Consumer Decision Making

Consumers don’t just decide to buy.

 Chapter Outline
Levels of Decision Making
Views on decision making
Concept of Heuristics
Decision Making Process
Decision Making Rules
 Levels of Decision Making
Extensive Problem Solving
A lot of information needed
Must establish a set of criteria for evaluation

Limited Problem Solving

Criteria for evaluation established
Fine tuning with additional information

Routinized Response Behavior

Usually review what they already know
What Level of Decision Making will be
Used to Make this Purchase?
What Level of Decision Making will be
Used to Make this Purchase?
Four Views of Consumer Decision Making
 NEUROMARKETING:
bridges the consumer purchase decision
with neuroscience

“locate a mythical region of the

human brain that when
activated would drive
subsequent consumer behavior,
perhaps without consumers THE BUY
Traditional Funnel approach to decision making
Consumer Decision Making Journey
 Concept of Heuristics
Heuristics or mental shortcuts: optimal way to respond to occasions where we lack
information or time. People learn from experience and develop many different heuristics over time

Rule of thumb
Quick Inference
Brand Name
Past Experience
Recommendation

Shortcuts to decision making

Decisions based on intuitions

Types:
Availability : Decision on the basis of most commonly available

alternative
Representatives: Comparing information to our mental prototypes

Base-Rate: Decision based on probability


Video: https://www.youtube.com/watch?v=nSFHFfevfms
 Characteristics of Systematic Vs. Heuristics
Information search

SYSTEMETIC HEURISTICS
Organized Ad Hoc

Effortful Convenience Based

Prolonged Quick

Comprehensive Patchy
Decision Making Process
 Process - Need Recognition
Usually occurs when consumer has a
“problem”
 Need recognition styles
Actual state
Desired state
 How Problem Recognition Occurs?

• A Problem Stimulus
Types of Stimuli • A Solution Stimulus

• Internal Stimuli
Sources of • External Stimuli
Stimuli
Opportunity Recognition
• Stock Depletion

• Life-stage Changes

• Encounter with New technologies/New Products

• Developing New Tastes

 Pre-purchase Search
Begins with internal search(past experience) and then
moves to external search
The impact of the Internet: User Generated Content
(UGC)
There are many factors that increase search:
Product factor
Situational factors
Social acceptability
Consumer factors
Decision making using e-Commerce
Evaluation of Alternatives: Evoked Set
Evaluation of Alternatives: Criteria/Rules of
Decision Making

Compensatory
Non-compensatory
Conjunctive Decision Rule
Disjunctive Decision Rule
Lexicographic Rule
 A type of consumer
decision rule by
which positive
Non-
evaluation of a brand
compensatory
attribute does not
Decision
Rules compensate for a
negative evaluation of
the same brand on
some other attribute.
Non Compensatory decision rules
 A type of consumer decision rule by which positive
evaluation of a brand attribute does not compensate for a
negative evaluation of the same brand on some other
attribute.

There are 4 main non-compensatory rules:

Disjunctive
Conjunctive
Elimination-by-aspects
Lexicographic
 A noncompensatory
decision rule in which
consumers establish a
minimally acceptable
Conjunctive cutoff point for each
Decision attribute evaluated.
Rule Brands that fall below
the cutoff point on any
one attribute are
eliminated from further
consideration.
 A noncompensatory
decision rule in which
consumers establish a
Disjunctive
minimally acceptable
Rule
cutoff point for each
relevant product
attribute.
 A noncompensatory
decision rule -
consumers first rank
product attributes in
Lexicographic
terms of importance,
Rule
then compare brands
in terms of the
attribute considered
most important.
 Hypothetical Use of Decision Rules

Decision Rule Mental Statement

Compensatory rule I selected the netbook that came out best when I
balanced the good ratings against the bad ratings

Conjunctive rule I selected the netbook that had no bad features

Disjunctive rule I picked the netbook that excelled in at least one

attribute

Lexicographic rule I looked at the feature that was most important to me

and chose the netbook that ranked highest on that
attribute

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 Output of Consumer Decision Making
Purchase behavior
Trial purchases
Repeat purchases
Long-term commitment

Post- purchase evaluation

 Post-purchase Evaluation
Actual Performance Matches Expectations
Neutral Feeling
Actual Performance Exceeds Expectations
Positive Disconfirmation of Expectations
Performance Is Below Expectations
Negative Disconfirmation of Expectations
 Post Purchase regret
“negatively, cognitively determined emotion that we
experience when realizing or imagining that our present
situation would have been better had we acted differently,”
sense of disappointment or sadness due to a choice made or
not made.
Cognitive Dissonance