Consumer Decision Process

Your book covers six aspects of the extended consumer decision process

 Situations
 Problem Recognition
 Information Search
 Alternative Evaluation and Selection
 Outlet Selection and Purchase
 Post purchase Processes

However, extended decision-making occurs only in those relatively rare situations when the consumer is
highly involved in the purchase. Lower levels of purchase involvement produce limited or nominal
decision-making, and the first chapter (on situations) describes the various types of decisions and their
relationship to involvement.

Situational Influence

Situational influence is defined as all those factors particular to a time and place that do not follow from
a knowledge of personal (the relatively stable or permanent attributes of the individual) and stimulus
attributes (the characteristics of the stimulus object), and that have a demonstrable and systematic effect
on current behavior. In effect, it is like our POS, where the focus is on the context of the decision
situation.

Note that transient characteristics of the individual such as mood, time pressure, and emotion are a part of
the situation rather than a part of the individual. Also note that the situation may include consumption
rituals (weddings, birthdays, parties) that I referred to when we were talking about consumption
subcultures and reference group influence.

As you can see in Figure 13-1, this chapter talks about situations, situation characteristics, and marketing
activity (the three boxes on the left). Individual characteristics we have already talked about, and
consumption responses are the next few chapters.

The consumer finds themselves in four situations – the communications situation where they receive
information, the purchase situation, use of the product, and ultimately disposal. The question I have is
what can we, as marketers, do about these situations? We have no control, so we must anticipate
situations and facilitate the consumers’ inclination to purchase our product.
Communications situation – Are we alone or with others, in a good mood or bad, in a hurry or
have lots of time? All of these affect the degree to which we see and listen to marketing
communications.
Purchase situation – Are the kids along, are friends with you, what is your mood?
Usage situation – When and how is the product used? How can we expand the usage situations to
increase the demand for our product? Can we change the product in ways that will expand
usage?
Disposition situation – As marketers, we have only recently begun to consider disposal a part of
our domain of influence. It is important not only in product design but also in package design
 (remember the focus group video where one lady was particularly concerned about packaging).
This is an important environmental issue.

Figure 13-1 – The situation interacts with marketing activity and the individual to determine behavior.

There are five key characteristics of situations that help determine the situation’s impact on behavior –
physical features, social surroundings, time perspective, task objectives, and antecedent states.

Physical features – Your book’s discussion of physical features focuses on the retail environment,
which is the purchase situation (but you should also consider physical features of the
communications, use, and disposal situations). The sum of all the physical features of a retail
environment is called atmospherics (or servicescape when describing a service business such as
a hospital, bank, or restaurant). Atmospherics includes décor, colors (think about when you might
use hot colors such as red, and cool colors such as blue), aromas (department stores spray scents
into the store), background music (what is the impact of fast versus slow music in a restaurant or

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 bar), lighting (bright or subdued), and the configuration of merchandise displays. These elements
are under the control of the retailer.

Social surroundings – Your book’s discussion of social surroundings focuses on the consumption
process (but you should also consider the impact of social surroundings on the other three
situations). Depending on your heritage, you will prefer different types of food in situations
where business associates are present versus a visit by your parents. You wear different clothes in
different situations. Some activities involve social situations. Sometimes shopping is a social
experience. Social influence is a significant force acting on our behavior.

Temporal perspective – Time pressure has its most significant impact on the purchase situation. If
you’re under pressure, you will spend less time in information search, use less information,
evaluate fewer alternatives, and make quicker decisions. Time pressure increases brand loyalty.
People will shop in fewer stores. People look for time convenience. They want high quality
products that are fast and easy to use.

Task definition – Are people buying for personal use or for a gift? The nature of gifts varies by
occasion. Wedding gifts tend to be utilitarian (durability, usefulness, need, and performance)
while birthday gifts tend to be fun (enjoyable, unique, durable, performance). Also, the
relationship between the individuals has an impact on the nature of the gift (personal items for
closer friends). Gifts generally have an implied value, image, and functionality that imply the
giver’s impression of the image and personality of the receiver. Gift giving produces anxiety
because of this symbolic meaning.

Antecedent states – These are features of the individual such as momentary moods or conditions.
Moods are transient feeling states that are generally not tied to a specific event or object.
Consumers actively manage their moods, and often seek situations, activities, or objects that will
alleviate negative moods or enhance positive ones. The purchase of products and services is one
way consumers manage their mood states. Momentary conditions reflect temporary states of
being such as being tired, being ill, having extra money, being broke, etc. (note that moods were
states of mind, while momentary conditions are states of being).

Your book does talk about ritual situations that are a set of interrelated behaviors that occur in a
structured format, that have symbolic meaning, and that occur in response to socially defined occasions .
By now you should realize that I think many behaviors are built around ritual situations, consumption
rituals, social situations, group influence, consumption subcultures, scripts (from the chapter on memory),
and related concepts.

