Consumer Decision Making

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Chapter 16

• Consumer Decision Making

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Table 16.1 Types of Purchase or Consumption
Decisions
DECISION CATEGORY
ALTERNATIVE A
ALERNATIVE B
Basic purchase or consumption decision
To purchase or consume a product (or service)
Not to purchase or consume a product (or service)
Brand purchase or consumption decision
To purchase or consume a specific brand
To purchase or consumer another brand
To purchase or consume ones usual brand
To purchase or consume another established product
To purchase or consume a basic model
To purchase or consume a luxury or status model
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Table 16.1 continued
DECISION CATEGORY
ALTERNATIVE A
ALERNATIVE B
Brand purchase or consumption decision
To purchase or consume a new brand
To purchase or consumer ones usual brand or some
other established brand
To purchase or consume a standard quantity
To purchase or consume more or less than a
standard quantity
To purchase or consume an on-sale brand
To purchase or consume a nonsale brand
To purchase or consume a national brand
To purchase or consume a store brand
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Table 16.1 continued
DECISION CATEGORY
ALTERNATIVE A
ALERNATIVE B
Channel purchase decisions
To purchase from a specific type of store
To purchase from some other type of store
To purchase from ones usual store
To purchase from some other store
To purchase in-home
To purchase in-store merchandise
To purchase from a local store
To purchase from a store requiring some travel
Payment purchase decisions
To pay for the purchase with cash
To pay for the purchase with a credit card
To pay the bill in full when it arrives
To pay for the purchase in installments
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Levels of Consumer Decision Making
Extensive Problem Solving
Limited Problem Solving
Routinized Response Behavior
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Extensive Problem Solving
A search by the consumer to establish the
necessary product criteria to evaluate
knowledgeably the most suitable product to
fulfill a need.
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Limited Problem Solving
A limited search by a consumer for a product that
will satisfy his or her basic criteria from among
a selected group of brands.
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Routinized Response Behavior
A habitual purchase response based on
predetermined criteria.
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Models of Consumers Four Views of Consumer
Decision Making

• An Economic View
• A Passive View
• A Cognitive View
• An Emotional View

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Rational Customers Have To

• Be aware of all available product alternatives
• Be capable of correctly ranking each alternative
  in terms of its benefits and disadvantages
• Be able to identify the one best alternative

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Why is the Classical Economic Model Considered
Unrealistic?

• People are limited by their existing skills,
  habits, and reflexes
• People are limited by their existing values and
  goals
• People are limited by the extent of their
  knowledge

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Information Overload
A situation in which the consumer is presented
with too much product- or brand-related
information.
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A Model of Consumer Decision Making
INPUT
PROCESS
OUTPUT
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Figure 16.2 A Simple Model of Consumer Decision
Making
External Influences
Firms Marketing Efforts 1. Product 2.
Promotion 3. Price 4. Channels of distribution
Sociocultural Environment 1. Family 2. Informal
sources 3. Other noncommercial sources 4. Social
class 5. Subculture and culture
Input
Consumer Decision Making
Need Recognition Prepurchase Search Evaluation
of Alternatives
Psychological Field 1. Motivation 2.
Perception 3. Learning 4. Personality 5. Attitudes
Process
Experience
Postdecision Behavior
Purchase 1. Trial 2. Repeat purchase
Postpurchase Evaluation
Output
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Need Recognition
The realization by the consumer that there is a
difference between what is and what should be.
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Prepurchase Search
A stage in the consumer decision-making process
in which the consumer perceives a need and
actively seeks out information concerning
products that will help satisfy that need.
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Evaluation of Alternatives
A stage in the consumer decision-making process
in which the consumer appraises the benefits to
be derived from each of the product alternatives
being considered.
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Table 16.2 Factors that are Likely to Increase
Prepurchase Search
Product Factors Long interpurchase time (a
long-lasting or infrequently used
product) Frequent changes in product
styling Volume purchasing (large number of
units) High price Many alternative brands Much
variation in features
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Table 16.2 continued
Experience First-time purchase No past
experience because the product is
new Unsatisfactory past experience within the
product category Social Acceptability The
purchase is for a gift The product is socially
visible Value-Related Considerations Purchase is
discretionary rather than necessary Al
alternatives have both desirable and undesirable
consequences Family members disagree on product
requirements or evaluation of alternatives Produc
t usage deviates from important reference
group The purchase involves ecological
considerations Many sources of conflicting
information
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Table 16.2 continued
Product Factors Demographic Characteristics of
Consumer Well-educated High-income White-collar
occupation Under 35 years of age Personality Lo
w dogmatic Low-risk perceiver (broad
categorizer) Other personal factors, such as
high product involvement and enjoyment of
shopping and search
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Table 16.3 Alternative Prepurchse Information
Sources for a Home Security System
PERSONAL Friends Neighbors Relatives Coworkers Se
curity system salespeople Calling the security
alarm company
IMPERSONAL Newspaper articles Magazine
articles Consumer Reports Direct-mail
brochures Information from product
advertisements Internal web-site
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Issues in Alternative Evaluation

