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Consumer Decision Making I

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Products that enhance 'self-concept' reduce the dissonance between the ideal and actual self. ... Compensatory Decision Rules. Simple additive (Equal Weight) ... – PowerPoint PPT presentation

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Title: Consumer Decision Making I


1
Consumer Decision Making I
  • MKT 750
  • Dr. West

2
Agenda
  • Shopping insights diary assignment
  • Stages of Decision Making
  • Three Routes to Decision Making
  • The Role of Involvement

3
Shopping Insights Diary
4
Shopping Insights Diary
  • Introspective Approach vs Depth-Interview
  • Think through the purchase process involved in
    three recent purchases.
  • You will need to provide a description of how and
    why you decided to purchase the product, as well
    as offer insights to other consumers like
    yourself, and marketers.

5
Means-End Chain Analysis
  • Consumer behavior is both
  • Purposeful
  • We strive to achieve short-term, and long-term
    goals
  • Revealing
  • Our behavior reflects our values
  • Trade-offs

6
Laddering Technique

Values
I Why is it important to you to use a
camcorder that allows for five hours on one tape
and one battery? R Because I can take it to
outside events, like baseball games. I Why
is that important to you? R It assures me
that I will capture important moments in my kids
lives without worrying. I Why is that
important to you? R Being a good parent
requires that kids are left with visual images of
their childhood to enjoy as adults..
Consequences
Attributes
7
Consumer Decision Making
  • Consumer-side

8
Consumer Decision Making
  • Consumer-side
  • Marketer-side

9
Consumer Decision Making
  • Consumers make a wide variety of choices that
    range from life-altering (the decision to go to
    grad school, getting married) to mundane (filling
    your car with gasoline).

10
From Inertia to Passion
Midrange Problem Solving
Habitual Problem Solving
Extended Problem Solving
Limited Problem Solving
Passion
Inertia
Nature of Processing
Simple
Elaboration
11
Nature of the Decision
  • First time vs Repeat purchase
  • Purchase for Self versus Another
  • Functional products (e.g. washing machine)
  • Experiential products (e.g. perfume, clothing)

12
Consumers are cognitive misers
  • Heuristics are used as shortcuts to decision
    making
  • What might some of these be?

13
Rational Decision Making

14
Need Recognition
Ideal State Ideal State Ideal
State Actual State Actual State Actual
State No Problem Opportunity
Problem Recognition Recognition
15
How are Needs Activated?
  • Changed circumstances
  • Graduation, new job, marriage, first baby
  • Product acquisition
  • DVD player, Xbox
  • Product consumption
  • Toothpaste, milk, gasoline
  • Product innovation
  • Software
  • Marketing influence

16
The Role of Self-Concept
  • Alter the buyers perception of ideal self

Products that enhance self-concept reduce the
dissonance between the ideal and actual self.
Ideal Self


Actual Self
Extended Self
17
Possessions and the Extended Self

18
How Companies Can Activate Need Recognition
  • Instill fear
  • Gets attention
  • Memorable
  • Need to provide
  • a solution

19
Rational Decision Making

20
Information Search
21
Information Search
  • Types of Information
  • Search Information -- observable prior to
    purchase
  • Experience Information -- can be obtained from
    direct experience with the product or service
  • Credence Information product claims that are
    not readily observed even post purchase

22
Information Search
23
Information Search
  • Search is usually limited
  • Surveys indicate that 50 of consumers shop at a
    single store for a durable good, only 30 look at
    more than one brand of appliance
  • Highlights why top-of-mind awareness is crucial

24
What determines search?
  • Cost
  • Effort, time, delay, immediacy of need, money
  • The internet can lower search costs
  • Benefits
  • Savings, performance, satisfaction, avoidance of
    regret, ease of justification

25
What determines search?
26
Rational Decision Making

27
Evaluation Choice
28
Evaluating Alternatives
  • Determine criteria to be used for
  • evaluation of products
  • Assess the relative importance of the
  • each criteria
  • Evaluate each alternative based on the
  • identified criteria

29
Evaluating Alternatives
  • Criteria for the purchase of a car
  • Space
  • Reliability
  • Safety
  • Longevity
  • Handling
  • Styling

30
Evaluating Alternatives
  • Assessing Importance ei
  • Space 5
  • Reliability 4
  • Safety 4
  • Longevity 3
  • Handling 3
  • Styling 2

