CONSUMER DECISION MAKING

The decision process Effects of involvement Types of decision strategies

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DECISION MAKING

Lars Perner, Instructor 1

CONSUMER DECISIONS:
Theory and Reality in Consumer Buying

Problem Recognition

Information Search

Evaluation of Alternatives Purchase Postpurchase Evaluation/ Behaviors

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Theory Complications
Lars Perner, Instructor 2

DECISION MAKING

Types of Decisions and Involvement

Nominal

Brand loyal decisions Repeat purchases

Limited decision making Extended decision making

MKTG 371

DECISION MAKING

Lars Perner, Instructor 3

Problem Types

Presence

Active Inactive Acknowledged Unacknowledged/ denied Generic Selective

Acceptance

Specificity

Me? Anger control problem? What do you mean?

MKTG 371

DECISION MAKING

Lars Perner, Instructor 4

Categories of Alternatives

Awareness set Consideration set (evoked set) Inept set Inert set
Inept set Evoked set

All alternatives

Inert set

Awareness set

MKTG 371

DECISION MAKING

Lars Perner, Instructor 5

Discovering Consumer Problems

Activity analysis Product analysis Problem analysis Human factors research Emotion research

MKTG 371

DECISION MAKING

Lars Perner, Instructor 6

Approaches to Search for Problem Solutions

INTERNAL
Memory Thinking

EXTERNAL
Word of mouth, media, store visits, trial
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CATALOG

DECISION MAKING

Lars Perner, Instructor 7

Issues in Decision Making

Compensatory vs. noncompensatory--can an exceptionally good rating on one attribute outweigh a bad one elsewhere? Brand vs. attribute based processing

MKTG 371

DECISION MAKING

Lars Perner, Instructor 8

Some Influences on Decisions

Temporal

Time pressure Situation

Task definition and expectations Mood

MKTG 371

DECISION MAKING

Lars Perner, Instructor 9

Cost vs. Benefits of Search

Market Characteristics Product Characteristics Consumer Characteristics Situation Characteristics

MKTG 371

DECISION MAKING

Lars Perner, Instructor 10

Consumer Judgments

Heuristics

Availability Representativeness Simulation

MKTG 371

DECISION MAKING

Lars Perner, Instructor 11

Economic Models

Expected utility Utility functions Prospect Theory

Asymmetry for gains and losses Framing

MKTG 371

DECISION MAKING

Lars Perner, Instructor 12

Other Models

Satisficing Cognitive

Affective Simple strategies

Compensatory vs. non-compensatory

Brand loyalty, brand familiarity Country of origin Price related Minimizing regret

MKTG 371

DECISION MAKING

Lars Perner, Instructor 13

Positioning Products as Problem Solutions

Category vs. brand promotion Activating problems

Influencing desired state Promotion of magnitude of discrepancy

Getting consumers to anticipate problems before neede.g.,

Insurance Emergency supplies Unexpected events

DECISION MAKING
Lars Perner, Instructor 14

MKTG 371

Marketing Strategies Based on Decision Making

Maintenance Disrupt Capture Intercept Preference Acceptance

MKTG 371

DECISION MAKING

Lars Perner, Instructor 15

Variety Seeking and Impulse Buying

Variety seeking
need varies among consumers by optimal stimulation level (OSL) Use innovativeness

Dont give me that same old cola, that same old cola-I want a rocknroller!
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Impulse purchases
Motivation Consequences

DECISION MAKING

Lars Perner, Instructor 16

Household Decision Making

Roles/influence

Information gatherers/holders Influencers Decision makers Purchasers Users

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DECISION MAKING

Lars Perner, Instructor 17

Household Decision Making

Roles/influence

Information gatherers/holders Influencers Decision makers Purchasers Users

Strategies of Influence

Constructive

Bargaining Reasoning (sincere) Impression management Authority Emotion Information gathering

Manipulative

Values--desired end states

DECISION MAKING

Borderline

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Lars Perner, Instructor 18