• Evoked Set
• Criteria Used for Evaluating Brands
• Consumer Decision Rules
• Lifestyles as a Consumer Decision Strategy
• Incomplete Information and Noncomparable
  Alternatives
• Series of Decisions
• Decision Rules and Marketing Strategy
• Consumption Vision

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Figure 16.3 The Evoked Set as a Subset of All
Brands in a Product Class
All Brands
Known Brands
Unknown Brands
(1)
Evoked Set
Inept Set
Inert Set
Overlooked Brands
Indifferent Brands
Unacceptable Brands
Acceptable Brands
(2)
(3)
(4)
Purchased Brands
Not Purchased Brands
(5)
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Evoked Set
The specific brands a consumer considers in
making a purchase choice in a particular product
category.
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Inept Set
Brands that a consumer excludes from purchase
consideration.
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Inert Set
Brands that a consumer is indifferent towards
because they are perceived as having no
particular advantage.
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Table 16.4 Possible Product Attributes Used as
Purchase Criteria for Nine Product Categories
PERSONAL COMPUTERS Processing speed Price Type of
display Hard-disk size Amount of memory Laptop or
desktop
CD PLAYER Mega bass Electronic shock
protection Length of play on batteries Random
play feature Water resistance Size of dial
WRISTWATCHES Watchband Alarm feature Price Water-r
esistant Quartz movement
VCRs Ease of programming Number of heads Number
of tape speeds Sow-motion feature Automatic
tracking
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Table 16.4 continued
COLOR TVs Picture quality Length of
warranty Cable-ready Price Size of screen
FROZEN DINNERS Taste Type of main course Type of
side dishes Price Preparation requirements
35-MM CAMERAS Autofocus Built-in flash Automatic
film loading Lens type Size and weight
FOUNTAIN PENS Balance Price Gold
nib Smoothness Ink reserve
COLOR INKJET PRINTER Output speed Number of ink
colors Resolution (DPI) Length of warranty USB
capability
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Table 16.5 Comparison of Selected
Characteristics of Home Security Systems
ST. LOUIS ALARM SYSTEM
CLAYTON SECURITY SERVICES
FEATURE
MISSOURI BUGLARY
System Price
99
1950
999
Monthly monitoring fee
19.95
19.95
19.95
Number of entry doors protected
1
3
2
Number of keypads included
1
3
2
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Need to check about the price of additional
keypads
Table 16.5 continued
ST. LOUIS ALARM SYSTEM
CLAYTON SECURITY SERVICES
FEATURE
MISSOURI BUGLARY
Price for each additional keypad
(75)
(90)
(no more needed)
Number of included smoke detectors wired to system
0 (100 each, if desired)
3
0
How home is protected
2 motion detectors plus contact on front door
2 motion detectors plus contacts on all windows
and outer doors
2 motion detectors plus contacts on all outer
doors
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Consumer Decision Rules

• Compensatory
• Noncompensatory
• Conjunctive Decision Rule
• Disjunctive Decision Rule
• Lexicographic Rule