So, what’s the marketing impact? Individuals don’t encounter situations randomly, but create many of
the situations they face. Marketers can develop products, advertising, and segmentation strategies based
on the situations that individuals selecting various lifestyles are likely to encounter. Your book talks about
a 5-step approach for developing situation-based marketing strategies.
1. Use observational studies and focus groups to discover usage situations that influence the
consumption of the product.
2. Survey a large sample of consumers to better understand and quantify how the product is used
and the benefits sought in the usage situation by each market segment.
3. Construct a person-situation segmentation matrix. Each cell contains the key benefits sought
(Table 13-2 illustrates this for suntan lotion).
4. Evaluate each cell in terms of potential sales, price, cost to serve, competitor strength, etc.

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 5. Develop and implement a marketing strategy for those cells that offer sufficient profit potential.

Table 13-2 – Person-Situation segments for suntan lotions.

Note that there are four usage situations (beach/boat, etc.) and four segment groups (young children, etc.).
Also note that the last column lists the product features/benefits associated with each usage situation, and
the last row lists the features/benefits sought by each market segment. This is a great exercise to try with
other products – who are the potential markets, under what situations do they use the product, what
benefits are they looking for, and what benefits can the product provide in each situation?

Problem Recognition

While the term consumer decision implies an individual carefully evaluating the attributes of a set of
products and rationally selecting the one that solves a clearly recognized need for the least cost, many
consumer decision focus not on brand attributes but rather the feelings or emotions associated with
acquiring and/or using the brand, or with the environment in which the product is purchased and/or used.
These are referred to as attribute-based, emotion-based, and environment-based decisions.

This chapter deals with how the consumer recognizes and reacts to a problem, and much of this revolves
around the level of purchase involvement which is the level of concern for, or interest in, the purchase
process triggered by the need to consider a particular purchase. Purchase involvement is a temporary
state, and is influenced by the interaction of the individual, the product, and the situational characteristics

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(wow . . . POS . . . what a surprise). Note that purchase involvement is not the same as product
involvement or enduring involvement, a topic we covered when talking about opinion leadership. For
example, I have a great deal of product involvement in computer equipment and accessories, but I
generally have little purchase involvement because of my biases (which we could call brand loyalty
and/or store loyalty).

There are three broad levels of decision making, depending on involvement – nominal, limited, and
extended. As you can imagine, nominal decision making is where there is little purchase involvement,
and there really isn’t any decision to make, you just buy the product/brand. I do like to point out that there
are two quite different extremes that explain nominal decision making.
Complete brand loyalty – at one point you may have considered a number of brands, but you
settled on the one you like and you always purchase it. You are brand loyal, and it would be
difficult for a competitor to change your mind.
Complete brand indifference – you may believe that all brands are about the same, so you will
pick up whatever is available with having to think about it.

Limited decision making involves internal and limited external search, few alternatives, simple decision
rules on a few attributes, and little postpurchase evaluation. You put a little work into the decision, but
not too much. Note that most information used in the decision is internal, from your memory, and you
spend little time searching for more information, and little time in the decision making process.

As you could guess, extended decision making involves an extensive internal and external information
search followed by a complex evaluation of multiple alternatives.

Problem recognition is the result of a discrepancy between a desired state and an actual state that is
sufficient to arouse and activate the decision process. Of course, you should recognize that it is not really
the consumer’s actual state that is important, but their perception of their actual state (people don’t always
deal in reality, and it is perceptions that count in marketing . . . perception is everything). The desired
state is driven by the desired life style. But to some extent, the current actual state is also driven by the
desired life style since it has driven past decisions. In other words, it is desired life style that got you
where you are (subject to resource constraints), and desired life style that is driving your current decisions
and actions.

There may be a discrepancy or gap between desired and actual states, but two factors affect whether an
individual will resolve that discrepancy: (1) the magnitude of the discrepancy, and (2) the relative
importance of the problem. Think about situations in your life where there is a large discrepancy between
desired and actual states, but it’s no big deal (at least at the moment), or situations where there is a small
discrepancy but it is really important to you. How do you react and how hard to you work to solve the
problem?

From a marketing perspective, you want to activate problem recognition and show how your product
solves the problem. So, you can change the desired state (promote your product’s benefits), change the
perceived actual state (is your coffee really good tasting), or change the importance (having a quality
automobile tire is the most important thing you can do to protect your family).

As you can imagine, virtually everything we have talked about affects both desired and actual states.
Culture, subculture, social status, reference groups, household characteristics, financial status, financial
expectations, previous decisions, individual development, emotions, motives, situation, normal depletion,
product/brand performance, government, consumer groups, availability of products . . .

