Chapter 9: Individual Decision Making

Report
9-1
Chapter 9
Individual
Decision Making
Stages in Consumer Decision
Making
Problem Recognition
Information Search
Evaluation of Alternatives
Product Choice
Outcomes
9-2
Perspectives on Decision Making
9-3
• Consumer researchers have approached decision
makers from a Rational Perspective.
– People integrate information about a product, weigh pluses and
minuses of each alternative, and arrive at a satisfactory
decision.
– This approach does not describe all forms of decision making.
• Behavioral Influence Perspective explores decisions
made under conditions of low involvement.
• Consumers may be highly involved in a decision, but
still the decisions can not wholly be explained
rationally. Experiential Perspective stresses the
Gestalt, or totality, of the product or service.
A Continuum of Buying Decision
Behavior
Habitual Decision
Making
Limited Problem
Solving
9-4
Extensive Problem
Solving
Low-Cost Products
More Expensive
Products
Frequent Purchasing
Infrequent Purchasing
Low Consumer
Involvement
Familiar Product Class
and Brands
Little Thought, Search,
or Time Given to
Purchase
High Consumer
Involvement
Unfamiliar Product
Class and Brands
Extensive Thought,
Search, and Time Given
to Purchase
Problem Recognition
9-5
Problem Recognition Occurs Whenever the Consumer
Sees a Significant Difference Between His or Her
Current State and Some Desired or Ideal State.
Consumer’s Ideal State
Need Recognition
Occurs By:
Running Out of a Product
Inadequate Product
Creating New
Needs
Opportunity Recognition
Occurs By:
Exposure to Different or
Better-Quality Products
Consumer’s Actual State
Information Search
Information Search is the Process in Which the
Consumer Surveys His or Her Environment for
Appropriate Data to Make a Reasonable Decision.
Types of Search
Information Sources
> Prepurchase - an Explicit
Search for Information.
>Ongoing Search - Browsing
Used by Veteran Shoppers for
Up-to-Date Information.
>Internal Search - Memory
Scan to Assemble Information.
>External Search - Information
Obtained from Advertisements,
Friends, or People Watching.
Information Searches
> Deliberate Search is the
Result of Directed Learning.
>Accidental Search is the
Result of Incidental Learning.
9-6
The Economics of Information
9-7
• Economics-of-Information approach assumes
that consumers will gather as much data as is
needed to make an informed decision.
– Implies consumers will continue the search until the
rewards of doing so (utility) exceed the costs.
• Consumers, however, do not always search
rationally.
– Amount of external search for most products is
surprisingly small, even when it would benefit the
consumer. Exception: Symbolic products such as
clothing.
– Consumers often Brand Switch as they seek variety
in their product experiences.
Biases in the Decision-Making
Process
Mental Accounting
Decisions are Influenced by the Way
the Problem is Posed (Framing)
Sunk-Cost Fallacy
Having Paid for Something Makes
Us Reluctant to Waste It.
Loss Aversion
People Place More Emphasis on
Loss Than They Do Gain.
9-8
9-9
Framing - Version X
• You’ve decided to see a Broadway
play and have bought a $60 ticket.
As you enter the theater, you realize
you’ve lost your ticket. You can’t
remember the seat number, so you
can’t prove to the management that
you bought a ticket. Would you
spend $60 for a new ticket?
9-10
Framing - Version Y
• You’ve reserved a seat for a
Broadway play for which the ticket
price is $60. As you enter the theater
to buy your ticket, you discover
you’ve lost $60 from your pocket.
Would you still buy the ticket?
(Assume you have enough cash left
to do so).
The Consumer’s Prior Expertise
Amount of Search
Search Tends to Be Greatest Among Those
Consumers Who Are Moderately Knowledgeable
About the Product.
Product knowledge
9-11
Types of Perceived Risk
9-12
9-13
Evaluation of Alternatives
All
Alternatives
Evoked Set
Inert Set
Inept Set
Actively
Considered
Aware of, But
Would Not Buy
Not Entering
Consideration
Retrieval
Set
Prominent
Products in
Environment
9-14
Levels of Product Categorization
Superordinate Level Includes Abstract Concepts.
Dessert
Fattening
Dessert
Ice Cream
Basic Levels Have Much
More in Common, But a
Number of Alternatives
Exist.
Cake
Pie
Nonfattening
Dessert
Fruit
Subordinate Levels
Includes Individual
Brands.
Diet Ice
Yogurt
Strategic Implications of
Product Categorization
Product Positioning
Conception of the Product Relative to
Other Products in the Consumer’s Mind
Identifying Competitors
Are Different Products Substitutes?
Exemplar Products
Most Known, Accepted Product or Brand
Locating Products
Consumers’ Expectations Regarding the
Places to Locate a Desired Product.
9-15
Product Choice:
9-16
Selecting Among Alternatives
• Evaluative Criteria are the dimensions used to
judge the merits of competing options.
• The attributes actually used to differentiate
among choices are Determinant Attributes.
• Marketers can educate consumers about a new
decision criterion if they communicate to buyers:
– There are significant differences among brands on the
attribute.
– Supply the consumer with a decision-making rule.
– Should convey a rule that can be easily integrated with
how the person has made this decision in the past.
9-17
Heuristics
Heuristics are Mental Rules-of-Thumb That Lead to a
Speedy Decision.
Product
Signal
Country
of Origin
Brand
Loyalty
Retail
Outlets
Market
Beliefs
Common
Heuristics
Brand
Names
Price/ Quality
Relationship
9-18
Heuristics Used By Large Hotel
• Rule of thumb at Washington hotel
• Seven days prior to date accept up to
50 rooms overbooking (on top of 724
rooms available);
• One day prior to date, accept up to 20
rooms being oversold.
9-19
Heuristics by Individuals
• Dump stock if it falls 15% below your
purchase price.
• “If it sounds too good to be true, it
is.”
Choosing Familiar Brand Names:
9-20
Loyalty or Habit?
• Many people buy the same brand every time
due to Inertia, where a brand is bought out of
habit merely because less effort is required.
• Brand Loyalty is a form of repeat purchasing
behavior reflecting a conscious decision to
continue buying the same brand.
– A brand-loyal customer is actively involved with the
product for either emotional or objective reasons.
• Marketers struggle with Brand Parity, which
refers to consumers’ beliefs that there are no
significant differences among brands.
9-21
Decision Rules
Consumers Consider Sets of Product Attributes by
Using Different Decision Rules, Depending on the
Complexity of the Decision and the Importance of
the Decision to Them.
Noncompensatory
Decision Rules
Compensatory
Decision Rules
Lexicographic
Simple Additive
Elimination-By-Aspects
Weighted Additive
Conjunctive

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