Importance 5Most Important, 1Least Important
31
Evaluating Alternatives
  • Beliefs Regarding Product Performance

bis bis bis
Importance ei Toyota Sienna Subaru Outback Volvo Cross Country
Space 5 4 2 4
Reliability 4 3 4 3
Safety 4 3 3 4
Longevity 3 2 4 4
Handling 3 1 4 2
Styling 2 2 4 3
Product Evaluation 4Excellent, 3Very Good,
2Good, 1Fair
32
Decision Rules
  • Cutoffs/Thresholds restriction or requirements
    for acceptable performance
  • Signals (surrogate indicators) are product
    attributes used to infer other product attributes
    (e.g. high price often infers higher quality)

33
Decision Rules
  • Compensatory Rule a perceived weakness of one
    attribute may be offset or compensated for by the
    perceived strength of another attribute
  • Noncompensatory Rule a products weakness on
    one attribute cannot be offset by strong
    performance on another attribute

34
Compensatory Decision Rules
  • Simple additive (Equal Weight) ?bi
  • The consumer adds the product evaluations
    across the set of salient evaluative criteria.
    The product with the largest score is chosen.
  • Weighted additive ?biei
  • Judgments of product evaluations are weighted
    according to importance

35
Simple Additive (Equal Weight)
?bi Toyota Sienna Subaru Outback Volvo Cross Country
Space 4 2 4
Reliability 3 4 3
Safety 3 3 4
Longevity 2 4 4
Handling 1 4 2
Styling 2 4 3
15 21 20
36
Weighted Additive
?biei Importance Toyota Sienna Subaru Outback Volvo Cross Country
Space 5 4 (20) 2 (10) 4 (20)
Reliability 4 3 (12) 4 (16) 3 (12)
Safety 4 3 (12) 3 (12) 4 (16)
Longevity 3 2 (6) 4 (12) 4 (12)
Handling 3 1 (3) 4 (12) 2 (6)
Styling 2 2 (4) 4 (8) 3 (6)
57 70 72
37
Noncompensatory Decision Rules
Lexicographic strategy Brands are compared on
their most important attribute, and the winner is
chosen. If there is a tie the second
most-important is considered, and so on, until a
choice is identified
38
Lexicographic Rule
Importance Toyota Sienna Subaru Outback Volvo Cross Country
Space 5 4 2 4
Reliability 4 3 4 3
Safety 4 3 3 4
Longevity 3 2 4 4
Handling 3 1 4 2
Styling 2 2 4 3

39
Lexicographic Rule
Importance Toyota Sienna Subaru Outback Volvo Cross Country
Space 5 4 2 4
Reliability 4 3 4 3
Safety 4 3 3 4
Longevity 3 2 4 4
Handling 3 1 4 2
Styling 2 2 4 3

40
Lexicographic Rule
Importance Toyota Sienna Subaru Outback Volvo Cross Country
Space 5 4 2 4
Reliability 4 3 4 3
Safety 4 3 3 4
Longevity 3 2 4 4
Handling 3 1 4 2
Styling 2 2 4 3

41
Noncompensatory Decision Rules
Elimination by aspects (EBA) Brands are
compared on an attribute by attribute
basis. Alternatives are eliminated that fall
below the consumer imposed cutoffs. Process
continues until a single alternative remains.
42
Elimination by Aspects Rule
Cutoff 3 Importance Toyota Sienna Subaru Outback Volvo Cross Country
Space 5 4 2 4
Reliability 4 3 4 3
Safety 4 3 3 4
Longevity 3 2 4 4
Handling 3 1 4 2
Styling 2 2 4 3

43
Noncompensatory Decision Rules
Conjunctive strategy (Satisficing) Brand are
evaluated, one at a time, against a set of
thresholds established for each attribute. The
first brand that meets or exceeds the threshold
for each attribute is chosen.
44
Conjunctive Rule
Cutoff 2 Toyota Sienna Subaru Outback Volvo Cross Country
Space 3 2 4
Reliability 3 4 3
Safety 3 3 4
Longevity 2 4 4
Handling 1 4 2
Styling 2 4 3
Very sensitive to order Very sensitive to order Very sensitive to order
45
Assignment
  • Reading
  • Chapters 17 - 18 (pp 604 - 616, 626 - 629, 637 -
    651)
  • Topic
  • Consumer Decision Making II
  • Assignment
  • Write-up your Shopping Insights for next
    Wednesday.
  • Find a team of up to six class members
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