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Think back to Table 13-2 above. How would you identify the problems people have. Surveys and focus
groups tend to take one of three approaches to problem identification.
Activity analysis – focus on a particular consumer activity, such as preparing a meal, mowing the
lawn, or hair care. Try to find out what problems people have when performing this activity.
Product analysis – focus on the purchase or use of a particular product, such as using a computer,
caring for the car, or using the refrigerator.
Problem analysis – this starts with a list of problems and asks the consumer to identify which
activities, products, or brands are associated with these problems.

In all cases you’re trying to understand the consumer, their daily activities, their problems, their needs . . .
and trying to learn how your product can make a positive contribution to people’s lives. That sounds like
a lofty goal, but if you can accomplish it, you will be successful.

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Information Search

Many, perhaps most, consumer problems are resolved by the consumer using only previously stored
information (and we discussed that much of that information comes from just living and being exposed to
stimuli . . . much of that coming from conditioning and iconic rote learning, none of which require any
significant amount of thinking). This is the source of information for internal search.

External search looks to sources such as

The opinions, attitudes, behaviors, and feelings of friends, neighbors, relatives, and increasingly,
strangers contacted on the internet.
Professional information that is provided in pamphlets, articles, books, the internet, and personal
contacts.
Direct experiences with the product through inspection, trial, or observation.
Marketer generated information presented in advertisements, web sites, displays, and by sales
personnel.

Of course, deliberate external search can take place without their being a problem to solve. We talked
about those with enduring involvement with a product category. These people are always collecting and
evaluating information about product categories and brands.

What kind of information does someone search for? They look for appropriate evaluative criteria,
existence of alternatives, and the ratings of each alternative on the evaluative criteria.
The appropriate evaluative criteria for the solution of a problem – Suppose you wanted to buy a
new computer, but were unsure of what features would meet your needs. You need information
about the appropriate evaluative criteria, and you would probably find this by talking with
friends, experts, and reading articles about computers. You might even look at marketing
brochures, and search the internet.
The existence of various alternative solutions – If, in the computer example, you didn’t know
much about the what was available and where computers could be purchased, you would get
information about both brands and stores.
The performance level of each alternative solution on each evaluative criterion – The potential
brands and stores would be compared on each of the evaluative criteria. A later chapter talks
about how you take all of this comparative information and finally make a decision.

How much external information search really takes place? Not a whole lot. Surveys of shopping behavior
have shown a significant percent of all durable purchases are made after visiting only one store. The
number of alternatives considered also shows a limited amount of prepurchase search. While the number
of alternative brands and/or models considered tends to increase as the price of the product increases, for
some product categories, such as watches, almost half of the purchasers considered only one brand and
one model. Another study found that 27 percent of the purchasers of major appliances considered only
one brand.

Seven separate studies found remarkable consistency in terms of the total external information search
undertaken (see the following table). You could say that for major purchase, typically half the people are
non-searchers, about 40 percent do limited search, and less than one-in-ten goes through an extensive
information search process.

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What does this tell you as a marketer? You had better get into their heads before they have a problem and
need information . . . because they are not going to search much for information when the problem arises.

What will affect the cost/benefit ratio for information search?

 The greater the number of alternatives available, the more external search there is likely to be.
 The higher the perceived range of prices, the more external search.
 The more product differentiation, the greater the search.
 People enjoy shopping for positive products (acquisition results in positive reinforcement) and
will search more, but don’t enjoy shopping for negative products (removal of an unpleasant
condition – rodent extermination, automobile repair) and will not engage in much search (do you
agree with this?).
 Middle income people search more than lower and upper income people.
 Those with higher education and occupation search more.
 Search is inversely related to age.
 New households search more than established households.
 The higher the perceived risk, either instrumental or symbolic, the greater the information
search. Perceived risk is high for products whose failure to perform as expected would result in
high social cost (people may laugh at your choices), financial cost (didn’t get what you paid for),
time cost (spend a lot of time in repairs), effort cost (a computer that constantly crashes), physical
cost (harmful side effects).
 Gift giving situations will increase information search.

Alternative Evaluation and Selection

It is important to understand consumers’ desired product benefits (their evaluative criteria) and the way in
which they choose between products with differing combinations of benefits. Choice is a complex
process, and our simplifications, while useful in managing and predicting outcomes, are certainly not
complete descriptions of the process. And our models may imply that consumers are more logical,
structured, rational, and deliberate than they really are.

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One way to look at choice is whether it is attribute-based or attitude based. Attribute-based choice
requires the knowledge of specific attributes at the time the choice is made and involves attribute-by-
attribute comparisons across brands. Attitude-based choice involves the use of general attitudes,
summary impressions, intuitions, or heuristics, and no attribute-by-attribute comparisons are made at the
time of choice.

