilton Hotels & Resorts
Hilton International Hotels
Holiday Inns
Inter-Continental Hotels
HOTELS continued
ITT Sheraton Hotels, Inns, Resorts &
All-Suites
Marriott Hotels, Resorts and Suites
Vista Hotels
Wyndham Hotels & Resorts
CAR RENTAL
Avis Rent a Car
Hertz
OTHER
Citibank AAdvantage Visa or
Master-Card application
MCI Long-Distance
American AAdvantage Money
Market Fund
The American Traveler Catalog
©2000 Prentice Hall
Figure 16.7 A Portrayal of the
Characteristics of Relationship
Marketing
The Firm provides
The Customer provides
•Products/Services
•Individualized attention
•Continuous information
•Price offers
•Customer services
•Extras and perks, etc.
•Repeat Purchase
•Increased Loyalty
•Goodwill
•Positive word-of-mouth
•Lower costs for the firm
Trust and
promises
©2000 Prentice Hall