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Consumer Decision Making I: The Process

Levels of Consumer Decision Making

Extensive Problem Solving

Limited Problem Solving

Routine Response Behaviour

Factors That Affect the Type of Decision Making Process Used

Importance of the decision Extent of previous experience Existence of well-established decision criteria Amount of information at hand about each alternative The number of alternatives available Model of consumption being followed

Consumer Decision Making The Process

Need Recognition Pre-purchase Search Evaluation of Alternatives

Need or Problem Recognition

The realization that there is a difference between actual and desired states
The higher the gap, the stronger the need (or bigger the problem)

Types of Problems

Active Versus Inactive problems

Active: those you are aware of Inactive: those that you are not yet aware of (but exist)

Those that require immediate solutions and those that do not require immediate solutions

Problem Recognition and Marketing Strategy

Identify existing consumer problems and find solutions for these Lower the actual state Increase the desired state Increase the importance of the gap between actual and desired states Convert inactive problems to active problems Convert problems into ones requiring an immediate solution

Pre-Purchase Search

Types of Information Sources Types of Information Sought Factors Affecting Extent of Information Search

Types of Information Sources

Friends Neighbors Relatives Co-workers Computer salespeople Calling the electronics store

Newspaper articles Magazine articles Consumer Reports Direct-mail brochures Information from product advertisements Internal web site

Types of Information Sought

Brands or alternatives available Evaluative criteria to be used

Generally, product features

Ratings of brands on evaluative criteria

Factors that Increase the Level of Pre-purchase Search

Product Factors: Higher search when

It is a long-lasting or infrequently used product There are frequent changes in product styling Large volume is purchased The price is high There are many alternative brands There is much variation in features

Factors that Increase the Level of Pre-purchase Search

Situational Factors: Higher search when:

Experience is lower Previous experience was unsatisfactory

Social Acceptability: Higher search when:

Purchase is a gift Product is socially visible in use

Factors that Increase the Level of Pre-purchase Search

Value-Related Factors: Higher search when:

Purchase is discretionary All alternatives have both positive and negative qualities No agreement among users exists Conflicting information is available Other considerations exist

Factors that Increase the Level of Pre-purchase Search

Consumer Factors: Higher search when:

Consumers are well-educated, have higher income levels and are younger Consumers are low in dogmatism and risk perception Level of involvement is high Shopping is seen as an enjoyable activity

Evaluation of Alternatives Types of Consumer Choice Processes

Affective choices
More holistic; an overall evaluation based on how one feels about a purchase

Attribute-based choices
Have pre-determined evaluative criteria May require both external and internal search Complicated decision rules may be used

Nature of Evaluative Criteria

Can be tangible or intangible Include surrogate indicators

readily observable attribute of a product used to represent the performance level of a less observable attribute Are often ranked in order of importance

Consumer Decision Rules

Procedures used by consumers to facilitate brand or other consumption-related choices

Consumer Decision Rules

Compensatory Rules

Non-compensatory Rules

Conjunctive decision Rule

Lexicographic Decision Rule

Disjunctive Rule

Compensatory Decision Rules

One of the major decision rule used by consumers for evaluating alternative brands with respect to how they performs on relevant or salient attributes and the importance of each attribute. This decision rule allows for a negative evaluation or performance on a particular attribute to be compensated for by a positive evaluation on another attribute.

Non-compensatory Decision Rule

Decision rules are said to be non compensatory when good performance on one evaluative criterion does not offset or compensate from poor performance on another evaluative criterion, of the brand.

Non-Compensatory Consumer Decision Rules

Conjunctive Decision Rule Product attributes are identified a minimally acceptable cutoff point is established for each attribute brands that fall below the cutoff point on any one attribute are eliminated from further consideration.

Non-Compensatory Consumer Decision Rules

Disjunctive Decision Rule consumers identify product attributes establish a minimally acceptable cutoff point for each attribute accept the brand that meets or exceeds the cutoff for any one attribute

Non-Compensatory Consumer Decision Rules

Lexicographic Decision Rule

Product attributes are identified Product attributes are ranked in terms of importance brands are compared in terms of the attribute considered most important Brand that scores highest on the first attribute is chosen If there is a tie, the scores on the next attribute are considered

Issues in Alternative Evaluation

Lifestyles as a Consumer Decision Strategy Incomplete Information Non-comparable Alternatives Series of Decisions Consumption Vision
Mental picture of the consequences of using a particular product

Coping with Missing Information

Delay decision until missing information is obtained Ignore missing information and use available information Change the decision strategy to one that better accommodates for the missing information Infer the missing information

Information Search and Marketing Strategy

Get products into consumers evoked set Limit information search if your brand is the preferred brand Increase information search if your alternative is not the preferred brand Use point-of-purchase advertising effectively

Alternative Evaluation and Marketing Strategy

Identify decision rule used by target market and use suitable promotional messages Influence the choice of evaluative criteria Influence the rating of your product on evaluative criteria used Use surrogate indicators effectively Use consumption vision