Consider the following two processes a consumer might use to purchase an answering machine:
Process 1: The consumer remembers that the Casio his last roommate had seemed to work well
and looked "good," his parents had a Toshiba that also worked well but was rather large and
bulky, and his old Samsung had not performed as well as he had expected. He goes to a store and
gathers price, recording time, and ease of remote access information on each of these brands. He
mentally ranks each brand on these three attributes and his general impression of their quality.
Based on these evaluations, he makes a choice.
Process 2: The consumer remembers that the Casio his last roommate had seemed to work well
and looked "good," his parents had a Toshiba that also worked well but was rather large and
bulky, and his old Samsung had not performed as well as he had expected. At the store, he sees
that the Casio and Toshiba are about the same price and decides to buy the Casio.

Clearly, Process 1 is an attribute based choice process, and Process 2 is an attitude based choice process.
When would an attribute-based choice process be more likely? If an individual is motivated to make an
optimal decision, if attribute-specific information is readily available, and if time is available to make
comparisons, then attribute-based decisions are more likely. But there are lots of other reasons/situations
that would affect whether attitude-based or attribute-based decisions would dominate. Thus, marketers
must provide information and experiences that produce a strong attitude-based position (for consumers
making an attitude-based choice) and they must provide performance levels and supporting information
that will result in preference among those consumers making attribute-based choices.

Another general model is affective choice, where the evaluation of products is more holistic and focuses
on the way they will make the user feel as they are used. Neither attribute- nor attitude-based approaches
work in this case, since both imply some sort of objective rationality. Affective choice is based on
feelings.

Speaking of rationality, we do need to consider the objectives of the decision maker as they ponder a
choice. Rational choice models assume that the goal is to maximize the accuracy of the decision.
However, sometimes the goal may be to minimize the cognitive effort required for the decision (these
people will use simpler choice rules, consider fewer alternatives, and evaluate fewer attributes).
Sometimes you may want to avoid negative emotions. Sometimes you may want to maximize the ease
with which the decision can be justified.

Your book has a section on evaluative criteria - the various dimensions, features, or benefits a consumer
looks for in response to a specific problem. The marketer must determine which evaluative criteria are
used (projective techniques are useful here), determine consumer’s judgments of brand performance on
specific evaluative criteria (the semantic differential), and determine the relative importance of evaluative
criteria (a constant sum scale can be used).

People aren’t necessarily skilled at making judgments about product attributes. Some features are difficult
to judge (sound quality, durability). Consumers sometimes use surrogate indicators that are observable
characteristics that are used as indicators of hidden attributes. Such things as price, brand, or country of
origin are often surrogate indicators of quality.

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It is important for you to understand the decision rules used by consumers in attribute-based choice
situations. Recall that attribute based decisions involve the comparison of brands on the relevant
evaluative criteria.

Despite the fact that the choice rules we describe are not precise representations of consumer decisions,
they do enhance our understanding of how consumers make decisions and provide guidance for
marketing strategy.

Suppose you have evaluated a particular model of each of the six notebook computer brands in your
evoked set on six evaluative criteria: price, weight, processor, battery life, after-sale support and display
quality. Further, suppose that each brand excels on one attribute but falls short on one or more of the
remaining attributes, as shown in Table 16-1 (on the following page).

Which brand would you select? The answer would depend on the decision rule you utilize. Consumers
use five decision rules: conjunctive, disjunctive, elimination-by-aspects, lexicographic, and
compensatory. Consumers frequently use more than one rule to make a single decision. The most
common instance of this is using a relatively simple rule to reduce the number of alternatives considered
and then to apply a more complex rule to choose among the remaining options. An example would be
eliminating from consideration all those apartments that are too far from campus or that rent for more
than $700 per month (conjunctive decision rule). The choice from among the remaining apartments might
involve carefully trading-off among features such as convenience of location, price, presence of a pool,
size of rooms, and so forth (compensatory rule).

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Table 16-1 Performance

The first four rules we will describe are noncompensatory rules. This means that a high level of one
attribute cannot offset a low level of another. In the apartment example, the consumer described would
not consider an apartment that was right next to campus if it cost more than $700 per month. An excellent
location cannot compensate for an inappropriate price. In contrast, the last rule is a compensatory rule, in
which consumers average across attribute levels. This allows a high level of one value to offset a low
value of another.

Finally note that the conjunctive and disjunctive decision rules my produce a set of acceptable
alternatives, while the remaining rules generally produce a single best alternative.

Conjunctive Decision Rule

The conjunctive decision rule establishes minimum required performance standards for each evaluative
criterion and selects the first or all brands that surpass these minimum stan dards. In essence, you would
say: "I'll consider all (or I'll buy the first) brands that are all right on the attributes I think are important."
For example, assume that the following represent your minimum standards for a notebook computer:

Any brand of computer falling below any of these minimum standards (cutoff points) would be
eliminated from further consideration. Referring to Table 16-1, we can see that four computers are
eliminated-IBM, Gateway, Dell, and Toshiba. These are the computers that failed to meet all the
minimum standards. Under these circumstances, the two remaining brands may be equally satisfying. Or,
the consumer may use another decision rule to select a single brand from these two alternatives.