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Compensatory Decision Rules
A type of decision rule in which a consumer
evaluates each brand in terms of each relevant
attribute and then selects the brand with the
highest weighted score.
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Table 16.6 Hypothetical Ratings for Security
Systems
ST. LOUIS ALARM SYSTEM
CLAYTON SECURITY SERVICES
FEATURE
MISSOURI BUGLARY
System Price
10
1
5
Monthly monitoring fee
4
6
5
Number of entry doors protected
1
10
5
Number of keypads included
3
10
6
Price for each additional keypad
3
10
6
Number of included smoke detectors wired to system
3
2
1
How home is protected
2
10
6
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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.
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Conjunctive Decision Rule
A noncompensatory decision rule in which
consumers establish a minimally acceptable cutoff
point for each attribute evaluated. Brands that
fall below the cutoff point on any one attribute
are eliminated from further consideration.
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Disjunctive Rule
A noncompensatory decision rule in which
consumers establish a minimally acceptable cutoff
point for each relevant product attribute any
brand meeting or surpassing the cutoff point for
any one attribute is considered an acceptable
choice.
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Lexicographic Rule
A noncompensatory decision rule in which
consumers first rank product attributes in terms
of their importance, then compare brands in terms
of the attribute considered most important. If
one brand scores higher than the other brands, it
is selected if not, the process is continued
with the second ranked attribute, and so on.
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Affect Referral Decision Rule
A simplified decision rule by which consumers
make a product choice on the basis of their
previously established overall ratings of the
brands considered, rather than on specific
attributes.
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Table 16.7 Hypothetical Use of Popular Decision
Rules in Making a Decision to Purchase a Home
Security System
DECISION RULE
MENTAL STATEMENT
Compensatory rule
We selected the security system that came out
best when we balanced the good ratings against
the bad ratings.
Conjunctive rule
We picked the security system that had no bad
features.
Disjunctive rule
We selected the security system that excelled in
at least one attribute.
Lexicographic rule
We looked at the feature that was most important
to us and chose the security system that ranked
highest on that attribute.
Affect referral rule
Everything they do is outstanding, so we decided
to have them install our security system.
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Types of Purchases
Trial Purchases
Repeat Purchases
Long-Term Commitment Purchases
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Postpurchase Evaluation
An assessment of a product based on actual trial
after purchase.
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Outcomes of Postpurchase Evaluation

• Actual Performance Matches Expectations
• Neutral Feeling
• Actual Performance Exceeds Expectations
• Positive Disconfirmation of Expectations
• Performance is Below Expectations
• Negative Disconfirmation of Expectations

