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 longterm 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

Search

Alternative
Evaluation

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 buyers perception of
ideal self
Ideal
Self

Actual
Self

Products that
enhance selfconcept 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:
bis

Importance

ei

Toyota
Sienna

Subaru
Outback

Volvo
Cross Country

Space

Reliability

Safety

Longevity

Handling

Styling

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 products
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)

Toyota
Sienna

Subaru
Outback

Volvo
Cross Country

Space

Reliability

Safety

Longevity

Handling

Styling

15

21

20

bi

Weighted Additive
Importance

Toyota
Sienna

Subaru
Outback

Volvo
Cross Country

Space

4 (20)

2 (10)

4 (20)

Reliability

3 (12)

4 (16)

3 (12)

Safety

3 (12)

3 (12)

4 (16)

Longevity

2 (6)

4 (12)

4 (12)

Handling

1 (3)

4 (12)

2 (6)

Styling

2 (4)

4 (8)

3 (6)

57

70

72

biei

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

Reliability

Safety

Longevity

Handling

Styling

Lexicographic Rule
Importance

Toyota
Sienna

Subaru
Outback

Volvo
Cross Country

Space

Reliability

Safety

Longevity

Handling

Styling

Lexicographic Rule
Importance

Toyota
Sienna

Subaru
Outback

Volvo
Cross Country

Space

Reliability

Safety

Longevity

Handling

Styling

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

Reliability

Safety

Longevity

Handling

Styling

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

Reliability

Safety

Longevity

Handling

Styling

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