Because individuals have limited ability to process information, the conjunctive rule is frequently used to
reduce the size of the information processing task to some manageable level. It first eliminates those

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alternatives that do not meet minimum standards. This is often done in the purchase of such products as
homes, computers, and bicycles; in the rental of apartments; or the selection of vacation options. A
conjunctive rule is used to eliminate alternatives that are out of a consumer's price range, outside the
location preferred, or that do not offer other desired features. Once alternatives not providing these
features are eliminated, another decision rule may be used to make a brand choice among those
alternatives that satisfy these minimum standards.

The conjunctive decision rule is commonly used in many low-involvement purchases as well. In such a
purchase, the consumer evaluates a set of brands one at a time and selects the first brand that meets all the
minimum requirements.

If the conjunctive decision rule is used by a target market, it is critical to surpass the consumers' minimum
requirement on each criteria. Since the first brand the consumer evaluates that does so is often purchased,
extensive distribution and dominant shelf space are important. It is also necessary to understand how
consumers "break ties" if the first satisfactory option is not chosen.

Disjunctive Decision Rule

The disjunctive decision rule establishes a minimum level of performance for each important attribute
(often a fairly high level). All brands that surpass the performance level for any key attribute are
considered acceptable. Using this rule, you would say: "I'll consider all (or buy the first) brands that
perform really well on any attribute I consider to be important." Assume that you are using a disjunctive
decision rule and the attribute cutoff points shown below:

You would find Gateway (price), Compaq (weight), and Dell (display quality) to warrant further
consideration (see Table 16-1). As with the conjunctive decision rule, you might purchase the first brand
you find acceptable, use another decision rule to choose among the three, or add additional criteria to your
list.

When the disjunctive decision rule is used by a target market, it is critical to surpass the consumers'
requirements on at least one of the key criteria. This should be stressed in advertising messages and on the
product package. Since the first brand the consumer evaluates that exceeds one of the requirements is
often purchased, again extensive distribution and dominant shelf space are important, as is understanding
how consumers "break ties" if the first satisfactory option is not chosen.

Elimination-by-Aspects Decision Rule

The elimination-by-aspects rule requires the consumer to rank the evaluative criteria in terms of their

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importance and to establish a cutoff point for each criterion. All brands are first considered on the most
important criterion. Those that do not surpass the cutoff point are dropped from consideration. If more
than one brand passes the cutoff point, the process is repeated on those brands for the second most
important criterion. This continues until only one brand remains. Thus, the consumer's logic is: "I want to
buy the brand that has a high level of an important attribute that other brands do not have."

Consider the rank order and cutoff points shown below. What would you choose using the elimination-
by-aspects rule?

Price would eliminate IBM and Toshiba (see Table 16-1). Of those remaining, Compaq, HP, and Dell
surpass the weight hurdle (Gateway is eliminated). Notice that Toshiba also exceeded the minimum
weight requirement but was not considered because it had been eliminated in the initial consideration of
price. Only Dell exceeds the third requirement, display quality.

Using the elimination-by-aspects rule, we end up with a choice that has all the desired features of all the
other alternatives, plus one more. In this case, Dell would be selected.

For a target market using the elimination-by-aspects rule, it is critical to surpass the consumers'
requirements on one more (in order) of the criteria used than the competition. This competitive
superiority should be stressed in advertising messages and on the product package. Firms can also attempt
to alter the relative importance that consumers assign to the evaluative criteria.

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Lexicographic Decision Rule

The lexicographic decision rule requires the consumer to rank the criteria in order of importance. The
consumer then selects the brand that performs best on the most important attribute. If two or more brands
tie on this attribute, they are evaluated on the second most important attribute. This continues through the
attributes until one brand outperforms the others. The consumer's thinking is something like this: "I want
to get the brand that does best on the attribute of most importance to me. If there is a tie, I'll break it by
choosing the one that does best on my second most important criterion."

The lexicographic decision rule is very similar to the elimination-by-aspects rule. The difference is that
the lexicographic rule seeks maximum performance at each stage while the elimination-by-aspects seeks
satisfactory performance at each stage. Thus, using the lexicographic rule and the data from the
elimination-by-aspects example above would result in the selection of Gateway, because it has the best
performance on the most important attribute. Had Gateway been rated a 4 on price, it would be tied with
Dell. Then, Dell would be chosen based on its superior weight rating.

When this rule is being used by a target market, the firm should try to be superior to the competition on
the key attribute. This competitive superiority should be emphasized in advertising. It is essential that the
product at least equal the performance of all other competitors on the most important criteria. Outstanding
performance on lesser criteria will not matter if a competitor is superior on the most important attribute. If
a competitive advantage is not possible on the most important feature, attention should be shifted to the
second most important (assuming equal performance on the most important one). If it is not possible to
meet or beat the competition on the key attribute, the firm must attempt to make another attribute more
important.

