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Consumer Decision Making

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Consumer Decision Making refers to the cognitive process in which consumers ... If you are buying stereo equipment, always go to Sam's Hi-Fi ... – PowerPoint PPT presentation

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Title: Consumer Decision Making


1
Chapter 7 Consumer Decision Making
2
Sample Consumption Decisions
  • Buy or not buy?
  • Buy car or go on a cruise?
  • Buy sedan or coupe?
  • Buy Toyota or Volvo?
  • Buy Camry or Avalon?
  • Buy V6 or V4?

3
Process of Deciding
  • Consumer Decision Making refers to the cognitive
    process in which consumers integrate information
    about options, evaluate them, and select one.
  • The outcome of the CDM process is choice.
  • It is a goal directed, problem-solving process.

4
A model of consumer decision making
Information in the environment
Interpretation Exposure, attention, and
comprehension
Memory Product knowledge and involvement
Consumer decision making
Knowledge and beliefs
Integration Attitudes and intentions
Behavior
5
Problem recognition
A generic model of consumer problem solving
Search for relevant info
Evaluation of alternatives
Choice decisions
Purchase
Post-purchase use and reevaluation
6
Limitations of the Generic Process
  • Real world CDM is rarely fully linear (?)
  • It is not just cognitive, it involves
    interactions between behaviors, feelings,
    environment and cognitive processes.
  • Often involve multiple-problems and multiple
    solutions

7
Elements of Problem Solving
  • Problem representation
  • End goal
  • Goal hierarchy
  • Relevant knowledge for problem representation
  • Heuristics for searching, evaluating, and
    integrating knowledge
  • Choice alternatives (next slide)

8
Forming a Consideration Set of a Brand of
Alternatives
All brands in a product class
Unknown brands
Known brands
Brands found through search
Brands found accidentally
Evoked set
Unrecalled brands
Consideration set of brand choice alternatives
9
Elements of Problem Solving (contd.)
  • Integration processes
  • How information about options are combined and
    options are evaluated
  • Compensatory processes
  • Non-compensatory processes
  • Heuristics

10
Compensatory Processes
Multi-attribute model
  • A perceived weakness or negative evaluation on
    one criterion can be compensated for by a
    positive evaluation on another criterion.
  • Separate evaluations for each choice criterion
    are combined (added or averaged) to form an
    overall evaluation of each alternative.
  • The highest rated alternative is chosen.

11
Non-compensatory Processes
  • Accept alternative only if each criterion equals
    or exceeds the minimum cutoff level.
  • A product is acceptable only if it exceeds the
    minimum level on at least one criterion
  • Rank criterion from most to least important and
    choose best alternative on most important
    criterion
  • Select one criterion and eliminate alternatives
    that dont exceed its established cutoff level.
    Continue eliminating until one alternative
    remains.

Conjunctive
Disjunctive
Lexicographic
Elimination by aspects
12
Matrix of Evaluations
Brand Toyota Volvo
Reliability 9 7
Safety 7 10
Gas Mileage 8 8
Compensatory 24 25
Conjunctive At least 8 on every attribute Choose
Disjunctive At least 9 on safety Choose
Lexicographic Gas mileage is most important, followed by reliability. Choose
13
Combination Processes
  • Mix of compensatory and non-compensatory
    processes, combined or constructed on the spot
    to adapt to environmental factors

14
Examples of Consumer Heuristics
Search Heuristics
If you are buying stereo equipment, always go to
Sams Hi-Fi
  • Store selection

  • Sources of information
  • Source credibility

If you want to know which alternatives are worth
searching for, read test reports in Consumer
Reports
If a magazine accepts advertisements from the
tested products, dont believe its product tests
15
Examples of Consumer Heuristics, cont..
Evaluation Heuristics
If comparing processes foods, examine sodium
content.
  • Key criteria

  • Negative criteria
  • Significant differences

If a salient consequence is negative, give the
choice criterion extra weight in the integration
process.
If alternatives are similar on a salient
consequence, ignore that choice criterion.
16
Examples of Consumer Heuristics, cont..
Choice Heuristics
If choosing among familiar products...
Chooses the product that you think works best -
that provides the best level of performance
  • Works best

  • Bought last
  • Price-based rule

Select the alternative you used last, if it was
satisfactory
Buy the least expensive (or the most expensive,
depending on your belief about relationship
between price and product.
17
Examples of Consumer Heuristics, cont..
Choice Heuristics
If choosing among unfamiliar products
Dont buy any software until someone you know has
used it for a month and recommends it.
  • Wait and see

  • Expert consultant

Find an expert or more knowledgeable person, have
him or her evaluate the alternatives in terms of
your goals, then buy the alternative the expert
selects.
18
Problem-Solving in Purchase Decisions
  • Three types of problem-solving
  • Extensive decision making
  • Limited decision making
  • Routinized decision making
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