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Table 16.8 Five Giver-Receiver Gifting
Subdivisions
GIVERS
INDIVIDUAL
RECEIVES OTHER GROUP
SELF
INDIVIDUAL
Interpersonal gifting
Intercategory gifting
Intrapersonal gifting
GROUP
Intercategory gifting
Intergroup gifting
Intragroup gifting
This SELF is either singular self (me) or
plural (us).
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Table 16.9 Major Differences Between Gift-Giving
Behavior or Anglo-Celtic, Sino-Vietnamese, and
Israeli Mothers
GIFT-GIVING ELEMENTS
SINO-VIETNAMESE
ANGLO-CELTIC
ISRAELI
1. MOTIVATION
Justification
Long-term goals
Short-term goals
Long-term/short-term goals
Significance
Practical gifts Lucky Money
Prestige gifts Birthday gifts
Importance to recipient
Timing
Chinese New Year and academic reward
Special occasions, e.g. birthdays, Christmas
Birthdays and general needs
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Table 16.9 continued
GIFT-GIVING ELEMENTS
SINO-VIETNAMESE
ANGLO-CELTIC
ISRAELI
2. SELECTION
Involvement
Low Priority Financial Risks
High Priority Social and psychological risks
Low Priority
Family Influences
Mother
Children
Mother dominant with younger children and
influenced by older children
Promotional Influences
Sale Items
Status Symbols
Sale Items
Gift Attributes
Price Money suitable
Quality Money unsuitable
Price Money suitable
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Table 16.9 continued
GIFT-GIVING ELEMENTS
SINO-VIETNAMESE
ANGLO-CELTIC
ISRAELI
3. PRESENTATION
Presentation Messages
Delayed self-gratification
Immediate self-gratification
Immediate self-gratification
Allocation Messages
Single gifts Eldest child favored
Multiple gifts Mothers favored
Single gifts
Understanding of Messages
Not always
Always
Never
4. REACTION
Achievement
Most of the time
Often
Never
Feedback
Less expensive
More expensive
Least expensive
Usage
Often shared
Often private
Never shared
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Table 16.10 Reported Circumstances and
Motivations for Self-Gift Behavior
CIRCUMSTANCES Personal accomplishment Feeling
down Holiday Feeling stressed Have some extra
money Need Had not bought for self in
awhile Attainment of a desired goal Others
MOTIVATIONS To reward oneself To be nice to
oneself To cheer up oneself To fulfill a need To
celebrate To relieve stress To maintain a good
feeling To provide an incentive toward a
goal Others
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Table 16.11 Gifting Relationship Categories
Definitions and Examples
GIFTING RELATIONSHIP
EXAMPLE
DEFINITION
Intergroup
A Christmas gift from one family to another family
A group giving a gift to another group
Intercategory
A group of friends chips in to buy a new mother a
baby gift
An individual giving a gift to a group or a group
giving a gift to an individual
Intragroup
A family buys a VCR for itself as a Christmas gift
A group giving a gift to itself or its members
Interpersonal
Valentines Day chocolates presented from a
boyfriend to a girlfriend
An individual giving a gift to another individual
Intrapersonal
A woman buys herself jewelry to cheer herself up
Self-gift
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Figure 16.5 A Simple Model of Consumption
Choice or Purchase Decision
Consumption Set Added to ones assortment or
portfolio
Input
Consuming Style How the individual fulfills his
or her consumption requirements
Process of Consuming and Possessing
Consuming and Possessing Things and Experiences
Using, Possessing, Collecting, Disposing
Feelings, Moods, Attitudes, Behavior
Altered consumer satisfaction, change in
lifestyle and/or quality of life, learning and
knowledge, expressing and entertaining oneself
Output
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Relationship Marketing
Marketing aimed at creating strong, lasting
relationships with a core group of customers by
making them feel good about the company and by
giving them some kind of personal connection with
the business.
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Table 16.12 Examples of Relationship Marketing
Techniques
COMPANY
BENEFITS
PROGRAM TYPE AND MEMBERSHIP CRITERIA
ATT
Points may be redeemed for free minutes, frequent
flyer miles, and other rewards. Toll-free number
for member questions, quarterly point statement,
and informational mailings.
True Rewards points earned for dollars spent on
long distance calling (no fee to join)
American Express
Invitations to special cultural, culinary, and
artistic events based on members personal profile
Platinum Card Program By invitation only
offered to the top 1 percent of AmEx cardholders
(fee to join)
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Table 16.12 continued
COMPANY
BENEFITS
PROGRAM TYPE AND MEMBERSHIP CRITERIA
Road Runner Sports
Discounts on merchandise and shoe analysis
program, quarterly newsletter Running Shorts,
free shipping upgrades, and travel and car rental
discounts.
Run America Club (fee to join)
World Yacht
Flags redeemed for awards such as free brunch,
caviar, champagne, and discounts on dinner
cruises. Five flags earn VIP status for
preferred seating and additional discounts.
World Yacht club flags earned each time a
member dines aboard World Yacht
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Table 16.12 continued
COMPANY
BENEFITS
PROGRAM TYPE AND MEMBERSHIP CRITERIA
Neiman Marcus
Quarterly newsletter, travel discounts, credit
card registration, perfume, magazine
subscriptions, special offer mailings, and
dedicated toll-free telephone number.
InCircle point system (minimum purchases of
3,000 per year to join)
Pacific Bell
Newsletter, toll-free customer service number,
and third-party discounts.
California Gold points earned for dollars spent
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Table 16.13 A Broad-based Relationship Program
AIRLINES Canadian Airlines International Cathay
Pacific Airlines Hawaiian Airlines Qantas
Airways Keno Air Singapore Airlines TWA US Airways
HOTELS continued ITT Sheraton Hotels, Inns,
Resorts All-Suites Marriott Hotels, Resorts and
Suites Vista Hotels Wyndham Hotels Resorts
CAR RENTAL Avis Rent a Car Hertz
HOTELS Conrad Hotels Forte Hotels Forum
Hotels Hilton Hotels Resorts Hilton
International Hotels Holiday Inns Inter-Continenta
l Hotels
OTHER Citibank AAdvantage Visa or Master-Card
application MCI Long-Distance American AAdvantage
Money Market Fund The American Traveler Catalog
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Figure 16.7 A Portrayal of the Characteristics
of Relationship Marketing
The Firm provides
The Customer provides

• Products/Services
• Individualized attention
• Continuous information
• Price offers
• Customer services
• Extras and perks, etc.

• Repeat Purchase
• Increased Loyalty
• Goodwill
• Positive word-of-mouth
• Lower costs for the firm

Trust and promises