The ad shown in Illustration 16-6 emphasizes the ability of this Columbia parka to protect the wearer
from bad weather. No other attributes are mentioned. This ad is appropriate for those consumers whose
decision rules place primary importance on this attribute.

Compensatory Decision Rule

The four previous rules are noncompensatory decision rules, since very good performance on one
evaluative criterion cannot compensate for poor performance on another evaluative criterion. On
occasion, consumers may wish to average out some very good features with some less attractive features
of a product in determining overall brand preference. Therefore, the compensatory decision rule states
that the brand that rates highest on the sum of the consumer's judgments of the relevant evaluative criteria
will be chosen. This can be illustrated as:

This is the same as the multi attribute attitude model described in Chapter 12. If you used the relative

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importance scores shown below, which brand would you choose using the compensatory rule?

Using this rule, Dell has the highest preference (see Table 16-1). The calculations for Dell are as follows:

RDell = 30(4) + 25(4) + 10(2) + 5(3) + 10(3) + 20(5)

= 120 + 100 + 20 + 15 + 30 + 100
= 385

Products and services targeting consumers likely to use a compensatory rule can offset relatively low
performance on some features with relatively high performance on others. However, it is important to
have a performance level at or near the competition on the more important features since they receive
more weight in the decision than do other attributes. Recall the description of the minivan purchase from
the beginning of this section. This customer preferred most of the features of the Ford but bought the GM
because Ford was very weak on one key attribute. However, the consumer did express a willingness to
change the decision had the price differential been greater. Thus, for compensatory decisions, the total
mix of the relevant attributes must be considered to be superior to those of the competition.

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Marketing Applications of Decision Rules

As shown below, each decision rule yields a somewhat different choice. Therefore, marketers must
understand which decision rules are being used by target buyers in order to position a product within this
decision framework.

We cannot specify with precision which rules are used by consumers in which situations. However,
research clearly indicates that people do use the rules. Low-involvement purchases generally involve
relatively simple decision rules (conjunctive, disjunctive, elimination-by-aspects, or lexicographic), since
consumers will attempt to minimize the mental "cost" of such decisions. High-involvement decisions and
purchases involving considerable perceived risk tend to increase evaluation efforts and often may involve
not only more complex rules (compensatory) but stages of decision making, with different attributes
being evaluated using different rules at each stage. Of course, individual, product, and situational
characteristics also influence the type of decision rule used.

A marketing manager must determine, for the market segment under consideration, which is the most
likely rule or combination of rules and then develop appropriate marketing strategy.

Outlet Selection and Purchase

Selecting a retail outlet involves the same process as selecting a brand (problem recognition, information
search, evaluate alternatives, and choice). This chapter describes the evaluative criteria used to choose a
retail outlet, consumer characteristics that influence the criteria used, and in-store characteristics that
affect the amounts and brands purchased.

The chapter also uses the term retail outlet in a very generic sense. With the changes in the retail scene, it
includes any source of products or services. That is, retail stores as well as in-home shopping such as
telephone, mail, and computer. I would also include vending machines, kiosks, and any other place where
the consumer places and order and receives a product or service (though I don’t think your book mentions
these sources) What else would you consider as a retail outlet?

Internet retailing is on the increase. High-income households dominate on-line shopping, with those
earning over $50,000 accounting for 74 percent of all Internet sales (compared to 47 percent of all retail
sales). This will drop as more lower income families begin to use this channel. The following table gives
you some idea of the number of households and their on-line shopping behavior.

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What kinds of items do people purchase on-line?
Convenience items: low-risk discretionary items. Internet sales will be most successful where
huge selections and deep discounts are important and easy shipping is available. Examples are
books, CDs, flowers, and event tickets.
Researched items: high-information, big ticket planned purchases. Internet sales will be led by
items with low style content and those for which "touch" is not important. Examples are leisure
travel, computer hardware, consumer electronics, and appliances.
Replenishment goods: moderate cost, high-frequency purchases. Items that are relatively
expensive and easy to ship will be most successful. Examples include health care items such as
vitamins, beauty aids, and gourmet foods.

As you might expect, the largest percentage of sales will be in areas such as computer hardware and
consumer electronics, event tickets, videos, music, books, and software (by far the largest).

In 1998 less than a third of those using the internet shopped on it. The following table shows some of the
major reasons.

Internet shoppers tend to have higher education, somewhat higher incomes, and to be white, male, and
live in the northeast or west. Those under age 24 and over age 64 shop on-line less than the other age
groups.

The vast majority of retail sales take place in stores. In addition to the traditional small specialty and
general stores, and larger department stores, we have seen the emergence of the category killers or
superstores, and the small kiosks in malls, airports, and other high traffic areas.

Earlier we were focusing on product choice followed by search for the retail outlet. However, for many
consumers and/or products, store-choice precedes brand choice. I have a few stores that I consistently
shop at and choose from among the brands they carry. I’m using the store as the expert in brand choice.

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Marketing strategy would be a focus on brand image and advertising for brand-first decisions, and focus
on distributing through key-outlets and point-of-purchase displays for outlet-first decisions.

A number of factors affect retail outlet selection.

Outlet image is one of the key factors. One study produced the following nine affective dimensions of
store image. These would probably change for non-store outlets, but the concepts would be similar.

Of course, different groups of customers want different things from various types of retail outlets.
Department store images have become too diffuse to attract customers, and they have evolved into
collections of distinctive specialty stores or boutiques, each with a sharply focused image keyed to a well-
defined target market.

As I look at these dimensions of retail image, I am reminded that you can’t have everything. It is
impossible to be a very low cost, very high service retail outlet. There are tradeoffs. A store must have a
clearly defined target market, develop a clear image and strategy, and focus its efforts.

Choice is also affected by retail outlet location and size. The attractiveness of a store is directly
proportional to its size (larger stores are more attractive because they tend to have larger selection).
Attractiveness is inversely proportional to distance (or more accurately, travel time). The longer it takes to
get to a store, the less likely you are to shop there. Of course, the impact of size and distance depends on
whether the consumer is buying convenience goods or shopping goods. For convenience goods (like
food and incidentals) travel time is very important. For shopping goods (like furniture and automobiles)
size/selection is very important.

The perceived risk is a characteristic of the consumer that affects retail outlet choice (see page 8 on the
cost/benefit of information search). Non-traditional outlets are inherently risky, so they must take steps to
minimize risks by providing excellent service, no-hassle return policies, brand name merchandise,
warranties, etc.

Researchers like to classify consumers into shopping orientation categories that emphasize certain
activities or shopping motivations. One study identified seven commonly held psychographic-based
shopping orientations. Just out of curiosity, what type of people do you think hold each orientation?
Inactive Shoppers (15 percent) have extremely restricted lifestyles and shopping interests. Best
characterized by their inactivity, Inactive Shoppers do not engage in outdoor or do-it-yourself
activities except for working in the yard or garden. They do not express strong enjoyment or
interest in shopping, nor are they particularly concerned about such shopping attributes as price,

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 employee service, or product selection.
Active Shoppers (12.8 percent) have demanding lifestyles and are "tough" shoppers. They engage
in all forms of outdoor activities and are usually do-it-yourselfers. Actives enjoy "shopping
around," and price is a major consideration in their search. Actives appear to shop more as an
expression of their intense lifestyles rather than an interest in finding bargains. Therefore, these
shoppers balance price with quality, fashion, and selection in their search for value.
Service Shoppers (10 percent) demand a high level of in-store service when shopping. They
usually seek convenient stores with friendly, helpful employees, and they quickly become
impatient if they have to wait for a clerk to help them.
Traditional Shoppers (14.1 percent) share Active Shoppers' preoccupation with outdoor activities,
but not their enthusiasm for shopping. They actively hike, camp, hunt, and fish, and are do-it-
yourselfers who often work on their cars. In general, though, Traditional Shoppers are not price
sensitive nor do they have other strong shopper requirements.
Dedicated Fringe Shoppers (8.8 percent) are heavy catalog shoppers. They are do-ityourselfers
and are more likely than average to try new products. They have almost a compulsion for being
different. Dedicated Fringe Shoppers are not interested in extensive socializing. They have little
interest in television and radio advertisements and exhibit limited brand and store loyalty.
Price Shoppers (10.4 percent), as the name implies, are most identifiable by their extreme price
consciousness. Price Shoppers are willing to undertake an extended search to meet their price
requirements, and they rely heavily on all forms of advertising to find the lowest prices.
Transitional Shoppers (6.9 percent) seem to be consumers in earlier stages of the family life cycle
who have not yet formalized their lifestyle patterns and shopping values. They take an active
interest in repairing and personalizing cars. Most participate in a variety of outdoor activities.
They are more likely than average to try new products. Transitional Shoppers exhibit little
interest in shopping around for low prices. They are probably "eclectic shoppers" because they
appear to make up their minds quickly to buy products once they become interested.

There are a host of other factors that will affect brand choice, particularly those things that occur once
the consumer is in the store. Point-of-purchase displays will have an impact. Price reductions and
promotional deals may change the consumer’s choice. Atmospherics will influence the consumer.
Stockouts will clearly have an impact on brand choice. Finally, sales personnel themselves may influence
the final brand choice.

Postpurchase Processes, Satisfaction, and Commitment

From the first time a guest registers at a Ritz-Carlton hotel, every preference and special order is entered
into a database accessible from all the chain's hotels. Employees carry special note cards on which guest
comments and concerns are noted for subsequent entry into the database. Thus, the next time a customer
checks into a Ritz-Carlton, the hotel will know if an iron should be in the room, if bed turn-down is
desired, or if a particular type of room is preferred. The guest's needs can then be met without the guest
having to make requests.

The Ritz-Carlton loyalty program is also customized. Most hotel programs provide points per stay that
can be redeemed for upgrades, free nights, or other predetermined and limited prizes. "When we

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recognize guests for their long stays or repeat business, we recognize them with something that's
appropriate for them." Recognition awards are often chosen at a staff meeting held at the start of each
shift, where a list of guests and their preferences is reviewed. For example, if a guest who prefers a room
with an ocean view is visiting for the fifth time and the staff sees that a deluxe room with that view is
available, they will upgrade the guest. When the guest checks in, the registration clerk will give the
upgrade with a thank you. However, "you should always tell the guest why he or she is being rewarded.
That way a customer won't expect rewards every visit."

Though rare only a few years ago, such customer loyalty programs are now common in American firms.
This chapter deals with everything that takes place after the purchase, and focuses on satisfying
customers, and developing committed customers.

A very common reaction after making a difficult, relatively permanent decision is doubt or anxiety,
referred to as postpurchase dissonance. The probability that a consumer experiences dissonance, as well
as the magnitude of such dissonance is a function of
The degree of commitment or irrevocability of the decision. The easier it is to alter the decision,
the less likely the consumer is to experience dissonance.
The importance of the decision to the consumer. The more important the decision, the more likely
dissonance will result.
The difficulty of choosing among the alternatives. The more difficult it is to select from among
the alternatives, the more likely the experience and magnitude of dissonance. Decision difficulty
is a function of the number of alternatives considered, the number of relevant attributes associated
with each alternative, and the extent to which each alternative offers attributes not available with
the other alternatives.
The individual's tendency to experience anxiety. Some individuals have a higher tendency to
experience anxiety than do others. The higher the tendency to experience anxiety, the more likely
the individual will experience postpurchase dissonance.

Dissonance occurs because making a relatively permanent commitment to a chosen alternative requires
one to give up the attractive features of the unchosen alternative. This typically occurs in high-
involvement situations (nominal and limited decision making generally doesn’t product dissonance).

Consumers often search for information to validate their decisions. The heightened receptiveness to
information after the purchase greatly enhances the role that advertising and follow-up sales efforts can
have. They build consumer confidence.

A related concept is consumption guilt which occurs when some negative emotions or guilt feelings are
aroused by the use of a product or service.

Your book has a brief section on product disposal. We know that packaging is a problem, but a number of
products are harmful to the environment and need special handling for proper disposal.

Postpurchase evaluation and ultimate satisfaction are important concepts to marketers. Consumers may
evaluate all aspects of the prepurchase process, the purchase itself, the final performance of the product,
instruction manuals, customer service, and repair or warranty service. All of these things fold into what I
call the total product.

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Satisfaction depends upon the performance of the product (or total product) relative to expectations.
When I go to a fast food restaurant I don’t expect much in the way of service or product, that’s what I get,
and I’m generally satisfied. I really get committed to a product when I expect a lot and I get even better
than expected. I’m committed to Hondas, McGuckins, Suzanne, and Moose Tracks.

For many products there are two dimensions to performance. Instrumental performance relates to the
physical functioning of the product. Symbolic performance relates to aesthetic or image-enhancement
performance. For example, durability of a sport coat is an aspect of instrumental performance, while
styling represents symbolic performance. Your book also mentions affective performance which is the
emotional response that owning or using the product provides.

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If a consumer is dissatisfied, what do they do? One study of grocery purchasers found that when there
was a case in which one of the products they normally purchase was defective
 25 percent of unsatisfactory purchases resulted in brand switching
 19 percent cause the shopper to stop buying the procducts
 13 percent let to an in-store inspection of future purchases
 3 percent produced complaints to the manufacturer
 5 percent produced complaints to the retailer
 35 percent resulted in the item being returned.

One of the other things people do when there is a problem or product failure is to tell all of their friends,
particularly if they are upset about the problem. Unfortunately, consumers often don’t complain to the
manufacturer or retailer, so they don’t know there is a problem. Firms need to anticipate dissatisfaction
and remove the potential cause before it occurs. It has been estimated that it costs only one-fifth as much
to retain an old customer as to obtain a new one.

The goal is to develop repeat purchases who are not only brand loyal but committed customers. A
committed customer has an emotional attachment to the brand and likes the brand in a manner somewhat
similar to a friendship. Customers use expressions such as I trust this brand, I like this outlet, and I
believe in this firm to describe their commitment.

A new trend in marketing is relationship marketing, an attempt to develop an ongoing, expanding

exchange relationship with the customer. In many ways it seeks to mimic the relationships that existed
between neighborhood stores and their customers many years ago.

The material in this handout was extracted and synthesized by R. H. Taylor from the Hawkins, Best, and Coney
textbook, Consumer Behavior, McGraw-Hill. The purpose is to shorten the reading material over decision making.

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